Starting a local foods business
AMES – Starting a local foods business takes tenacity, fearlessness, a good feasibility plan and patience to take several years to put the entire plan together.
That assessment came from one of several speakers on April 8 at the 2014 Iowa Local Food Conference in Ames.
The conference’s focus was on small business expansion that included three workshops covering food hubs and how to sustain them; processing centers and integrating value-added products; and current marketing strategies for increasing the bottom line.
Penny Brown Huber, chief executive officer of Iowa Choice Harvest, of Marshalltown, spoke on her experiences and background of creating her business during the processing center and integrating value-added products workshop.
Huber said a group of 13 farmers gathered in 2006 to develop a plan to provide consumers with year-around fresh fruit and vegetables that included marketing those goods.
In 2013, Iowa Choice Harvest started its quick-freezing fruit and vegetable production business.
“It took us seven years to get started,” said Huber. “A business is not something that can be done in a year or less, it takes a lot of work and thinking things through.”
With its corn and apples picked and frozen on the same day, Huber said the processing approach is unique to the local foods movement.
Iowa Choice Harvest, Huber said, began processing apples and corn in August 2013. It’s a 60 percent farmer-owned and 40 percent non-farmer owned company.
Huber spoke about the challenges faced during the planning process.
“The things I thought would be easy,” she said, “ended up being super hard, and the things I thought would be super hard, ended up being easy.”
Before starting a business, Huber advised the group to be sure to conduct a feasibility study.
“That process smartens you up and will help you peel away the things that won’t work,” she said. “Start with those bigger ideas and peel down to an idea that works.”
In the feasibility study, Huber recommended vetting business ideas with bankers and lawyers to get honest opinions.
As far as financing, Huber said, with help from U.S. Department of Agriculture grants and small business loans they were able to get Iowa Choice Harvest started.
“We were extremely blessed to have those loans,” she said. “Also, be sure to find a banker that is comfortable with those types of loans.”
Developing high cash flow immediately is an integral part of the business start up.
“You can never have enough cash when developing a food business,” Huber said, “and we were fortunate to have a lot of people invested in Iowa Choice Harvest.
“We actually had to increase our cash flow three times, so plan to double or triple the money you are planning on needing.”
Marketing a new company is essential, she said, to help differentiate a product.
Tenacity and courage, Huber said, is needed to keep on pushing through the challenges.
Although the business has six months of success behind it, Huber said, it continues to invest in its resources.
Iowa Choice Harvest products plans to add asparagus this summer.
It’s products can be found in select Iowa stores, Huber said.
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