Sample Business Plan

TABLE OF CONTENTS

A. EXECUTIVE SUMMARY 2

B. BUSINESS DESCRIPTION – AN ORGANIC OPPORUNITY 4

Introduction 4

Product 4

Groundwork forthe Venture 4

Crops to be grown 5

The Opportunity 6

Our community 7

Land Use, (re)connecting to `aina (land) 7

C. INDUSTRY AND MARKET ANALYSIS 9

Growth in the organic industry 9

The Hawai`i market 9

local competition 11

Offshore organic competition 12

Farming in Hawai`i 12

Customer profile 13

Distribution mechanisms 15

D. MARKETING PLAN 16

Promotions and outreach 16

Specific segment stratigies 17

MA`O customer service philosophy 17

Promotional materials and labeling 18

Pricing 18

Distribution 19

Sales management 19

Competitive advantage 19

E. MANAGEMENT PLAN 20

Organization and board 20

Governance 20

MA`O’s position in WCRC 21

Executive management & Staffing plan 22

Cooperating experts 22

F. Operations Plan 23

Farm plan 23

Research and development 23

Crop growth 23

Harvest and quality control 24

Inventory management 24

Organic certification 24

Farmer’s markets 24

Land, Equipment, Office Space, Tools, Resources 25

Increasing youth capacity 25

G. FINANCIAL PLAN 26

Start-up 26

Accounting system & Business controls 26

Long-term sustinability 26

Proforma statements 26

H. Risk ASSESSMENT & CONTINGENCY PLAN 35

I. ENDNOTES 36

A.EXECUTIVE SUMMARY

Leaders must deal with apathy along the Leeward Coast (Wai`anae), perhaps it comes from poverty and repeated disappointment, or from people too busy trying to survive and eke out a living. We hope that those that care can reach out to those who don’t and sow the seeds of positive change for the future of beautiful Wai`anae.

- Editorial, The Honolulu Advertiser, March 25, 2004

In September 2003, youth from a leadership training program began selling organically grown products at farmer’s markets located at health clinics in Wai`anae, Hawai`i. Their goal was to make affordable and healthy fruits and vegetables available to residents of their low-income community. The youth exceeded all expectations – products sold quickly, customers returned each week wanting more, and now these young people are poised to build on the test markets to become the largest producer of USDA certified organic fruits and vegetables on the island of O`ahu.
The Wai`anae Community Re-Development Corporation (WCRC), a Hawai`i non-profit 501(c)3 corporation, proposes the development of the MA`O Youth Organic Farm (MA`O). MA`O will train and employ out-of-school youth from the Wai`anae community. These youth will grow a diversity of field crops (e.g., salad greens, herbs, eggplant) and fruits trees (e.g., mango, limes) using organic methods certified by the U.S. Department of Agriculture’s National Organic Program rules, on five acres of land leased by WCRC.
The objectives of MA`O will be to:

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  Increase productive land from 2.5 to 5-acres by the end of 2007, and expand to ten acres by 2010;
  
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  Distribute 50% of produce to the Wai`anae community at affordable prices;
  
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  Provide employment, as well as business and sales training to Wai`anae youth;
  
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  Conduct research and provide advanced training in organic agriculture and community food systems;
  
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  Work collaboratively with WCRC’s other programs to support the development of young people; and
  
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  Restore idle land to productive use.
  

MA`O’s evolution dates back to 2001, when WCRC established the Mala `Ai `Opio Community Food Security Initiative, a project to create a community food system to fight hunger, improve nutrition, strengthen local agriculture and empower local families to move towards self-sufficiency. In the Hawaiian language mala `ai `opio means the youth food garden, and ma`o is also the Hawaiian name of the endemic cotton plant that makes its home in the Wai`anae area. With youth leadership development as a core objective, WCRC established a series of interconnected activities with the MA`O farm site as the primary training venue.

Life is a daily struggle for many young people in Wai`anae. Local public schools are failing to meet the standards of the federally mandated No Child Left Behind Act. They experience high drop-out rates and illiteracy compared to the rest of the state. There are few opportunities for post-secondary employment and training. Wai`anae has the state’s highest unemployment rate. Teenage pregnancy rates are high. Add to this a rapid growth in the distribution and use of crystal methamphetamine, and a formula for community deterioration and juvenile delinquency is created.
This venture is being planned and implemented to provide an employment, training and life-style opportunity for young people, while they work to improve the community. MA`O is founded with an entrepreneurial philosophy that is guided by our Hawaiian cultural traditions, with business activities developed to revive and expand upon Hawaiians’ traditional love and respect for the land. There are many local projects that have attempted to integrate social enterprise with Hawaiian culture; however, MA`O stands out from its competition however, through combining the explosive growth predicted for the organic agriculture industry with methods that are deeply respectful of Hawaiian culture and sustainability. This market opportunity provides fertile ground for youth to make a radical contribution to the social and economic life of the Wai`anae community, our home.
The national organic food industry has experienced rapid growth over the past 20-years. By 2001, sales of organic foods reached $8 billion<sup>i</sup> and there has been 20% growth annually in national organic sales over the past 10-years,<sup>ii</sup> The Organic Trade Association projects that the U.S. organic market will reach $30.7 billion by 2007. While this is small compared to the conventional foods industry, OTA reports that conventional food growth is only 2-3% per year versus organic foods, which is growing 17-20% annually.<sup>iii</sup>
According to the Hawai`i Organic Farmer’s Association (HOFA), Hawai`i imports over 90% of organic produce.<sup>iv</sup> At the same time, there are only nine organic farms located on O`ahu where 870,000 consumers reside,).^v Demand for fresh, local and organic foods is best illustrated by the recent establishment of three Hawai`i Farm Bureau Federation markets on O`ahu. The Kapiolani Community College (KCC) Farmers Market, which opened in late 2003, attracts over 2,500 visitors each Saturday, and specializes in 100% Hawai`i grown products. The Hawai`i organic agriculture industry still lags behind the national growth figures, due to inflated land prices, the pressure of urban development, and the difficult shift from the plantation agriculture system. The scarcity of local organic fruits and vegetables has made MA`O’s certified organic product highly attractive to consumers.
MA`O’s competitive advantage has been well established. WCRC recently secured substantial funding from the U.S. Department of Housing and Urban Development, as well as the U.S. Department of Health’s Administration for Native Americans (ANA) to support this program. In its pilot year, MA`O established thriving farmer’s markets and strong relationships with retailers and restaurants, in which demonstrated demand far outstripped supply. MA`O has also developed partnerships with Leeward Community College to train youth and with Maui Land and Pine CEO, David Cole, to collaborate in the development of a local organic industry. Most importantly, MA`O has a cadre of strong and determined youth – many already trained and eager to instruct others – with ambitions beyond their years, and a drive to become the largest producer of certified organic fruits and vegetables on the island of O`ahu.