Hawaii Agribusiness Incubator Program: Growing Agriculture, One Business at a Time

1. Agricultural Education Workshop: Agribusiness Incubator Program Agribusiness Incubator ProgramGrowing Hawaii’s agriculture industry, one business at a time University of Hawaii

2. 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

3. AIP is… • Who we are • http://aip.hawaii.edu

4. Who we help • Statewide program • Emerging agribusinesses • Existing agribusinesses seeking the next level • Preference to Native Hawaiians • Willing and able participants

5. How we’re helping • Other Services including business startup assistance, identification and coordination of external resources, value-added product guidance, and contract review • Strategic Plans • Business Plans • Marketing Plans • Project Management • Financial Systems Review • Financial Analysis

6. Core Services • Strategic Plans • Business Plans • Marketing Plans • Project Management • Financial Systems

7. 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)

8. Selected Practices • Provide an overview of some key business management tools and functions and their benefits

9. 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

10. 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)

11. 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

12. 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!

13. Making A Difference • “[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… “ “[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 $)

14. AIP client metrics, averaged over the past three years: Average annual revenue change: + 64.4% Average annual profit change:  + 315.7%

15. 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!

16. 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

17. Contact Info Thank you Steven Chiang, Director Agribusiness Incubator Program University of Hawaii schiang@hawaii.edu (808) 956-3530 Website: http://aip.hawaii.edu