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JUN.11, 2021

Farmers Market Business Plan Template

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Farmers Market Business Plan Template

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    Farmers market business plan for starting your own business

    One of the most lucrative businesses that you can start right now and that too with the least investment is that of farmer’s market. If you want to know how to start a farmers market business, just stick around till the endo of this document as this is a complete business plan for farmers market and has all the information, stats, and guidance that you need to start this business.

    We will start this business plan with strategic plan of organization which is the most important part of any business plan and will then navigate through everything from the capital and workforce required for the business to the market trends and a solid marketing analysis and plan that will make it possible for you to start and run the business with efficiency.

    Executive Summary

    2.1 The Business

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    Packard Farmer’s Market will be a registered and licensed farmer’s market outside of Dallas, Texas. The owner, Stephen Packard, wanted to go for a retail store business plan, but he has shifted to starting a farmers market business because there is a lot of potential for this business in the area. You can also use this business plan for a banker to get financing for the business.

    2.2 Management of Farmer’s Market Business

    Note

    If you want to know how to start a business at a farmers market, the most important thing to note is that this is a services business and needs a strong management to be successful in the true sense.

    To cater for that, Stephen will need to hire the appropriate staff to look after the day-to-day operations of the business. This will need five brokers to buy the products from the farmers and a 3 more to sell it to the buyers. In addition to that, a manager will be needed to look after the operations of the business.

    An accountant will also be necessary to keep track of all the money flowing in and out of the business at a daily basis.

    2.3 Customers of Farmer’s Market Business

    The next thing we need to determine for launching business at farmers market plan is the customers we will be serving. The customers of the market will be:

    • Farmers coming in to sell their products.
    • Wholesale buyers coming to purchase the product in bulk.
    • Domestic buyers coming to buy retail quantities of the product.
    • Food processing companies looking for agricultural products.

    2.4 Business Target

    The subjective target of Packard Farmer’s Market is to provide the best services to farmers as well as buyers in the area of Dallas. By doing that, Stephen targets to become one of the leading farmer’s market broker in the state of Texas.

    Farmers Market Business Plan - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    The owner of the business, Stephen Packard, will easily get farmers market business license because he has a lot of experience in this field. He worked as a broker at several farmer’s market and knows all the ins and outs of the industry. This business plan has a number of things in common with a retail discount store business plan, as you will see down the line.

    3.2 Why the Farmer’s Market Business is being started?

    Another important thing that we need to talk about in this farmers market business plan sample is the reason why this business is being started. There are two reasons for that. Firstly, there is no market farmer business type in the area to cater the needs of the farmers.

    Secondly, Stephen was fired by his former boss in a farmer’s market nearby and he has decided to send him out of the business by making an extremely attractive farmers market business card that will just bankrupt his former boss for good.

    3.3 How the Farmer’s Market Business will be started?

    Step1: Plan Everything

    Much like a pig farming business plan, the main, and the first thing involved in starting this business is planning. Stephen needs to plan everything from the expenses to the place of the market to make it successful. The important thing to note here is that even though not a lot of capital is needed to start a business and no inventory is involved, Stephen needs to have a solid plan to make sure that his business can compel the customers (both buyers and purchasers) to come to his business and leave the ones they have been working with for years.

    Step2: Get the Necessary Permits

    The next thing that Stephen and his team need to do is to get licensed, bonded, and insured to start the business. Unlike a aquaponics business plan, it is important to get permits from the local trade union and governmental bodies to start the business.

    Step3: Establish the Place of Business  

    The next thing Stephen has to do to start the business is to establish the point from where he will be operating the business and where he will interact the customers from. It is important to have  a place large enough to keep the products safe if they have to be purchased in large quantities in the harvesting season.

    Step4: Promotion and Marketing

    This is the most important part of starting this business. It is important because all the farmers as well as buyers in the area are doing business with someone else for years and have permanent accounts with them. We’ll have to put in some real marketing effort to make them come and do business with us.

    Farmers Market Business Plan - Startup Cost

    Start-up Expenses
    Legal $253,100
    Consultants $0
    Insurance $31,000
    Rent $34,000
    Research and Development $26,000
    Expensed Equipment $52,000
    Signs $4,000
    TOTAL START-UP EXPENSES $400,100
    Start-up Assets $348,000
    Cash Required $367,000
    Start-up Inventory $42,000
    Other Current Assets $224,000
    Long-term Assets $284,000
    TOTAL ASSETS $1,265,000
    Total Requirements $1,665,100
    START-UP FUNDING
    Start-up Expenses to Fund $400,100
    Start-up Assets to Fund $1,265,000
    TOTAL FUNDING REQUIRED $1,665,100
    Assets
    Non-cash Assets from Start-up $1,655,000
    Cash Requirements from Start-up $380,000
    Additional Cash Raised $55,000
    Cash Balance on Starting Date $36,000
    TOTAL ASSETS $2,126,000
    Liabilities and Capital
    Liabilities $30,000
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $48,500
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $78,500
    Capital
    Planned Investment $1,665,100
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,665,100
    Loss at Start-up (Start-up Expenses) $382,400
    TOTAL CAPITAL $2,047,500
    TOTAL CAPITAL AND LIABILITIES $2,126,000
    Total Funding $1,665,100
    Any questions? Get in Touch!

    Services

    This is the most important part of this business plan. As the business is all about services more than it is about products, we need to carefully select which services we will be providing. The trouble with deciding the services for a farmers market business plan template is that there are too many services that such businesses provide. We need to go only for the business service of farmers market that are financially viable for us.

    • Buying Agricultural Product

    This is the main service around which this whole business will be based. We will buy agricultural produce including fruits, vegetables, grain, and cotton from farmers. The produce will be bough on market competitive prices.

    • Buyer-Seller Arbitrage

    Some time, in a farmer’s market, it is not the right thing to purchase the produce and then sell it. Arbitrage services will be provided by the brokers that we will hire and we will charge a contingency fee from both parties for our services.

    • Loan Provision for Farmers

    Another of the important services is providing loans to the farmers that they reimburse when they sell their produce. This is a lucrative aspect of this business as the interest rates on these loans are pretty high.

    • Grain and Agricultural Produce Storage

    We will have a large storage facility where we can store other people’s agricultural produce and charge them a fee based on duration and volume of the storage.

    Marketing Analysis of Farmers Market Business

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    If you want to know how to start farmers market business, the first thing you need to do is the marketing analysis of the business. This is the step where you will discover in detail what are the market variables that you are up against. You need to do this thoroughly before you start a farmers market business

    5.1 Market Trends

    If you are planning on opening a farmers market business, you need to know that no matter how good farmers market business ideas you might have, you can just not be successful without seeing the market trends of the field you are going to enter.

    The farmer’s market business in the US is one of the biggest ones in the world and as the US is expanding its agricultural exports, it is the best time to enter this business. The profit margin here is even more than that of a hydroponics farm business plan.

    5.2 Marketing Segmentation

    The market segments that Packard Farmer’s Market will be serving will be the following:

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    5.2.1 Local Farmers

    Our primary clients will be the local farmers who wan to sell their agricultural produce. We will offer them good rates and will be willing to give them loans in advance. The success of this business depends on working with as many farmers as we can and we will spare no expense to do that.

    5.2.2 Local Retailers

    We will sell the produce to the local retailers. These people will mostly buy fruits and vegetables.

    5.2.3 Food Processing Companies

    This market segment will buy fruits, vegetables, and grain. These will be our permanent customers and will bring a large part of our income.

    5.2.4 Manufacturing Units

    This market segment can buy any thing from seasonal fruits to cotton and tobacco. We will try to have as many of these clients as possible as they are the most high-paying ones.

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Local Farmers 30% 34,000 36,000 38,000 40,000 41,000 10.00%
    Local Retailers 25% 27,000 29,000 31,000 32,000 33,000 10.00%
    Food Processing Companies 24% 25,000 26,000 28,000 29,000 30,000 10.00%
    Manufacturing Units 21% 20,000 21,000 23,000 24,000 25,000 11.00%
    Total 100% 106,000 112,000 120,000 125,000 129,000 10%

    5.3 Business Target

    • To become the biggest farmer’s market broker in the area.
    • To expand the business to other cities and start a chain of outlets.
    • To give the farmers the best rates for their produce.
    • To be the biggest suppliers of agricultural produce in the area for domestic, business, and industrial clients.

    5.4 Product Pricing

    We will buy the products at a higher price than the market and sell them at a lower price to attract business. Once we have sufficient customers, we can change the rates to more profitable ones.

    Marketing Strategy

    It will not be easy to attract customers who are already working with other farmer’s market brokers. To achieve that, we need to have a solid farm business marketing strategy. This is the only thing that can make this business successful and profitable for us in a market where loyalty is the name of the game and people are working with our competitors for years, even generations.

    Here’s the competitive analysis for this business plan for a farmers market that will make our business a success.

    Any questions? Get in Touch

    6.1 Competitive Analysis

    1. The biggest competitive edge that we have is the location we have chosen for the business. The farmers of the area have to take the produce 100 miles to the other businesses. If we can offer them a price difference that is more than the freight charges, we can make it big in the business.
    2. Second thing that we have noticed is that the other businesses in the area have a very high interest rate for the loans they offer to the farmers. We can also capitalize on this aspect.
    3. Thirdly, we will offer delivery services to the buyers which will also give us a competitive edge.

    6.2 Sales Strategy

    • We will buy the produce from the farmers at a higher rate to attract them to do business with us.
    • For the products we sell, we will keep the price lower than what the competitors offer. This will decrease the profit margin but will be great for giving our business customers in the start.
    • We will also use multiple ways to advertise out business in order to attract more customers.

    6.3 Sales Monthly

    Farmers Market Business Plan - Profit Monthly

    6.4 Sales Yearly

    Farmers Market Business Plan - Sales Yearly

    6.5 Sales Forecast

    Farmers Market Business Plan - Unit Sales

    Sales Forecast
    Unit Sales Year 1 Year 2 Year 3
    Buying Agricultural Product 54,000 57,240 60,674
    Buyer-Seller Arbitrage 32,000 33,920 35,955
    Loan Provision for Farmers 38,000 40,280 42,697
    Grain and Agricultural Produce Storage 44,000 46,640 49,438
    TOTAL UNIT SALES 168,000 178,080 188,765
    Unit Prices Year 1 Year 2 Year 3
    Buying Agricultural Product $40.00 $46.40 $53.82
    Buyer-Seller Arbitrage $45.00 $52.20 $60.55
    Loan Provision for Farmers $42.00 $48.72 $56.52
    Grain and Agricultural Produce Storage $48.00 $55.68 $64.59
    Sales
    Buying Agricultural Product $2,160,000.00 $2,655,936.00 $3,265,738.91
    Buyer-Seller Arbitrage $1,440,000.00 $1,770,624.00 $2,177,159.27
    Loan Provision for Farmers $1,596,000.00 $1,962,441.60 $2,413,018.19
    Grain and Agricultural Produce Storage $2,112,000.00 $2,596,915.20 $3,193,166.93
    TOTAL SALES $7,308,000.00 $8,985,916.80 $11,049,083.30
    Direct Unit Costs Year 1 Year 2 Year 3
    Buying Agricultural Product $38.00 $43.00 $49.00
    Buyer-Seller Arbitrage $43.00 $49.00 $56.00
    Loan Provision for Farmers $40.00 $45.00 $52.00
    Grain and Agricultural Produce Storage $46.00 $52.00 $60.00
    Direct Cost of Sales
    Buying Agricultural Product $2,052,000.00 $2,461,320.00 $2,973,045.60
    Buyer-Seller Arbitrage $1,376,000.00 $1,662,080.00 $2,013,491.20
    Loan Provision for Farmers $1,520,000.00 $1,812,600.00 $2,220,233.60
    Grain and Agricultural Produce Storage $2,024,000.00 $2,425,280.00 $2,966,304.00
    Subtotal Direct Cost of Sales $6,972,000.00 $8,361,280.00 $10,173,074.40

    Personnel plan

    One of the biggest troubles with the farmers market business model is that it requires a lot of skilled and unskilled workers. We need to have all kinds of people for this from daily wagers to college graduates. Just like the mushroom growing business plan, the workforce is what can make our venture a successful one.

    7.1  Company Staff

    Stephen will be the owner and CEO of the company and will hire the following staff to help him run the company.

    • 3 Managers for liaison, operations, and marketing.
    • 5 Brokers for purchasing and selling the product.
    • 1 Accountant to keep track of the money.
    • 2 Surveyors to vet the farmers before giving out a loan.
    • 2 Drivers for delivering the produce to the buyers.

    7.2 Average Salary of Employees

    Personnel Plan
    Year 1 Year 2 Year 3
    Operations Manager $13,000 $14,300 $15,730
    Liaison Manager $12,000 $13,200 $14,520
    Marketing Manager $12,000 $13,200 $14,520
    Brokers $50,000 $55,000 $60,500
    Accountant $9,000 $9,900 $10,890
    Surveyors $18,000 $19,800 $21,780
    Drivers $17,000 $18,700 $20,570
    Total Salaries $131,000 $144,100 $158,510

    Financial Plan

    Lastly, we need to have a financial plan to start and operate a profitable farmers market business. This will cover all the expenses that we need to have in order to start the business and keep it running until it starts making a profit.

    We’ll need to have money for:

    • Establishing the business.
    • Buying the produce from the farmers.
    • Giving loans to the farmers.
    • Buying delivery vehicles.
    • Salaries of the employees for the first six months.
    • Marketing and advertisement.

    8.1 Important Assumptions

    General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.18% 8.23% 8.29%
    Long-term Interest Rate 8.45% 8.49% 8.55%
    Tax Rate 24.49% 24.80% 25.12%
    Other 0 0 0
    Any questions? Get in Touch

    8.2 Break-even Analysis

    Farmers Market Business Plan - Break-even Analysis

    Break-Even Analysis
    Monthly Units Break-even 5344
    Monthly Revenue Break-even $133,230
    Assumptions:
    Average Per-Unit Revenue $235.00
    Average Per-Unit Variable Cost $0.69
    Estimated Monthly Fixed Cost $165,020

    8.3 Projected Profit and Loss

    Pro Forma Profit And Loss
    Year 1 Year 2 Year 3
    Sales $7,308,000 $8,985,917 $11,049,083
    Direct Cost of Sales $6,972,000 $8,361,280 $10,173,074
    Other $0 $0 $0
    TOTAL COST OF SALES $6,972,000 $8,361,280 $10,173,074
    Gross Margin $336,000 $624,637 $876,009
    Gross Margin % 4.60% 6.95% 7.93%
    Expenses
    Payroll $131,000 $144,100 $158,510
    Sales and Marketing and Other Expenses $137,000 $140,000 $144,000
    Depreciation $2,300 $2,350 $2,480
    Leased Equipment $0 $0 $0
    Utilities $2,900 $3,000 $3,100
    Insurance $2,100 $2,100 $2,100
    Rent $3,200 $3,300 $3,400
    Payroll Taxes $30,000 $31,000 $32,000
    Other $0 $0 $0
    Total Operating Expenses $308,500 $325,850 $345,590
    Profit Before Interest and Taxes $27,500 $298,787 $530,419
    EBITDA $27,500 $298,787 $530,419
    Interest Expense $0 $0 $0
    Taxes Incurred $5,500 $59,757 $106,084
    Net Profit $22,000 $239,029 $424,335
    Net Profit/Sales 0.30% 2.66% 3.84%

    8.3.1 Profit Monthly

    Farmers Market Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Farmers Market Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Farmers Market Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Farmers Market Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Farmers Market Business Plan - Projected Cash Flow

    Pro Forma Cash Flow
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $50,000 $54,000 $58,320
    Cash from Receivables $23,000 $24,840 $26,827
    SUBTOTAL CASH FROM OPERATIONS $73,000 $79,570 $85,936
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $73,000 $80,000 $86,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $44,000 $48,000 $50,000
    Bill Payments $25,000 $28,000 $31,000
    SUBTOTAL SPENT ON OPERATIONS $69,000 $76,000 $81,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $69,000 $74,520 $80,482
    Net Cash Flow $21,000 $22,000 $23,000
    Cash Balance $28,000 $31,000 $33,000

     

    8.5 Projected Balance Sheet

    Pro Forma Balance Sheet
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $274,000 $306,880 $337,568
    Accounts Receivable $22,000 $24,640 $27,695
    Inventory $4,200 $4,704 $4,900
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $286,000 $320,320 $360,040
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $19,500 $21,840 $24,570
    TOTAL LONG-TERM ASSETS $23,900 $26,768 $30,114
    TOTAL ASSETS $295,000 $330,400 $371,700
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $19,000 $21,280 $23,919
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $18,000 $20,160 $22,660
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $16,000 $17,920 $20,142
    Paid-in Capital $30,000 $30,000 $31,000
    Retained Earnings $55,000 $59,950 $65,945
    Earnings $200,000 $218,000 $239,800
    TOTAL CAPITAL $285,000 $310,650 $341,715
    TOTAL LIABILITIES AND CAPITAL $301,000 $330,400 $371,700
    Net Worth $298,000 $324,820 $357,302

    8.6 Business Ratios

    Ratio Analysis
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.23% 8.01% 8.88% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.19% 10.18% 11.28% 9.80%
    Inventory 5.43% 6.02% 6.67% 9.90%
    Other Current Assets 2.17% 2.40% 2.66% 2.40%
    Total Current Assets 150.02% 152.00% 152.00% 158.00%
    Long-term Assets 11.59% 11.60% 11.64% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.98% 5.02% 5.07% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.65% 7.71% 7.78% 7.38%
    NET WORTH 101.60% 102.41% 103.35% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 95.23% 97.80% 100.54% 99.00%
    Selling, General & Administrative Expenses 94.06% 96.60% 99.30% 97.80%
    Advertising Expenses 1.54% 1.58% 1.63% 1.40%
    Profit Before Interest and Taxes 42.00% 43.13% 44.34% 33.90%
    Main Ratios
    Current 34 35 36 32
    Quick 34 34.4 35.26 33
    Total Debt to Total Assets 0.18% 0.18% 0.17% 0.40%
    Pre-tax Return on Net Worth 74.33% 74.70% 75.00% 75.00%
    Pre-tax Return on Assets 94.79% 99.53% 104.51% 111.30%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 33.18% 34.21% 35.27% N.A.
    Return on Equity 54.87% 56.57% 58.32% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 32 33.6 33 N.A.
    Accounts Payable Turnover 15 16 16.3 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.5 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $244,500 $258,192 $272,651 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.86 0.87 0.87 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 29.1 29.12 29.16 N.A.
    Sales/Net Worth 2.1 2.2 2.3 N.A.
    Dividend Payout 0 0 0 N.A.

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