Pa. forum: Business plans can jump-start new visions
STATE COLLEGE, Pa. — Rob Goodling, an agriculture business consultant with Horizon Farm Credit, led a pair of dairy product innovators in a discussion of how to use a business plan to redirect their business during a session on finances at the Pennsylvania Dairy Summit.
Goodling pointed out that business plans need to be kept alive with continual review.
“Things change,” he said.
Amy Brickner of Carlisle, Pa., traced how her value-added business, Destiny Dairy Bar, evolved during the past five years.
John Esh of Howard, Pa., explained how he adapted his current cheese operation, Goot Essa, throughout twenty years of changes.
Brickner describes her dairy products, “the best nutritional value you can get.” Her site, destinydairybar.com, illustrates her presentation at the 2023 Pennsylvania Farm Show, her family and animals, cows, her farm-related sale items, and especially half-pint, half-gallon whole milk beverages and ice cream flavors.
Her beverage labels indicate that the product is non-homogenized, pasteurized and instructs, “Shake well. Cream on top.” The range of whole milk drinks includes coffee, chocolate, chocolate mint, peach, raspberry, orange, and root beer. Her ice creams feature the typical vanilla. black raspberry and chocolate, plus salted caramel, grape nuts, cotton candy and more.
In 2018 Brickner won a grant for her business. By the following year she transferred the cows to her site in Carlisle. During the COVID-19 pandemic she purchased equipment, including a pasteurizer. The store was constructed in 2021 with ice cream service beginning in July.
Brickner continually adapts her sales and marketing strategy. “Just keep reaching consumers,” she advises.
New products, store and community events, and media outreach contribute to her fresh ideas. She now uses fewer cows, but a greater proportion is Jerseys and Guernseys.
She says she takes one step at a time, while constantly evaluating the equipment and assistance to ease her production efforts and expand her operation. As she progresses, she adds items such as extra storage materials as soon as she can arrange the space.
While she recognizes and responds to market changes, she tells newcomers to a business, “Dive in. If you wait for all answers, you’ll never start.”
John Esh’s farming and cheesemaking business weathered some hardships. When he had 60 cows, his business plan indicated he needed 90 for his objectives.
His goal was to pay for his farm by his 55th birthday. But during the first year a major drought complicated his plans. Plus, the price of milk was insufficient.
In 1991 he consulted several extension agents and consultants, who advised that he would need 120 cows. But his partners did not want to pursue the management of milking that many.
He ended his partnership, expanded hay acreage, and decided to purchase the rations for his cows.
However, even with the profit from 90 cows and hay, he determined that he would have to add value to keep the farm. Esh concluded, “I needed to get more than commodity value for milk.”
Developing his Goot Essa business changed everything. Within his cooperative, making Cheddar and Colby cheese fulfills the Pennsylvania Dutch meaning of “good food.”
He learned that restaurants sought European types of cheese but preferred not to import them. Many of his premium cheeses are ripened and aged in caves. The constant temperature and high moisture levels in caves produce the flavors demanded by cheese connoisseurs.
By 2009, Esh developed Alpine and Bleu cheeses. He requested help from a sheep farmer and produced Manchego Sheep’s Milk Cheese.
Three more caves in 2012 enabled greater quantities.
In 2015 the Goot Essa group built the main production and shipping building, which allowed them to maintain control over those activities.
Prior to investing in cheese making equipment, he studied the financials. At that time his business plan showed potential in gift baskets. About ten years earlier, a gift basket project was unsuccessful. Now the website, gootessacheese.com, features a range of baskets.
When COVID 19 hit, Goot Essa’s 75 restaurant customers shrank to 5. He pivoted his website to attract online cheese sales. Also, he expanded into wineries and outdoor seating.
Plus, a Philadelphia Inquirer newspaper story led to more media coverage and new business.
Currently, Goot Essa’s market connects five dairy farms—three sheep, one for goats, and another for cows. Esh’s mission is to keep families on the farms.
In addition to his business plan, Esh credits his successes with keeping good records, using the plan as a guide, staying disciplined and willing to change if needed, plus being willing to learn.
In using a business plan, Goodling suggests targeting specific questions to determine if the business is functioning the way the owner desires.
He also sets out key components such as the business concept, customer identification, and techniques to monitor cash flow.
Tools to assess performance can include measures of liquidity, profitability per product, efficient use of capital, ability to handle expenses, and maximize income—all toward increasing net worth as the ultimate goal.