New Workbook Empowers Retail Farm Markets to Boost Success
Pennsylvania is a leading state for farmers participating in direct-to-consumer sales, which explains why we have over 600 retail farm markets and roadside stands. If you are considering creating or expanding an on-farm market, there are many things you need to consider.
The Market Development Workbook is designed to help you think through the essential details, whether you are building a market, expanding an existing market, or just looking to measure the performance of various departments within your market, the Farm Market Workbook is a great resource.
The Workbook walks you through these topics: Start-up Costs, Sales Forecast, Departments, Labor, Expenses, Profit & Loss, and Capital and ROI (Return on Investment). The Workbook provides examples for each of these topics using industry standards or averages, which you can use if you currently don’t have that information from your business.
An example of how the Workbook can be used, working with new owners of an existing retail farm market, we took the previous year's profit and loss statement provided by the previous owners and entered the data into the Workbook to set departments and their own profit and loss and create a budget for the next three years. This gave the new owners a starting point to determine how the market was performing.
Each sheet has some helpful tips and instructions for completing the sheet. For instance, how much labor will your new market require, and how many new hires can you afford? Typically, wages for small retail are around 20% of gross sales. Using the "Sales Forecast" sheet in the work, you can estimate the number of daily customers, average sale size, average daily gross, and get an estimated annual gross sales number that you can then times by 20% to get a salary figure for staff.
Understanding the performance of each department in your market is essential to the success of your business, and the "Departments" sheet helps you understand each department's contribution to the gross revenue. Understanding performance allows you to make decisions on underperforming departments and departments that are doing well.
The final sheet is your return on investment (ROI). This sheet takes into consideration your startup costs, a loan interest rate, and loan years and calculates annual payments along with any additional capital invested.
The Workbook is more than figuring out your startup costs for a new market. It can be part of your management team that will help you fine-tune your market.
