Last month’s article talked about the fundamental aspects of having a plan for entry into small-scale livestock production. This article will focus on developing a marketing plan, an essential component of any business plan or loan application. A well-designed plan will include aspects such as marketing options, potential markets, logistics to markets, fair market prices, production lines, goals and objectives, executive summary, etc. The ultimate goal of any marketing plan should be profitability or demonstrate potential for profitability. While this sounds like a lot, developing a marketing plan is readily accomplished when done one step at a time. And, remember, these plans are flexible and will be modified from time to time.
For example, let us assume you will be raising meat goats and sheep, live in Athens (North Alabama) and want to begin developing a marketing plan.
Executive summary – This goes at the beginning of your marketing plan and is a paragraph or two highlighting each component of your marketing plan, with minimal detail. It needs to capture the essence of your plan and capture the interest of your reader. If it does not, they are unlikely to read the rest of your plan.
Breeds – Do your research and decide what breeds work best for your situation. You will want to consider grow-out rates, hardiness (parasite tolerance and health), and advantages and disadvantages to each breed. Reality is you will want to consider cross-breeding to gain hybrid vigor (hardiness).
Production intent – Assuming your plan is to raise meat animals, a significant portion of your herd should include:
- Brood stock (ex. 20 females, 2 herd sires) – While this may sound like a small herd; you may want to grow your production numbers into your market potential through reproduction and acquisition of additional brood stock.
- Male animals – Most male offspring will be terminal animals and some sold as herd sires.
- Female animals – A small portion of female offspring will be retained as replacement animals, some sold as brood stock and a few sold as culls.
- Let’s assume you will initially have 15 animals to sell per year.
Marketing Options – Direct market, indirect market, retail and/or wholesale
- Direct market – Selling animals directly to consumers. This might involve animals being processed on your property; consumers purchasing and transporting animal to be processed elsewhere; you delivering animal to processor and consumer picking up processed meat; or selling to a convenient livestock sale barn that specializes in goats and sheep. Each scenario has its advantages and disadvantages.
- Indirect market – This tends to involve a person buying the animal from you and reselling to another market. Some people choose livestock sale barns or have buyers come to their farm and the buyers take animal elsewhere.
Potential Sale barn locations and distances (round-trip from Athens): Cullman, 101 Miles; Russellville, 128 miles; Columbia, Tenn., 135 miles. Knowing this will help estimate cost of transportation (see marketing table).
Fair-market price – This is a vague term and varying number. Seasonal market demand and number of potential buyers are determining factors. Let us set a fair-market price for young goats or sheep, about 60-80 lb., male, in very good body condition. In the marketing table, we will assume goats bring $2.50/lb. live weight and sheep bring $2/lb. live weight.
Goals and objectives – This includes financial resources, facilities, production and marketing plans, and how you plan to grow your operation as marketing opportunities increase, etc.
While this is a brief summary of a marketing plan, it should help give you an idea of how a well-thought-out plan should appear. There are many components to a marketing plan and it will take some time to develop. The intent of a marketing plan is to convince the reader and lays out a "road map" of how you plan to move forward with plans. Remember, in a business plan, profitability should be your goal; your marketing plan is how you plan to get there.
Robert Spencer is an Urban Regional Extension Specialist with the Alabama Cooperative Extension System.