Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Agribusiness Incubator ProgramGrowing Hawaii’s agriculture industry, one business at a time University of Hawaii

Agricultural Education Workshop:

Agribusiness Incubator Program

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

AIP Background

• Part of CTAHR/UH• Created through a USDA/CSREES grant• Helps agribusinesses grow by providing business consulting services• Assisted over 100 agribusiness and organizations statewide• Provide hands-on, intensive, and wide-ranging business consulting

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

AIP is…

• Who we are• http://aip.hawaii.edu

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Who we help

• Statewide program

• Emerging agribusinesses

• Existing agribusinesses seeking the next level

• Preference to Native Hawaiians

• Willing and able participants

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

How we’re helping

• Strategic Plans• Business Plans• Marketing Plans• Project

Management• Financial Systems

Review• Financial Analysis

• Other Services including business startup assistance, identification and coordination of external resources, value-added product guidance, and contract review

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Core Services

• Strategic Plans• Business Plans• Marketing Plans• Project Management• Financial Systems

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Why Should You Care?

• Most agribusinesses in Hawaii do not perform sufficient business management. Those that do can $eparate themselve$ from the pack

• Controversial?: From our experience, the most successful agribusinesses are run by people who excel at business versus excel at production (caveat: their production decisions are business-driven too)

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Selected Practices

• Provide an overview of some key business management tools and functions and their benefits

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Cost of Production (COP)

• Determine the total cost of producing what you sell. Not simply the direct costs! Validate by:– Units sold X cost per unit should = total expenses– or, Total Expenses / Units sold = Cost per Unit

• Prioritize cost-cutting efforts• Price your product appropriately• Identify your most profitable products• Know how much you have to sell to break even• Lends itself to forecasting revenues and expenses

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Cash Flow Projections

• Determine best times to spend and invest

• Identify cash flow issues ahead of time

• Often a lack of cash, not sales, causes businesses to fail (or at least make “suboptimal” decisions)

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Accounting

• Track purchases for volume discounts and forecasting

• Track sales for seasonal, product/mix, and customer analysis

• Know who owes you and speed receipt of amounts owed

• Help avoid late fees and penalties• Necessary for grants, loans, taxes, some

insurance• Provides you with INFORMATION to manage your

business

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Marketing• Get out of being a commodity – be more in

control of pricing and demand• Expand customer base/markets• What can you do (not just advertising) that

will encourage customers to do business with you?

• Branding: How else would customers know how to prefer your product

• Doesn’t need to be creative, expensive, or complicated -- you just need to have an integrated plan and take consistent action!

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Making A Difference“[Our company] owes its existence in large

part to the dedicated efforts and expert advice bestowed upon us from the entire team at the Agribusiness Incubator Program.”

“[AIP has] helped us to create two value-added products… guided us throughout the entire process and has been active consultants in our journey to create a new business and value-added product lines… “

• Success stories• How to become a client• Cost (free part + graduated $)

“[AIP has] helped us come a long way… helped us create a new company… [and] given us the confidence to move forward with our new venture.”

“The opportunity to have been selected as a client business to receive the type of counseling and support that I have received is a godsend… [The services provided by AIP] will enable me to procure funding for my fledgling business… “

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

AIP client metrics, averaged over the past three years:

Average annual revenue change:

+ 64.4%Average annual profit change: 

+ 315.7%

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Becoming a Client

• Download application from http://aip.hawaii.edu• Complete and return the application• AIP will call to schedule a meeting (phone or

onsite) to learn more• AIP scores applications and accepts clients on a

space-available basis• Cost

– Free Strategic Plan (the first step)– Graduated rate flat fees per project based on client

income– Cost should never be an obstacle!

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Other Local Resources

• College of Tropical Agriculture & Human Resources– www.ctahr.hawaii.edu/sustainag/NewFarmer/Links.asp

• Small Business Development Center– www.hawaii-sbdc.org

• SCORE– www.hawaiiscore.org

• Oahu RC&D (classes)– www.pacrimrcd.org/SectionIndex.asp?SectionID=48

• Small Business Administration– www.sba.gov/localresources/district/hi/index.html

Agribusiness Incubator Program Agribusiness Education, Training, and Incubation Program

Contact Info

Thank you

Steven Chiang, DirectorAgribusiness Incubator

ProgramUniversity of Hawaii

schiang@hawaii.edu(808) 956-3530Website: http://aip.hawaii.edu