Your business plan is probably the most important part of your new business.  It is a roadmap of where you will be going.  We get calls from many people who have made their first oil four years after planting their trees, asking for bottles and labels.  When asked about the market segment and demographic they are trying to sell to, they have no answer.  They are really going about things backwards. 

While the business plan is a flexible roadmap which can be edited if market or orchard conditions change, it at least gives you a hint of what lays ahead.  You can't decide on an orchard layout until you choose your olive variety.  You can't choose an olive variety unless you know what type of oil you are trying to make.  The oil you make should appeal to your planned buyer.  Bottles labels and decisions about whether to go organic will also depend on who your customer is and what price the oil will be.  Below is a standard business plan with some things you should consider.  You can find other skeleton business plans on the internet or in business texts.

The Executive Summary of a Business Plan is a one page synopsis of your entire plan.  It is often written last.  It is what you would tell a friend or investor over a 5 minute cup of coffee.  While most olive oil entrepreneurs will not go to a venture capitalist, the executive summary would be useful for your banker or accountant.  The Summary should stand alone and should not refer to other parts of your plan.  

The Company Overview is a brief (one or two pages) description of the company you have founded or want to found. It will address such things as:

	What is the name of your company?
	Does it currently exist or when will it be formed?
	Company organization: sole proprietorship, partnership, or corporation?
	Company Size - small local company or giant multinational?
	Company location?

Mission Statement  - A mission statement is a single phrase or several sentences  which sum up your company philosophy. Many olive oil companies probably don't need a mission statement unless it is an important part of your marketing. It can help you stay focused on your primary objective.

A Mission statement such as "The best extra virgin olive oil in California" is trite and doesn't convey your individual goal.

A mission statement such as "Our Premium organic extra virgin olive oils from the Trinity foothills respect your health and the environment" is much better. It conveys this grower's environmental and health concerns and gives it a unique regional identification.

Company History - Give the history and current status of your company.  Were you a walnut farmer now moving into this market or are you a specialty foods producer now becoming a farmer? If your company is new, skip this section

Market and Products - In one or two paragraphs, answer the following questions:

	What market needs will your company address?
	Who are your target customers?
	What products and services will your company sell?

Objectives - Describe your objectives in creating this company.

	Where are you going with your company?
	What are your goals for the company (keep it small, grow it big, franchise it, etc.)?
	Do you have an exit strategy for yourselves and your investors (sell to larger company, go public, pass on to children, etc.)?

The Product and Services section is a detailed description of the products you will be selling. Will you be selling a single blended oil or will you have a whole line of oils.  Some producers press oil at different times of the year to produce an "early" and "late" oil with different characteristics.  Will you have different varieties which will be blended or will you sell straight varietals.  While blended oils have traditionally gotten the highest ratings and appeal to the broadest market, single varietals are interesting and can increase sales out of curiosity and appeal to individual tastes.  Some olive oil producers will sell pickled olives or olive tapenades.  Do you want to sell the oil in different types of packaging, such as stainless fustis or gift baskets? Will you sell olive oil accessories such as tasting or dipping bowls and olive motif tablecloths. Will the product be a condiment, staple or be bought as a gift or souvenir. 

Description:

	What exactly is your product. What isn't it?
	Who will purchase it? Why?
	What is unique about your products?
	What are its features and benefits?
	How will it be priced?

Proprietary Rights  - What proprietary rights do we have to the product? Can you call it the first Oklahoma olive oil?  Is it the only oil made from pitted olives using a special type of mill or press? Some flavored oils use secret infusion techniques to get the best flavor and prevent spoilage.

Stage of Development - Will your oil be ready to sell in 7 years after finding property, preparing it, planting trees and letting them grow?  Or are you buying a producing orchard which is ready to pick?
 

The industry and the marketplace in which you will compete.

Industry Analysis - figures and statistics on olive oil consumption per capita, etc.

	How do we define our industry? Food industry vs. specialty food vs. gourmet food.  Cooking staple vs. condiment
	What are current trends and important developments?
	Who are the largest and most important players? Big multinationals like Unilever
	What problems is the industry experiencing? Discuss tainted oil, olive fly, health concerns
	What national and international factors influence the industry? Include EU subsidies of as much as $5 per liter, etc.
	What are growth forecasts? What segments are growing - Health food, organic foods, "heart healthy", "lite" flavored

Marketplace Analysis

	How do we define our marketplace? The marketplace is a subset of the industry.  This town, this state, this country, international
	How large is it and how fast is it growing?
	How is your marketplace segmented? Ethnic buyers, "foodies", farmers markets
	What companies currently service this market? Sales reps, distributors, retailers, wholesalers, the large Spanish and Italian exporters
	What trends are important in your marketplace?

Customer Analysis - This identifies the unmet needs your customers are experiencing which you will take advantage of.  You need to talk to grocers, deli owners, supermarket managers to figure out your customer. Look for industry reports and polls taken of your typical customer.

	Who is your customer?
	Are there segments in this market?
	What motivates buying decisions?  Is it price, the bottle, the color of the oil, the label font or wording?  Do customers like buying a local product?
	Are customers unhappy  with current offerings?

Competitor Analysis - identify direct and indirect competitors.  An indirect competitor might be walnut or other specialty oils.

	Who are your principal competitors? Are they the big olive oil importers or other local growers?
	What is there size, location, target market, and other important characteristics?
	What are their products? identify price, quality, features, and distribution
	Why is your product better than theirs?
	What problems do your competitors have with their customers.  What concerns do their customers have?

 Marketing strategy is all about finding your customer.  The best oil is useless if you don't have buyers for it.  In this section you must convince yourself, and then the reader, that there is an eager market for your product.  In prior sections you have explored the marketplace, competitors and unmet needs and opportunities.  Here is where you will discuss filling those opportunities. How is your oil different from your competitors? What unique features and benefits will your products have? Who are your customers? Research should involve actual customers. 

Some olive oil entrepreneurs will buy an oil made from the variety they intend to plant, bottle it in the proposed container and sell it at farmer's markets or do focus groups, give it to friends, etc. to get feedback.  This should all be done before you buy an acre of land or plant a single tree.  (See private labeling for help in choosing or blending oils) You may be able to set up a card table at your local market if you offer tastings of their other offerings.  Try to be objective and don't let your bias toward your product affect your test subject.  This is a learning experience.  Why does the customer prefer the oil they do?  Is it a product attribute you hadn't thought about, like the color or bottle cap/cork?  Things to consider:

	What segment of the market are we targeting? (Timid buyers wanting a bland oil with broad appeal, adventurous types who want an oil like they tasted in Morocco?)
	What characteristics define your target customers? (High income, price sensitive, environmentally concerned, etc.?)
	Who are your customers? Distributors? Retailers? Distribution can be a real headache.  Can you get your product in a high-end catalog or gift chain?
	Why will the customer prefer your product? (Made in their hometown, label sounds exotic or trendy)
	What problems are we solving for these customers? (A gift to bring to a dinner party / housewarming for non-alcoholic drinkers, souvenir of a trip to the coast, etc.)
	What evidence do we have that potential customers want your product?

Buyers in Italy were asked what characteristics they were looking for in an olive oil. Results of the survey are below.  How do you think this relates to your potential  customers.  (from Olivae no 90, Feb 2002)

Product/Service Strategy  - How does your product meet the needs of your target customer:

	What specific product characteristics meet the needs of your customers? ( small size allows impulse purchase, tall bottle prevents storage in cabinet so oil will be seen and used, raffia and wax dip looks like gift, pungent taste differentiates for supermarket brands, etc.)
	What differentiates your product in your target market? (attached booklet describes unusual varieties used in blend, crate or bag arouses curiosity)
	How does it differ from that of your competitors? (made in your home county/state, made by unusual production method, picked by the disabled or homeless)
	What are the strengths of your oil? (higher price can be strength - implies higher quality, higher price can be weakness, less value)
	How quickly and how effectively can your competitors respond to your business? (6 months after a citrus olive oil won a NASFT award, nearly twenty other producers were offering a similar product)
	Pricing Strategy (biggest mistake is to price too low.  Smaller bottle sizes may sell briskly for three times the per ml price of larger bottles)
	Will your target market accept your price? ( have you tried selling test oil at a street fair or farmer's market?)

Distribution Strategy  - Distribution can be a big headache for olive oil makers.  Many markets will want you to stock shelves and will allot more space to a company with a complete line of products.  Some producers make or buy point of sale displays made of cardboard for ends of aisles, etc. These are given to the market to generate excitement.  Some producers have had success with bulk containers in the market with a spigot.  The customer chooses and fills an empty bottle.  Refills are cheaper as the customer already has the bottle.   Tall bottles which don't sit on shelves can force the retailer to display them on top of deli cases where they are at better eye level.  Or they discourage the retailer from accepting the product.

Some producers sell only at weekend markets or via mail order or internet sales.  Wineries often sell their oil in the gift shop.  Missions and convents in California sell their oil at fund raisers and in the gift shop.  Could you get your oil in an oil of the month club? Be creative

	Describe your distribution channels? Why these?
	How will you gain access to these channels?

Advertising and Promotion Strategy - How will people know you have a product to sell. (Let us know and we will promote your oil at the Olive Oil source for free)

	How will you advertise and promote your oil? (print advertising, public relations, personal selling, printed materials, etc)
	Why will this be strategy be effective in reaching your target customer? (an article about your organic oil and your philosophy in an organic foods journal will target customers attracted to these types of products.  The business reporter of a regional newspaper will help promote a local product.)

Sales Strategy - Can you hire a salesperson to be as enthusiastic as you were at the local weekend market?  Will a specialty food distributor be able to get your product in boutique food stores?

How will your product or service be sold? (Personal selling, internet, direct mail, print ads, trade shows?)

Who will do the selling? An internal sales force or a representatives or distributor?

Can you afford to recruit, train, and compensate your sales force?

 Marketing and Sales Forecasts - Can you put together a rough sales volume and revenue forecast with marketing and sales expenses?  Try to go several years out.  Once you begin selling you will be able to fine-tune your forecasts but you need to start somewhere.

Operations can include farming, transportation, logistics, travel, printing, consulting, after-sales service, etc. For an olive oil grower this would include land preparation, planting, pruning, watering, harvesting, transportation of olives, milling, storage, bottling, shipping of finished product, etc.

How will you produce and deliver your oil? Don't assume you must become a farmer. Many of the oils awarded gold ribbons at the L.A. county fair each year are produced by companies which purchase an oil from a reputable supplier which has been blended to their specifications.  These companies can concentrate on marketing and sales instead of pest control.  Very few U.S. olive oil companies actually grow all the oils and products that they sell.

	What will you do in-house, and what will you outsource? (Do you want the headaches of your own mill with the resultant control it gives you?  Can you afford a bottling line or will you have someone else bottle your oil.)
	What comparative advantages do you have with your operational design? (The olive variety you pick, pruning method and harvesting methods you choose can give you an advantage.  Some companies are planting special dwarf clone varieties which are planted in hedges for cheaper mechanical harvesting.)

What kind of people will you need to hire? (Farm help, consultants, drivers for delivery vehicles, seasonal labor for picking, bottling, etc.)

Operations plans include plans for worker safety, emergencies, toxic waste disposal, employee compensation and payroll. Handicap access and discrimination plans may be needed. Compliance with city, county, and state health departments will take some research. See Industry Regulations

Operations Expenses - Include a description of the operating expenses which appear in your financial statements. For help on projected costs see

 

Development describes your timetable for going from research to selling the final product.  If you are starting an orchards this timetable will be a long one.  Include development expenses.

Management is the people part of your plan.  What is the ownership, who does what?  Do you want an advisory board, stock, corporate status, etc.  Who will be your key managers and what are their titles and duties.  With most olive oil companies there is a production person responsible for the orchard and oil production and a marketing and sales person responsible for promotion and getting the product to the customer.

This section should include cash-flow projections, income statements and pro-forma balance sheets going several years into the future.  If you are planting trees, you need to know you have enough capital to survive until you start selling product. What are your financial risks and capital requirements?  Where will the capital come from?  If you will have investors, how will the investment be paid back?  After creating pro-formas, many companies decide they need to buy an oil similar to the one they will be making to sell while their trees are getting started.