Hawaii Agribusiness Guidebook
Edited by Charles M. Kinoshita
With contributions from Agribusiness Incubator Program, University of Hawai‘i Agricultural Development in the American Pacific Program, University of Hawai‘i at Mānoa Oahu Resource Conservation and Development Council USDA Rural Development
College of Tropical Agriculture and Human Resources University of Hawai‘i at Mānoa
Table of Contents
Page No.
Introduction...... 1 Accounting and Taxes...... 3 Basic Bookkeeping...... 4 Cost of Production ...... 12 Hawaii Business and Tax Filings...... 16 Cash Flow...... 20 Outsourcing the Back Office ...... 23 Basic Management Via Financial Statements...... 26 Marketing...... 31 Target Markets...... 32 Positioning and Branding...... 35 The Marketing Mix...... 38 Regulations ...... 43 Permitting, Licensing, Certifications and Zoning Requirements...... 44 Conservation Planning...... 47 On-Farm Food Safety ...... 52 Business Structure and Registration ...... 56 Business and Crop Insurance...... 60 Labor Law Requirements...... 64 Other Lessons...... 69 Borrowing Money for Your Business...... 70 Acquiring Grant Support...... 75 Distributing Your Product Within Hawaii...... 80 Exporting Off Oahu...... 83 You Are Not Alone!...... 87
Oahu RC&D Agribusiness Training Series
Introduction Would you like to run your own agricultural business or take your present agribusiness to a higher level?
Starting, owning, and/or improving your narratives in the individual lessons of the own agribusiness might be a lifelong dream Guidebook are brief, highlighting important of yours. With determination, preparation, points to be discussed by the instructor research, and a lot of hard work, you could and/or understood by the reader. The turn that lifelong dream into a reality. lessons span a continuum of issues ranging Running an agribusiness could be profitable from accounting and taxes, to marketing the and rewarding, but there are a number of company and its products, to regulatory potential pitfalls – you need to be able to compliance, and other aspects that any recognize, then address, those pitfalls. agribusiness needs to understand to be The Hawaii Agribusiness Guidebook successful. The Guidebook is not meant to was conceived as a consolidation of training be an encyclopedia on agribusiness, rather a information into one basic, need-to-know summary of important points and tips for reference for you. It was prepared with the farmers relating to the business (versus intention of being presented in a classroom production) aspects of running an format, supplemented with other training agribusiness. You might find that you need material; however you may also use this more information about a particular subject Guidebook independently, depending on than is presented in this Guidebook – each your schedule and learning style. lesson includes a list of additional references The owner of a small agribusiness must, on the subject covered in the lesson. In using by necessity, be a generalist, who knows this Guidebook, you won’t find all the enough about all facets of running the solutions to the myriad of pitfalls that might agricultural operation and business. Over- arise in agribusiness, but you’ll know what concentrating on any one aspect of the questions to ask and where to obtain business and neglecting everything else is a additional information. sure way to fail. This Guidebook was The Guidebook is divided into four developed in the same vein – it consists of a chapters, each containing several lessons: series of lessons on various aspects of Accounting and Taxes takes you through owning and operating an agribusiness that a basic bookkeeping, determining your cost of generalist needs to understand and manage. production, tracking cash flow, and Preparation of this Guidebook was a preparing financial statements so that you collaborative effort of the University of may make informed production and business Hawai‘i at Mānoa’s College of Tropical decisions, and submitting financial filings Agriculture and Human Resources’ required by the government. (CTAHR) Academic and Student Affairs Marketing covers identifying and Office, the University of Hawai‘i’s becoming familiar with your target markets, Agribusiness Incubator Program, CTAHR’s positioning and branding your company, Agricultural Development in the American products, or services to your markets, and Pacific Program, the Oahu Resource adjusting your marketing mix to appeal to Conservation and Development Council, your target markets. and USDA Rural Development. The
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Regulations deals with permitting, Starting and operating a successful licensing, certification, and zoning business in today’s world requires a lot of requirements; conservation planning; time, energy and belief in a lifelong dream. insurance and labor requirements; food The belief in that dream is what will safety on the farm; and structuring and motivate you to take the journey necessary registering your agribusiness. to turn your dream into a reality. The more Other Lessons covers such topics as work and dedication you put into nurturing distributing your products locally or that journey, the more successful your future exporting your products; obtaining loans and will be. other financing; and provides a listing of various organizations that offer services to Prepared by: agricultural entrepreneurs. Office of Academic and Student Affairs, CTAHR, University of Hawai‘I at Mānoa Each lesson is intended to be covered in and Oahu Resource Conservation and Development the classroom in a single 30 to 90 minute training session.
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Accounting and Taxes
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Basic Bookkeeping Tracking your money for compliance and business success
Overview Sales Receipt Book Bookkeeping is the recording of all financial transactions for a business. Keeping good financial records (“books”) is an essential part of sound business management and a requirement for success. Good financial records will provide you with information to make sound business decisions and are necessary to get financing and to pay taxes. Checking Account – Bank checking Why is this important? account that is used only for your business You need accurate records of your transactions, with a checkbook that transactions to monitor the progress of your generates carbon copies. Use this account to farming business – to determine whether pay vendors who don’t accept cash or credit your business is improving, which crops are cards, help manage your cash flow, assist in selling, and what changes you could/should tracking business expenses, as evidence of make. payment, and to capture information for the You need records to prepare accurate Monthly Expense Record. financial statements for grants and loans and Pay for business expenses using the to manage your business. checks from this account. Don’t pay for non- You can maximize your tax savings by business items using this account. identifying non-taxable income and tracking deductible expenses. Checking Account Register – Log sheet that Good records allow you or your tax records all transactions for the checking preparer to easily prepare your tax return, account and maintains the expected bank saving your business time and/or money. balance. The register is used to track available bank balance and when reconciling Basic system components against the bank’s monthly statement. A basic manual bookkeeping system should Record all checks written and other include the following: account transactions (e.g., ATM withdrawals, deposits) in this log and update Sales Receipt Book – Book of receipts, each the running balance. with a unique number, with carbon-copy duplicates for filing, which are used for evidence of sales and for capturing information for the Monthly Income Record. Fill this out each time you make a sale; give the original to the customer.
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Expense Filing Folder – Durable 12-pocket Monthly Expense Record – Log sheet to accordion folder, with each pocket labeled record expenses for the month, categorized with the months of the year. The folder is by expense type. This record provides a used to track business expenses, as evidence recap (at-a-glance) of expenses per category, of payment, and to capture information for and captures information for the Annual the Monthly Expense Record. Expense Summary. Place all receipts for business purchases Record information from the Expense into the corresponding month pocket. Filing Folder for the month, along with the checks written in the month and any other Expense Filing Folder business expenses paid with cash or credit card. Write down the amounts for each item or service purchased in the correct category.
Annual Summaries of Income and Expenses – Log sheets to record income (sales) and expenses for the year, categorized by crop and expense category, which give you an “at-a-glance” recap of all Monthly Income Record – Log sheet to farm income and expenses throughout the record sales information for the month, with year and to determine net profit/loss. each crop/product/service receiving a Transfer totals from the Monthly Income separate sheet. This record provides (at-a- and Expense Records to the corresponding glance) a recap of total sales per product and fields on these tables. For the Annual who it was sold to, and captures information Income Summary, total the entries by month for the Annual Income Summary. and then by crop/product/service. For the Transfer information from the Sales Annual Expense Summary, total the entries Receipt Book and record any sales for which by month and then by category. you do not use the Sales Receipt Book for the month. Different products go on Capital Expense Record – Log sheet to different sheets. record equipment purchased for the business that are depreciable on your tax returns, used in preparing your tax returns to calculate depreciation, amortization or depletion deduction and to determine your basis for computing gain (or loss) when you sell or otherwise dispose of the equipment. You will maintain this record for as long as there are items on the list that you are still depreciating, amortizing, or depleting.
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Record any purchases of items that cost . Payroll Taxes (Federal and State) more than $500 and that you expect to use in . General Excise Taxes more than one tax year. . Income Taxes (Federal and State)
File copies of related documents in each section as you receive or generate them. Order the items chronologically, with the newest documents toward the front of each pocket.
Daily record keeping activities Every day: Folders for Other Records – Six-pocket . As you make sales, record each sale in accordion folder, used to organize your Sales Receipt Book. If you make a documents, with the following sections sale that does not use the Sales Receipt (labeled): Book (e.g., mail order sale over the . Bank Account Statements internet), enter the sale information in . Equipment and Capital Expense Records the Monthly Income Record. . Loan and Credit Card Statements
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. As you purchase items, save the receipt Transfer Expenses in the proper month’s pocket of the . Transfer all expense information from Expense Filing Folder. If you make a your Expense Filing Folder and purchase that does not produce a receipt checking account register to a new or use the checkbook, write down the Monthly Expense Record for the month. following information on a sheet of Total the expenses by category. paper: Date Bank Reconciliation Vendor . Perform a bank reconciliation of each Total amount bank account. A bank reconciliation Description of item(s) with amount involves comparing the account balance of each item (if they would fall under given by the bank with that of your two or more expense categories) records (Checking Account Register) Method used to pay (e.g., cash) and explaining or resolving any discrepancy. A discrepancy may simply File the sheet in the Expense Filing Folder. be due to a difference in timing between . Any transaction that impacts your the bank’s records and your own, but if checking account should be recorded in errors are found, they should be the Checking Account Register, and the corrected so that your records and the balance updated. bank’s are in sync. The worksheet . If you purchase a capital expense item, below can be used to reconcile your record it in the Capital Expense Record bank account. and save the receipt in the Other Records . Enter the Bank Statement Date in field Folder. A.1. . File copies of any relevant papers you . Enter the ending Bank Statement receive and things you create in their Balance in field A.2. respective pockets of the Other Records . Enter Deposits in Transit in section B. Folder. (Deposits in Transit are any deposits listed in your check register that have Monthly activities not been posted to the bank statement.) At the end of every month (or more . Calculate and enter the Total Deposits in frequently): Transit in field B.1. . Enter Outstanding Checks in section C. Transfer Sales (Outstanding Checks are any checks that . Transfer all the sales information from you’ve written that have not been posted your Sales Receipt Book to a new to the bank statement.) Monthly Income Record for the . Calculate and enter the Total month/crop, and total the number of Outstanding Checks in field C.1. units sold and dollar amounts. If you want to calculate your average price per unit, divide the total number of units by the total dollar amount.
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. Enter the Calculated Account Balance in Check Register and Bank Statement to field D.1. This is computed as shown identify discrepancies. Repeat the bank below: reconciliation until the Variance (F.1) is A.2 Bank Statement Balance equal to 0. + B.1 Total Deposits in Transit – C.1 Total Outstanding Checks = D.1 Calculated Book Balance Transfer Annual Income Summary . Enter the Ending Check Register Date . Transfer the total dollar amount of the for the period shown on the bank sales for the month, per crop, to the statement in field E.1. corresponding crop/month on the Annual . Enter the Check Register Balance as of Income Summary. the Ending Check Register Date in field E.2. (This is the balance in your check register as of the date in E.1.) . Calculate the Variance (F.1) between the Calculated Account Balance (D.1) and the Check Register Balance (E.2). This calculation is shown below: D.1 Calculated Account Balance – E.2 Check Register Balance = F.1 Variance . The Variance (F.1) should be zero (0). If the Variance is not 0, review your
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Using your records for your taxes Report your farm income on Schedule F (IRS Form 1040). Use this schedule to calculate the net profit or loss from regular farming operations. . Income from farming is reported on Part I of Schedule F (Form 1040) and includes amounts you receive from cultivating, operating, or managing a farm for gain or profit, either as owner or tenant. Transfer the total from the Annual Income Summary to box 1 of . Transfer the total dollar amount of the Schedule F, Part I. expenses for the month, per expense
category, to the corresponding category/month of the Annual Expense Summary.
. The ordinary and necessary costs of operating a farm for profit are deductible business expenses. Part II of Schedule F lists expenses common to farming operations. Transfer the annual total for each expense category from the Annual Annual activities Expense Summary to the corresponding At the end of your fiscal (tax) year: expense category of Schedule F, Part II. . In the Annual Income Summary, total the monthly dollar amounts for each crop and total the dollar amounts for the crops for each month. . In the Annual Expense Summary, total the monthly dollar amounts for each category and total the dollar amounts for the categories for each month.
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for computing gain or (loss) when you sell or otherwise dispose of the property. . When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.
Next steps and resources . Purchase the record-keeping tools mentioned in this article. . Develop your own record-keeping forms based on the examples in this article, or obtain electronic copies of the forms by contacting one of the following:
Farm Services Agency 99-193 Aiea Heights Dr. #207 Aiea, HI 96701 (808) 483-8600 x2 http://www.fsa.usda.gov/FSA/stateof fapp?mystate=hi&area=home&subje ct=landing&topic=landing
How long should you keep records? Oahu Resource Conservation and . You must keep your records as long as Development they may be needed for the 99-193 Aiea Heights Dr. #111 administration of any provision of the Aiea, HI 96701 Internal Revenue Code. Generally, you (808) 483-8600 x113 must keep records that support an item http://www.oahurcd.org/ of income or deduction for at least 3
years from when your tax return was due Agribusiness Incubator Program or filed or within 2 years of the date the 3050 Maile Way, Gilmore 115 tax was paid, whichever is later. Honolulu, HI 96822 . If you have employees, you must keep (808) 956-3530 all employment tax records for at least 4 http://aip.hawaii.edu/ years after the date the tax becomes due
or is paid, whichever is later. . If you are using, or are planning to use, a . Keep records relating to property until tax professional for assistance in the period of limitations expires for the preparing your tax return, ask them for year in which you dispose of the input on how they would like you to property in a taxable disposition. You keep records for their purposes. must keep these records to figure any . Definitions of deductible and non- depreciation, amortization, or depletion deductible expenses on Schedule F can deduction and to figure out your basis
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be found on the IRS web site (www.irs.gov) in Publication 225 - Farmer’s Tax Guide.
Prepared by: The Agribusiness Incubator Program University of Hawai‘i
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Cost of Production Determine your true costs per unit to evaluate pricing and more
Overview recordkeeping, or receipts) or gathered Cost of Production reflects the dollar estimates. The costs you list on the Cost of amount associated with growing a specific Production Worksheet should reflect the crop. Cost of Production is commonly current cost (rather than historic costs). expressed as a unit quantity (e.g., dollars per pound). For example, to produce an acre of Estimate Annual Production – Production tomatoes, you may need seed, fertilizer, can be determined based on your prior irrigation water, labor, machinery time, etc. experience or can be based on the average of In addition, you may have office, a smaller sample. For example, if on advertising, and insurance expenses. Each average, one tomato plant produces 15 of these is associated with a dollar value. pounds of tomatoes per cycle and you have When you add them up, you can determine 2,000 plants per acre, your production the cost to produce each pound of tomato. estimate would be 30,000 pounds per cycle per acre. If you have 4 cycles per year, your Why is this important? annual tomato production is 120,000 pounds Understanding your Cost of Production per acre-year. helps you: The Cost of Production Worksheet and . Determine the optimum product pricing instructions referenced in this document can and sales volume be used for crop production (e.g., . Forecast the impact of changing costs vegetables, nursery plants). Value-added (e.g., rising fuel prices) product calculations will differ. . Determine individual product profitability Determining direct costs . Prioritize cost-cutting efforts Direct Costs can be thought of as those costs directly associated with a specific crop. Getting started Examples of Direct Costs include: Cost of Production can be calculated in . Farm Labor several ways, depending on the intended . Planting Expenses use. In general, calculating the Cost of . Weeding Costs Production requires identifying all costs . Fertilizer Costs associated with your operation, then . Other Materials allocating them to either a specific crop (aka . Packaging Costs “Direct Costs”) or towards general business . Delivery Costs expenses (aka “Indirect Costs”). Use the Crop Specific Worksheets to Identify Expenses – Specific expenses can document information about your crop as be determined using historic information well as all tasks and corresponding costs (from tax forms, your financial associated with each crop.
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Direct Costs Itemized in Crop Worksheet example
The Crop Sheet calculates the per pound Direct Cost associated with each crop cycle. Indirect Cost Allocation Worksheet example
Determining indirect costs Indirect Costs are those required for the farm business to operate and typically do not vary greatly by individual crop. Examples of Indirect Costs include: . Utilities . Insurance . Advertising and Marketing . Bank Fees and Interest . Professional Services (e.g., accountants and attorneys) . Office Supplies
Use the Indirect Cost Allocation Worksheet to document annual expense information on your Indirect Costs.
The Indirect Cost Allocation Worksheet will multiple crops, you will need to allocate a calculate your total annual Indirect Costs. percentage of your Indirect Costs to each crop. Allocating Indirect Costs per square Allocating costs foot of production is a common practice. If you are producing a single crop, you can The Cost of Production Worksheet will add your annual direct and indirect expenses calculate the Indirect Cost per square foot and divide the sum by your annual sales and allocate it per crop. volume to determine your cost of production per unit; however, if you are producing
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Use the Crop Worksheets to enter Annual Production Itemized in Crop Worksheet information about the size of specific crops example and use the Production Space Worksheet to enter information about your non-producing areas.
Production Space Worksheet example
Use the Unit Sales Analysis Worksheet to enter your sales price per pound.
Unit Sales Analysis Worksheet example The Cost of Production Worksheet uses the entered information to allocate Indirect Costs based on the acreage of each production. It will also allocate a percentage of the non-producing areas to each crop.
Investment information Use the Capital Investment Worksheet to enter information about start-up costs and equity provided to the company. The desired return on the initial capital investment can also be included here. The Cost of Production Worksheet calculates your desired return per square foot and allocates the amount to each crop.
Capital Investment Worksheet example The Cost of Production Worksheet will calculate a plant loss percentage based on production and sales information.
Using the results After documenting the information above in the Cost of Production Worksheet, you will be able to analyze the following:
Forecasting – You will be able to estimate your annual revenues and expenses. Cost, volume, and profit analysis Use the Crop Worksheet to enter your Breakeven Price – You will know how estimated annual production and sales much you need to sell your product for in volume for each crop. order to breakeven.
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Breakeven Units – You will know how Oahu Resource Conservation and many products you need to sell at specific Development prices to cover your costs. 99-193 Aiea Heights Dr. #111 Aiea, HI 96701 Cost Reduction Targeting – You can (808) 483-8600 x113 identify high cost items and target specific http://www.oahurcd.org/ costs for possible reduction. Agribusiness Incubator Program Product Mix Selection – You can evaluate 3050 Maile Way, Gilmore 115 the profitability of each product and Honolulu, HI 96822 determine whether you should change your (808) 956-3530 crop mix. http://aip.hawaii.edu/
Adjustments – You can use the worksheet to Apply for personalized assistance from: evaluate the effects of adding staff, changing Agribusiness Incubator Program prices and expenses, and increasing or 3050 Maile Way, Gilmore 115 reducing production. Honolulu, HI 96822 (808) 956-3530 Next steps and resources http://aip.hawaii.edu/ . Use the Cost of Production Worksheet to document all costs and production Prepared by: information. The Agribusiness Incubator Program University of Hawai‘i . Obtain electronic copies of the Cost of Production Worksheet by contacting one of the following:
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Hawaii Business and Tax Filings Standard required filings for businesses operating in the State
Overview on or before the 15th day of the following Operating a successful business generates month. Employers with tax liabilities revenues for you, the owner, which, in turn, exceeding $100,000 a year, must file on or requires the submission of several financial before the 10th day of the following month. documents (primarily in the areas of Estimates of income are due on the 20th of business registration and taxes) with April, June, September and January. appropriate State agencies. This lesson The net income of corporations is taxed gives an overview of the required financial at a rate of 4.4% if taxable income is not filings you have to address to ensure that over $25,000; 5.4% if over $25,000 but not your business is in compliance with State over $100,000; and 6.4% on all taxable laws and regulations. income over $100,000. The tax imposed on capital gains is 4%. Deductions, in general, Why is this important? conform to the Internal Revenue Code. If you generate income, own property, buy Reports and taxes are due on the 20th or sell goods, or hire employees, most likely day of the fourth month after the end of the you will have to pay taxes. There are taxable year. Income estimates are due on several taxes associated with running a the 20th of September and January. business, which are described in the following section. General Excise (Gross Income) Tax To ensure that you pay the appropriate (GET) – General Excise Tax (or GET) is a amount of taxes and avoid any penalties or tax levied on gross income (i.e., total liens, it is essential that you keep accurate business income before any business records (this is described in greater detail in expenses are deducted) derived from the “Basic Bookkeeping” lesson of this business activity in Hawaii. Guidebook). GET is calculated on gross income, gross receipts or gross proceeds of all Types of business-related taxes business activities: 0.5% on wholesaling, Common taxes that you have to file as a new intermediary services, manufacturing, business include: producing, canning, and activities of businesses operated by blind, deaf or totally State Income Tax – Depending on the disable persons; 0.15% on insurance business structure of your company, you solicitors; 4% on retail sales of goods, have to file taxes with the State government services, and other activities. Exemptions on either an individual or corporate basis. are allowed for goods manufactured for Individual income tax rates vary from export and certain services and a refundable 2% for the first $1,500 to a maximum 10% tax credit for GET paid on depreciable for taxable income over $20,500. Capital tangible personal property is available. gains are taxed at a maximum 7.25%. Reports and taxes are due monthly by Reports and taxes are due on the 20th the end of following month. You may elect day of fourth month after close of the to file quarterly or semi-annually under taxable year. Withholding returns are due certain conditions. An annual summary and
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reconciliation return is due on the 20th day Motor Vehicle Weight Tax – On vehicle of the fourth month following the tax year. weights are as follows: . Hawai`i, commercial vehicles: 1 cent per Use Tax – Use Tax is a tax on tangible pound; passenger vehicles: 0.5 to 1.0 personal property imported or purchased cent per pound; $6 minimum on motor without payment of the GET. Rates are vehicles. 0.5% on goods imported for resale at retail; . Honolulu, commercial vehicles: 2 cents 4% on all other imports. There is a per pound; passenger vehicles: 1.25 refundable income tax credit for Use Tax cents per pound; $12 minimum on motor paid on depreciable tangible personal vehicles property. . Kauai, commercial vehicles: 2 cents per The Use Tax was enacted to reduce the pound; passenger vehicles: 0.75 cent per price advantage that untaxed out-of-state pound; $12 minimum. sellers of goods, services, and contracting . Maui, commercial vehicles: 1.5 cents per have over Hawaii sellers. Because of the pound; passenger vehicles: 0.75 cent per complementary nature of these taxes, pound; $6 minimum on motor vehicles. businesses are automatically registered for . In addition to county taxes, state tax of: the Use Tax when they register for the 0.75 cents per pound to 1.25 cents per General Excise Tax, and report both taxes pound; $3 minimum. Flat rate of $150 on combined General Excise/Use Tax for vehicles weighing more than 10,000 returns. pounds.
Real Property Tax – Real Property Tax is Fees are paid annually upon vehicle that assessed on real property, land and registration renewal. improvements. Assessments are taxed at 100% of "fair market value." Maximum Additional financial filings exemption for owner-occupied homes is Registering your business – In Hawaii, $40,000, with multiple exemptions allowed corporations, partnerships, limited liability for those over 55. There are various rates for companies, and limited liability partnerships land, improvements, and classes of property. must be registered with the Department of Fiscal year 2007 agricultural rates per Commerce and Consumer Affairs (DCCA), $1,000 net assessed value were: Hawai`i, Business Registration Division and are $9.00; Honolulu, $8.57; Kauai, $4.30 required to file an annual report. (building), $6.95 (land); Maui, $4.50. For more information on registration and Taxes are paid in semi-annual payments. to obtain required forms, visit the DCCA In Honolulu, assessment notices to taxpayers website at http://hawaii.gov/dcca. are sent by December 15; any appeals by the taxpayer must be filed by January 9; the tax Unemployment Insurance – An individual or base is certified by February 1; and May 30 organization, which has or plans to employ is the last day to amend rates. All other one or more workers performing services counties: assessment notices to taxpayer by must register with the Unemployment March 15; appeals filed by April 9; tax base Insurance (UI) Division within twenty (20) certified by April 19; June 20 last day to days after services in employment are first amend rates. performed. A family-owned corporation which has two family members, related by blood or marriage, who, as the only
17 Oahu RC&D Agribusiness Training Series employees each own at least 50% of the Temporary Disability Insurance – In Hawaii, shares issued by the corporation may apply employers are required to provide for exclusion from UI coverage. To elect Temporary Disability Insurance (TDI), or this exclusion option, Form UC-336, sick leave benefits, when their eligible “Election by Family-Owned Corporation to employees are unable to work because of a be Excluded From Coverage nonwork-related illness or injury. The Under Section 383-7(20),” can be obtained employer may pay for the entire cost or at http://www.hawaii.gov/labor/ui or from share the cost with the employees eligible the nearest UI office. for coverage, in which case the employer Employers must complete Form UC-B6, may deduct one-half the premium cost but “Employer’s Quarterly Wage, Contribution not more than 0.5% of the employees’ and Employment and Training Assessment weekly wages up to a maximum of $4.21 Report,” and pay all contributions and per week for 2008, which is set annually by assessments by the end of the month after the Disability Compensation Division. The the end of the calendar quarter. Completed employer may select from several options to reports and payments should be mailed to provide TDI, which are described in detail State Tax Collector, PO Box 3223, on its website at http://hawaii.gov/labor/dcd Honolulu, HI 96801-3223. Employers where you can find additional information preferring to file reports and make payments and required forms. online can download the free Quarterly Wage Reporting System (QWRS) software Next steps and resources program to prepare reports, compute taxes . Tax rates and due dates should be and transmit reports and payment. Go to: confirmed with the appropriate state and https://hui.ehawaii.gov to download the county agencies to ensure that you are in QWRS software and create an account to compliance with the most recent obtain a username and password. regulations or you should consult a tax professional for assistance. Additional Workers’ Compensation Insurance – In information can be found in the State of Hawaii, employers having one or more Hawaii, Dept. of Taxation’s Tax Facts employees (other than those excluded from for agricultural producers which can be this requirement), full-time or part-time, found online at permanent or temporary, are required to http://hawaii.gov/tax/taxfacts/tf01- provide Workers’ Compensation (WC) 02.htm coverage for their employees. Employers . The Business Action Center can assist may provide WC coverage by purchasing you with obtaining your GET license, insurance from an authorized carrier or Unemployment Insurance tax becoming a self-insured employer who pays registration, business and trade name statutory benefits directly to its employees registrations and Federal Employer’s (must be approved by the Dept. of Labor Identification Number (FEIN). They also and Industrial Relations). Additional provide comprehensive information on information and required forms can be licensing requirements for the state, located on the DLIR Disability county and federal governments as well Compensation Division website at as information on business assistance, http://hawaii.gov/labor/dcd. counseling, workshops offered by other agencies, and alternative financing programs
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Business Action Center Office Location 1130 North Nimitz Highway King Kalakaua Building Second Level, Suite A-220 335 Merchant Street, Rm. 201 Honolulu, Hawai`i 96817 Honolulu, Hawaii 96813 Phone: (808) 586-2545 http://hawaii.gov/dcca/areas/breg/ http://hawaii.gov/dcca/areas/bac/ Open: 7:45 am - 4:30 pm Open: 7:45 am - 4:30 pm Monday thru Friday Monday thru Friday Phone: (808) 586-2744 (administration) Neighbor Islands toll free: (808) 586-2727 (documents registration) Hawai`i - 974-4000, ext.6-2545 Kauai - 274-3141, ext. 6-2545 Hawaii Business Express Maui - 984-2400, ext. 6-2545 An online registration service provided Molokai/Lanai - 1-800-468-4644, ext. 6- by the state that covers all the forms 2545 required for business registration with all the state agencies and partners. It . The following resources provide provides easy to read instructions and information and forms for starting a context sensitive help. business in the State of Hawaii. Many http://hbe.ehawaii.gov/BizEx/home.eb services are available online. Prepared by: Department of Commerce and Consumer The Agribusiness Incubator Program University of Hawai‘i Affairs Business Registration Division Mailing Address P. O. Box 40 Honolulu, Hawaii 96810
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Cash Flow Document how you generate and use cash to plan for cash shortfalls and surpluses
Overview The Cash Flow Worksheet includes various A cash flow projection enables you to sheets: anticipate how much cash is expected to . Cash Flow Detail: Details anticipated flow in and out of your business. It is a incoming cash and cash paid out to forecast of your company’s cash income and determine the monthly cash position. expenses on a periodic basis (e.g., weekly or . Crop Sheet: Details anticipated monthly). production, revenues and expenses for labor and material associated with each Why is this important? crop. Preparing a Cash Flow Statement allows you . Production Summary: Consolidates to predict cash shortfalls and financing information from all Crop Sheets. needs, and allows you to plan for investments and expenditures. Start-up costs For new businesses, cash flow If you are a new agribusiness, you should projections can give you a better idea of how include an estimate of your production and much capital investment your business idea operations-related start-up costs. Use the needs. Cash Flow Worksheet to document your production costs (including labor and Getting started material costs) in each Crop Sheet. Use the A simple spreadsheet tool can help you keep Cash Flow Detail Sheet to document your track of your cash flow. You can use the estimated operational expenses. Cash Flow Worksheet to document the income you expect to receive and the Cash in expenses you expect to pay each month. Use the Crop Sheet to enter your estimated sales figures for each month. This should Cash Flow Worksheet include all money you anticipate to receive during the month (do not include receivables). Use the Cash Flow Detail to enter any other sources of cash including include: . Loans . Revenue from services performed . Any other cash coming into the business
You should guard against being overly optimistic in projected sales and try to be as realistic as possible in putting together your Cash Flow Projection.
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Cash out Cash Flow Detail Sheet – Analyzing Cash Flow Use the Cash Flow Worksheet to enter your Deficits estimated expenses for each month. Each Crop Sheet should include the production expenses associated with each crop. Examples of crop-related expenses include: . Labor . Production Materials and Supplies
The Cash Flow Detail should include all expenses associated with operating the business. Examples of expenses include those relating to: . Land Lease or Mortgage Payment . Payroll Expenses . Employee Benefits . Insurance . Auto . Marketing . Taxes With this information, you can explore the . Utilities following options during a cash flow deficit: . Obtain financing The Cash Flow Detail will automatically . Reschedule purchases and investments capture expense information entered in each for months where you have surplus cash. Crop Sheet to reflect all expenses associated . Speed up collections on account with the business. receivables so you have enough cash during the particular month Reconciliation of cash flow . Liquidate available investments. After entering your initial cash on hand, . Cut expenses. your anticipated cash coming into, and your . Delay payment to vendors anticipated cash out, the Cash Flow Worksheet will calculate your cash position Manage Cash Flow Surplus – You will every month. know when you will have adequate cash. With this information, you can explore the Using the results following options during a cash flow After documenting this information in the surplus: Cash Flow Worksheet, you will be able to . Consider short-term investments analyze the following information: . Purchase supplies in advance at bulk rates Forecasting – You will be able to estimate your annual revenues and expenses.
Manage Cash Flow Deficits – You will know when you will run out of cash:
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Next steps and resources Agribusiness Incubator Program . Use the Cash Flow Worksheet to 3050 Maile Way, Gilmore 115 document all projected income and Honolulu, HI 96822 expense information. (808) 956-3530 . Obtain electronic copies of the Cash http://aip.hawaii.edu/ Flow Worksheet by contacting one of the following: Apply for personalized assistance from: Oahu Resource Conservation and Agribusiness Incubator Program Development 3050 Maile Way, Gilmore 115 99-193 Aiea Heights Dr. #111 Honolulu, HI 96822 Aiea, HI 96701 (808) 956-3530 (808) 483-8600 x113 http://aip.hawaii.edu/ http://www.oahurcd.org/ Prepared by: The Agribusiness Incubator Program University of Hawai‘i
22 Oahu RC&D Agribusiness Training Series
Outsourcing the Back Office Sometimes it’s better to let the professionals handle your back office functions while you focus on growing your business
Overview all received documents in a timely When you are actively involved in your manner. business operations, your focus should be on . Easy access to documents and records – growing your business. And although many outsourcing companies can critical to your business, the last thing you provide categorized online access to may want to think about is paperwork. To their records, reports and documents and eliminate burdensome requirements maintain backups of your data. associated with human resources, payroll, . Knowledge – professionals and and accounting, you might want to consider specialists tend to have wider experience hiring other companies (“outsourcing”) to and knowledge that you can take perform these important business functions. advantage of. It also gives you access to operational best practices that would be Why is this important? too difficult or time consuming to When a company grows, the “back office” develop on your own. operations (the paperwork functions) of the . Compliance – it is difficult for the small business tend to expand also. This agribusiness owner to ensure that the expansion can start to consume human and agribusiness is complying with human financial resources at the expense of core resource, financial, and tax regulations. business activities. Outsourcing some back Outsourcing companies can help. office functions will allow you to focus on those business activities that are critical to What functions can be outsourced? your success. You can outsource a single or a variety of Outsourcing can also have the following functions including the following: benefits: . Human Resource Services . Cost savings – you can eliminate Health Benefits Management overhead costs associated with your Health and Wellness Programs accounting and human resources efforts Worksite Safety Programs such as office space and utilities, high Employee Benefits Administration staff salaries and fringe benefits. Retirement Services . Minimize staff turnover and training – Employee Retention and you can reduce costs associated with Productivity staff turnover and the time required to Employee Assistance Programs manage your in-house personnel. Workers’ Compensation . Improve financial operations – good Regulatory Compliance financial information, including budgets
and analyses, provide the insight . Payroll Services management needs to control and reduce costs. Payroll Processing . Faster transaction processing times – Tax Filing outsourcing companies typically process
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. Accounting/Financial Services should understand that because workers are Accounting policies and procedures not completely under your control, conflicts Transactions processing - may involve and termination procedures AP/AR/Payroll may be outlined by the leasing company. Fixed asset accounting Order entry and invoicing Considerations when selecting an Cash receipts and disbursements outsourcer and costs Bank statement reconciliations When you hire an outsourcing company, you are choosing a partner for your business. Credit and collections Consider the following when determining Cash flow management whether or not to outsource and when Account reconciliations evaluating an outsourcing company: Variance analyses . Interview and evaluate the company just Financial statements and complete as you would a new employee. and integrated management reporting . Determine whether outsourcing with the including analytical commentaries company will save you money. If not, Budgets and forecasts decide whether the additional cost is Business planning and projections worth the added benefits and time you Financial analysis will save. Create and maintain formal financial . Determine whether the company has policies and procedures long-term relationships with businesses Tax planning and preparation by asking how many clients the outsourcer serves and the average length Employee leasing of time each business has been its client. To lower costs associated with insurance . Obtain samples of the reports you would and health benefits, you might consider a receive and be sure they meet your relationship with an employee leasing needs. company. An employee leasing company . Make sure to read the contract and will “hire” your employees and place them understand the requirements before on its payroll. In turn, the leasing company signing. Know the term of the contract “leases” these employees back to you. and whether you can terminate the For many employees, the switch is contract if you are not happy with the financially beneficial. Since a typical service. leasing company handles a large volume of . Make sure you understand the cost employees from multiple companies, health structure. insurance and other benefits can be . Make sure that you agree with the negotiated in bulk. Your worker can have performance deliverables of the the same level of benefits as a worker in a company (for example, will reports be much larger company. delivered in a time frame that is Because workers are not considered acceptable to you). employees of your company, personal . Ensure that the company has adequate injuries and workers’ compensation claims resources to handle your business. become the responsibility of the leasing . Ensure that the company will be company. In many cases, however, wages responsible for keeping up with and and performance reviews might be implementing new regulatory controlled by the leasing company. You
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requirements (human resources) and . Ceridian – provides payroll and human industry best practices (financial). resource services. . Determine the type of technology and 1-800-643-5999 equipment you will need and consider www.ceridian.com the costs. . Make sure that the service is providing . Kama‘aina Bookkeeping Services – adequate security and confidentiality. provides payroll and financial services. . Have the company demonstrate the 808-638-5938 product before you make a commitment. www.kamaainabookkeeping.com . Ask for referrals and talk to others who have used the service. . KilaKila Employer Services – provides payroll and human resource services. Outsourcing costs vary depending on the 808-597-8535 volume and complexity of work and can www.kilakila.com either be charged as a flat monthly fee or . Montpac Outsourcing – provides billed at an hourly rate. accounting and financial management Leasing companies charge a fee in services. addition to the employees’ wages. This fee 808-923-3300 is often less than the cost of hiring human www.montpac.com resource and payroll staff. . Proservice Hawaii – provides payroll Next steps and resources and human resource services. Determine whether you can benefit from 1-877-592-4900 outsourcing services by comparing cost and www.proservicepeo.com benefits of Professional Employer Organization (PEO) services. The following You may find other companies by searching represent a few companies with a local in the phone book or online for the type of presence: service(s) you are looking for.
. ALTRES HR – provides payroll and Prepared by: human resource services. The Agribusiness Incubator Program University of Hawai‘i 808-951-4900 www.altreshr.com
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Basic Management via Financial Statements Standard reports and ratios used to manage your business
Overview those items that normally do not wear out or Financial Statements provide an overview of are not intended for sale within the next ten a business’ financial condition in both the years. near- and long-term. The first step is to collect the information needed to prepare Liabilities – Debts owned by a business. your Balance Sheet, Income Statement, and Liabilities are listed on the Balance Sheet in Cash Flow Budget. Financial analyses are the order in which they come due. performed on these statements to provide Current liabilities, listed first, will be due you a more detailed analysis of your during the upcoming year. Intermediate operations. liabilities, come second and are debt obligations due within two to ten years. Why is this important? Finally, long-term or fixed liabilities are Financial Statements provide information those debts due in more than ten years. about the financial position, performance and changes in the financial position of your Net Worth or Owner’s Equity – The current company to help you make important value of the owner’s investment in the business decisions. Using ratio analysis, business. This figure will include these Financial Statements can help you investments by the owner in the business determine the financial health of your and profits that have been retained in the business. business rather than withdrawn by the owner. Balance sheet A Balance Sheet shows your financial Income statement position at a specific point in time and Income Statement summarizes the revenues reflects the following basic relationship: and expenses of your business during a specific period of time, generally a year. Assets = Liabilities + Net Worth (Owner Equity) Many businesses use the profit-and-loss statement from their income tax form as Assets – Resources or items of monetary their Income Statement. value that are controlled by the business. Assets are listed in order of their liquidity, Cash flow budget i.e., when they will be used up. A Cash Flow Budget estimates all of the Current assets, listed first, will be cash coming into and going out of your converted to cash or consumed during the business over the year. To make these upcoming year. Intermediate assets come forecasts, you must anticipate all of the second and provide services to the business following cash flows every month. over time, but they are used up (depreciated) or sold (liquidated) within two to ten years. Long-term or fixed assets are last and are
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Cash In: Income Statement to compute ratios that + cash sales describe your financial position. + payment for credit sales Four financial goals are important to + new loans your business. Ratios can be used to + owner’s investment determine where your business stands in + asset sales each of these areas.
Cash out: Liquidity: The ability of a business to pay - operating expenses bills and debts as they become due over the - interest and tax payments next year. - loan payments The most widely used Liquidity - owner’s withdrawal indicators are the Cash Flow Budget and the - asset purchases Current Ratio. Because the Cash Flow Budget is prepared a year in advance, it can After the cash flow budget is completed, the help you anticipate any cash shortage that budget can be used to project your Balance you need to be prepared to address. Sheet and Income Statement in the future. You might want to anticipate what you will Current Ratio = Current Assets/Current Liabilities do if sales are not as strong as expected or if an un-planned expense occurs, so that you A low Current Ratio, say 1:1, means that are prepared for cash flow problems that your business is barely liquid and you may might arise. not be able to pay your debts when they become due this year. A high Current Ratio, Financial analysis say 3:1, means that your business is very There are two types of Financial Analysis liquid. This may limit your business’ commonly used by a financial analyst. profitability because current assets generally These are Break-even Analysis and Ratio earn less than intermediate and long-term Analysis. assets.
Break-even Analysis – Break-even Analysis Solvency: The ability of a business to pay off estimates the minimum number of units that all debts over the life of the business. a company must sell, or the minimum The most common Solvency measure is selling price that the company must receive, the Leverage Ratio: in order to pay all of its expenses. To calculate the minimum selling price or Leverage Ratio = Total Liabilities/Net Worth minimum number of units, see the lesson on cost of production in this Guidebook. If your Leverage Ratio is large, say 2:1, your Knowing the number of units that you must business has a large amount of debt and sell to pay your expenses, or your minimum could go bankrupt quickly. On the other sales price, is useful because it is a goal that hand, a small Leverage Ratio, ~1:5, means you can shoot for. Other financial goals are that your risk of bankruptcy is much smaller, also important, and Ratio Analysis allows but your opportunities to grow and make you to look at them. profits are reduced.
Ratio Analysis – Ratio Analysis uses Profitability: The ability of the business to information from your Balance Sheet and earn profits.
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Two common measures of Profitability know that your business is operating less are Return on Assets (ROA) and Return on efficiently. Equity (ROE). In calculating ROA and ROE, the figure subtracted for unpaid labor Things to remember when using ratio will depend on how much you think this analysis labor is worth. Generally, you should think . Examine the ratios computed from data in terms of how much it would cost to hire contained in your company’s Financial someone to do the work that you or a family Statements to determine whether this member currently does. value is consistent with your goals. For example, if you want to pursue a goal of Return on Assets = high profitability, you may want to be Net income+Interest paid-Total unpaid labor sure that your current ratio is not high. Total Assets . Compare your business with similar
businesses in the industry. Get ROA indicates the before-tax rate of return information at the library, from trade earned by the assets of the business. The magazines or associations, or from interest paid on debts is added back in lenders. before ROA is calculated. The ROA of a . Do not use only one ratio for decision business must be greater than the interest making. Moving toward one goal may rate on borrowing or the assets are not result in movement away from another. earning enough to pay for themselves. For example, a movement toward
Return on Equity = profitability might lead away from high Net income - Total unpaid labor liquidity. Total net worth Next steps and resources Remember that the ROE tells you how much . Analyze your ratios over time and make your business is earning on the money you decisions based on trends rather than on have invested in it. Looking at the returns one year’s performance. Make a chart to you could get from other investments will see how things change over time. Be help you decide whether your ROE is sure that you have your business’ acceptable. financial data at your fingertips and check it often. You can congratulate Financial Efficiency: The value of inputs as yourself on things that went according to compared to the value of output they plan and correct problems before they produced. get out of hand. You might also want to reassess your goals periodically if your Operating expenses ratio = business goals have changed over time. Total expenses - Interest paid - Depreciation Sales . Additional information can be found on
the CTAHR publications website at Various efficiency ratios calculated with http://www.ctahr.hawaii.edu/ctahr2001/ data from your Income Statement determine PIO/FreePubs/FreePubs02.asp. how much of each sales dollar is paid out for expenses or remains as profit. If large expenses such as labor go up without sales increasing at the same time, then you will
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. The information in this lesson was taken largely from the book, “This Hawaii Product Went to Market” in the “Managing Your Finances” section authored by Linda J. Cox.
Prepared by: The Agribusiness Incubator Program University of Hawai‘i
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30 Oahu RC&D Agribusiness Training Series
Marketing
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Target Markets Increase your sales by knowing who you’re selling to
Overview They would appreciate the value of what A Target Market is a defined group of you offer and be willing to pay more for it. potential customers that is the focus (target) Give this person a descriptive name that of your sales/marketing efforts. The more identifies them as narrowly as possible. you know about this group, the better you Bad Example: Tomato eater. are able to reach them and address their Better Example: Mother of school aged needs, thus increasing your sales. children who really wants her family to In this lesson we will discuss a simple eat local, fresh, healthy vegetables, and way of defining and getting to know your for which tomatoes is a prime example. target market(s). This is a fundamental step in developing your Marketing Plan. Defining the target market and research Think about the characteristics that Why is this important? differentiate this person/business from the Many small agribusiness owners don’t want general population. Imagine their to limit their opportunities by focusing their stereotypical characteristics in as much sales and marketing efforts on a particular detail as possible. You can use the research category of customers. However, sources at the end of this lesson to experience has shown that trying to please substantiate or complement your (market to) everyone leaves you to compete assumptions. Surveying people in your on price, which, often, is not what leads to target market can also provide valuable success. insight. By focusing your efforts on a target Describe your target market using as market (niche marketing), you can become a many of (although not limited to) the leader in you niche and benefit from greater following characteristics: loyalty and higher pricing. You can reach a target market much more efficiently and Consumers effectively than the market of “everyone.” Age (range) Incidentally, if you sell to wholesalers, Geography (where are they while they might be your direct customers, concentrated? In Kahala? Waianae?) they are NOT your target market. You Sex (male/female) should consider them in a marketing plan, of Family size (single, married, kids?) course, but for now, focus on the consumer Household income (range) or business that makes the buying decision. Education level
Ethnicity What is MY target market? Related values (do they value The easiest way to select your target convenience, aesthetics, taste, etc.?) market(s) is to think about your ideal Buying style (buy small quantities at customer. Imagine the person (or business) that a time? Buy during the holidays?) would most prefer your products and Self concept (I’m a mother, I’m a services versus the competitors’ offerings. rebel, I’m sophisticated, etc.)
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Businesses (if a business is the end user Once you have identified, described/ of your product) researched, and validated your target Geography market, then you have the foundation upon Industry/SIC or NAICS code which to start developing the rest of your Annual revenue (range) marketing plan. Can you already see how Number of employees (range) knowing your target customer might impact Buying style and decision making such decisions as where to sell, what to say to them, and how you might modify your Example: Female homeowners age 30- product or packaging to appeal more to 55 with children, living on the North them? Shore of O‘ahu, with household incomes of >$50k, who place a premium on Next steps and resources freshness and health aspects of food they . Continue to the Positioning and purchase. Branding course offered through: Oahu Resource Conservation and You can then research the population fitting Development some of these characteristics to determine 99-193 Aiea Heights Dr. #111 how many people/businesses (potential Aiea, HI 96701 customers) there are in your target market. (808) 483-8600 x113 Also estimate how much of your http://www.oahurcd.org/ product/service a customer from this target market might purchase in a month or year. . Apply for personalized assistance from: To validate that this is a suitable target Agribusiness Incubator Program market for your business, ask yourself the 3050 Maile Way, Gilmore 115 following questions: Honolulu, HI 96822 . Does my target market have a need or a (808) 956-3530 problem that I can satisfy, and are others http://aip.hawaii.edu/ not satisfying their needs sufficiently? If their needs are already being satisfied Additional information on target markets: then this is not a niche market for me — . www.entrepreneur- I will have direct competition for this web.com/articles/targetmarket target market for my products/services. . www.morebusiness.com/running_your_ . Can I easily identify my target market business/marketing/Target-Market.brc (so that I can reach them in trying to . www.soho.org/Marketing_Articles/targe communicate/sell to them)? t_marketing_strategy.htm . Are they able to afford what I’m selling? . Is the size of the target market big enough to support my desired sales?
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Some free internet sources of research: . Geographic information: . General information: www.Google.com www.zipskinny.com . Various Hawaii statistics . Industry classifications: www.naics.com hawaii.gov/dbedt/info/economic/databoo . Consumer spending: k/ www.bls.gov/bls/demographics.htm . Hawaii tourist information: . Business spending: www.hvcb.org/trends/index.htm www.census.gov/epcd/www/bes2002.ht . Population information: m factfinder.census.gov/home/saff/main.ht ml?_lang=en Prepared by: and quickfacts.census.gov/qfd/ The Agribusiness Incubator Program University of Hawai‘i
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Positioning and Branding Differentiate yourself and get more control of pricing and demand
Overview your company, then you can communicate This lesson attempts to simplify a complex and perform in ways that will foster that topic so that it can be put into action, and perception. This is how your target market thereby benefit the small agribusiness. develops preference and loyalty for your Positioning relates to a strategic decision brand and will be willing to pay a premium on how you want your products or services for what you offer. By having a brand to be perceived by customers, relative to desired by a target/niche market, you will competitive companies/products/services. In have greater control over demand and Positioning you typically want to pricing, instead of being totally reliant on differentiate yourself from your competition. what the wholesaler is willing to buy and Branding, for the purposes of this lesson, pay. refers to the tactics used to influence your brand – your brand being how customers Creating your positioning statement perceive your company/products/services. Develop a concise statement that describes We can only influence, not control, the the one or two things you want your customers’ perceptions. However, by potential customers to associate with your determining our desired Positioning and company. Remember that you want to be then taking appropriate actions to develop attractive to your target market and different our Brand, we have a much better chance of from your competition. An example of this fostering the identity that leads to increased process is shown on the following page. profitability. As we assume that you have not done 1. Research your competition. What are much yet in this area, we will focus on they known for? List the competitor and Positioning and Branding your company the positioning. instead of your products/services. 2. List the defining characteristics of your company, focusing on things that you Why is this important? think are unique, special, and attractive Many small agribusinesses in Hawaii not to your target market. only sell undifferentiated products (your 3. Highlight the characteristics/reasons lettuce might be indistinguishable from why your target market might choose another farmer’s lettuce), but also make you over your competition. If you little or no effort to identify their company already have preferred customers, be on their products. A brand is more than a sure to ask them why they do business name and a nice logo. Without giving with you instead of the competition. customers a way to identify where your 4. Write a concise Positioning Statement lettuce came from, how can they buy it with your competition and the target again even if they wanted to? market in mind. If you know how you want customers (and potential customers) to think about
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Example of Positioning Statement Development
Now review: Branding elements . Does it fit your personality? Not Now that you’ve determined your everyone can pull-off being the “Avant- positioning, reinforce this every chance you garde plant nursery for the get with your branding elements. Make sure discriminating landscape artiste.” your packaging, letterhead, business cards, . Does it violate customers’ perception of etc. convey your branding consistently and reality? If you claim to produce the pervasively. If you sell products that don’t world’s favorite caviar right here in lend themselves to labels (like taro), Hawaii, might that be hard to accept? consider branded twist ties, rubber bands, You can shift perceptions by “walking cellophane packaging, and hang tags. the talk” but it’s harder work. . Does it make you unique from your 1. Write down what you will do with the competition or the best? Keep in mind following branding elements to support that you don’t actually have to be your positioning: unique, just unique in the mind of the Brand Name/Company Name (e.g., customer. Therefore, if no one else is Healthy Hawaiian Plants) known for being the nursery with the Tagline/Slogan (often simply a healthiest plants, feel free to make that rephrasing of you positioning your positioning (assuming you actually statement, e.g., Native Hawaiian have healthy plants). plants that thrive in your garden) Tip: Quality, flexibility, and personal Logo (e.g., a stylized iconic service are very common claims for Hawaiian quilt plant silhouette) small businesses. Color Scheme (e.g., green and purple) Remember that “sacrifice is the essence of Spokesperson/Character/Voice positioning.” Ries, Al and Trout, Jack. 1981. (often optional, but defining a Voice Positioning: The Battle for Your Mind. New York: is useful even in written advertising, McGraw-Hill. You aren’t trying to appeal to e.g., the Voice will be one of an everyone. This is the essence of niche older, experienced landscaper who is marketing. Once you own/dominate the passionate about using plants that niche, you can expand into other markets.
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will thrive once planted and knows Additional information on positioning and that natives are perfect but healthy creating a Positioning Statement can be plant material isn’t a given) found at: Font/Typeface (e.g., a Hawaiian- . www.entrepreneur.com/advertising/howt looking font) oguides/article171496.html Packaging/Labeling (e.g., Use brand . www.bizboom.com/tools/files/positionin name, slogan, website, logo, color g_statement.rtf scheme, and font. Use Hawaiian and . www.marketingprofs.com/Faqs/showfaq common plant name. Where space .asp?ID=160&CatID=9 allows, describe native climate and . marketing.about.com/cs/advertising/ht/w environment where it thrives and riteposition.htm give example Hawaiian place name, . biznik.com/forums/community-wide- and add “Lovingly grown by” with general-discussion/topics/whats-your- employees name after that. positioning-statement 2. Create these elements and use them consistently and pervasively. Create a logo: 3. Convey your positioning in your . www.logoworks.com advertising, how you deal with . http://www.logomojo.com customers, in your product line, etc. See also the Marketing Mix lesson. Design a product label and/or packaging: . Dana Labels Next steps and resources 1920 Colburn St. . Continue to the Marketing Mix lesson. Honolulu, HI 96819 . Apply for personalized assistance from: (808) 845-3262 Agribusiness Incubator Program http://www.danalabels.com 3050 Maile Way, Gilmore 115 http://www.iprint.com Honolulu, HI 96822 http://www.xocreate.com (808) 956-3530 http://aip.hawaii.edu Prepared by: The Agribusiness Incubator Program University of Hawai‘i Small Business Development Center 1833 Kalakaua, Suite 400 Honolulu, HI 96815 (808) 523-6118 http://www.hawaii-sbdc.org
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The Marketing Mix Attracting your target market through an integrated effort
Overview Objective This lesson assumes that you have Although not part of the Marketing Mix, it is completed of the Target Market and very useful to define an objective of your Positioning/Branding topics. In this lesson, near-term marketing efforts. Is it to we look at using the findings from the establish awareness of your brand? Launch a aforementioned lessons to consider changes new product? Sell your product in a new to your products/services, your place of area or to a different type of customer? business/distribution, your pricing, and your Simply increase sales? promotions/advertising in By knowing what the order to convey your Marketing Mix objective is, you can better Positioning/Branding to focus your efforts on your Target Market. achieving them. For We adjust our example, if you want to Marketing Mix (Product, launch a new and unique Pricing, Place, Promotion) product, you might decide to to appeal to our target emphasize demonstrations market in ways that are and sampling (promotion) consistent with our and offer introductory positioning and branding. pricing or offer it to stores Many people think of on consignment (pricing). marketing as being Think about what you synonymous with want your marketing efforts advertising. It is not. to achieve over the next year Marketing is everything and write down your you do to purposefully encourage people to marketing objective. conduct business with you, as will become clear when you do the exercises in this The marketing mix lesson. Given what you know about your target market and positioning and branding, what Why is this important? might you change in each of the following Once you know your target market and have areas (products, price, place, promotion) to defined how you want them to think of your better appeal to them and reinforce/convey company/products/services, you can your positioning/branding? encourage them to prefer your An example: Your target market is company/products/services over the health-conscious, Honolulu-based young competition, thus increasing your sales and adults without or with young children, and giving you more control over demand and your desired positioning is “The most pricing. nutritious vegetables, grown right here in By aligning your Marketing Mix, you Hawaii.” A few appropriate things you better ensure that your marketing is might do with your Marketing Mix are: integrated, cohesive, and effective.
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Product . Get food providers at events in Honolulu . Bag your product in clear bags to that attract healthy young adults to use accommodate a label, which includes your products (perhaps donated) with your company name, logo, and website, mention of your company and slogan emphasize Hawaii-grown, and show a somewhere (menu, program, table cards comparative analysis of the nutrient where food is served). content of your product versus a mainland competitor. From the above example, can you see how . Label space permitting, explain the knowing the target market and positioning environmental benefit of being grown led to these decisions about Marketing Mix? here (significant portion of your target market is also concerned about the Here is a simple process to create and environment). benefit from a Marketing Mix of your own: . Package each bag to include around two 1. Brainstorm and write down all the single servings. changes you could make for each element of the Marketing Mix that Price would appeal to your target market . Premium versus imports. On a per pound and/or promote your positioning. basis, slight premium pricing over Examples are listed, but don’t feel imports (target is typically not a “value” limited to the examples. Getting ideas buyer, small quantity bag should make from people in your target market is premium pricing less of an issue, and especially useful. can enhance perception of a premium 2. Select the ideas/changes that you are product). willing to implement now, considering cost, effort, impact (appeal to your target Place market), and consistency with your . Sell and deliver to specialty grocers (and positioning. supermarkets if volume permits) in 3. Schedule when you will implement or Honolulu, focusing on areas start implementing each idea and of high concentrations of determine a budget. your target market. 4. Implement the ideas! . Sell over the Internet for on- Remember, you don’t have farm pickup. to be a creative marketing genius! There is incredible Promotion value in thinking through . Shelf tag with your brand, what you can do to appeal to slogan, logo and expanded your target market and what descriptions of nutritional you can do to foster customer (and possibly perception about your environmental) benefits of company and brand your products. (positioning). You will . Web site with a blog probably find that having about what you’re doing gone through this exercise, to maximize the nutrient you will become more aware content of your products. of marketing impacts and opportunities.
39 Oahu RC&D Agribusiness Training Series
The greatest value, of course, comes in . Premium (used to support perception of taking action to implement these ideas. a premium product) Treat Marketing as a business function . Penetration (temporarily lower to gain instead of merely an occasional thought and market share/shelf space) effort. Doing so will give you a great . Economy (lower pricing to appeal to competitive advantage! price-conscious target market) . Volume (discounts for purchasing larger Product (or Service) quantities) What can you do with what you offer that is . Bundle discounts (discounts for buying appealing to your target market and supports additional different items from your your positioning? Some examples to product line; good for encouraging sales consider are: volume and encouraging trial of . Product size (snack size, party size, new/less popular item when bundled Costco size, single serving) with more popular item) . Bundling (small packet of chili sauce . Psychological ($1.95 can “feel” and a recipe with the long beans) significantly less than $2.00) . Packaging material (extra protection . Product line (multiple versions at from bruising, biodegradable, glass different price points; e.g., instead of plastic jar) small/med/large) . Label (company name on the twist-tie, . Options (base product/service at a recipe attached to rubber band; see palatable price, add-on options offered) especially your Branding Elements from the Positioning lesson) Place (Distribution) . Warranty (money back guarantee, 30 The way in which you get your product to minute delivery guarantee) market and where the product is offered . Quality (vine ripened, stricter quality (including your own retail location) can be a control, more cleaning) marketing tool. The different options will . Features/Varieties (stem attached, differ in their cost, transportation time, hot/medium/mild versions) geographic reach, quality and presentation of your delivered product, and services Price provided. As always, your target market, Hopefully, you are not pricing simply based marketing objective, and positioning should on what your competition charges, or worse, guide your decisions — where they shop, what the wholesaler wants to pay. how they like to buy, etc. Differentiate yourself through focus on Keep in mind that, while wide target markets, positioning/branding, and distribution tends to increase sales volume, effective use of the Marketing Mix. it often can mean higher costs and effort, You should know what it really costs and lower margins. Some examples of you to offer your goods or services. See the choices to consider are: Cost of Production lesson in this . Intensive (offer the product in as many Guidebook. locations as possible for geographic Pricing can be a marketing tool. What reach and customer convenience) can you do with what you charge that is . Exclusive (sell in one or very few appropriate for your target market, locations to support a perception of positioning, and marketing objectives? “specialness” and a higher price) Some examples to consider are:
40 Oahu RC&D Agribusiness Training Series
. Selective (sell in specific types of stores . Sales promotions (coupons, retailer and/or locations for geographic reach discount for first purchase, in store with a manageable number of locations) demos, point of purchase displays, . Indirect (leverage the geographic reach, rebates, contests) infrastructure, experience, and services . Public relations (press releases and of wholesalers and retailers) public events) . Direct (typically gain higher margins . Guerrilla/Other (blogs, gifts, giveaways, and more customer contact versus contests, frequent/new buyer programs, Indirect, but requires more effort and exclusive offerings, events, cross cost; Direct includes mail order, on- promotions, referrals and word of farm, Internet, mail order, farmers’ mouth) market, CSAs) . Shipping (flat rate or reflective of the Next steps and resources individual order shipping cost?) Other marketing topics mentioned in this . Services (who will handle: warehousing, lesson are available from: order processing, inventory Oahu Resource Conservation and management, packaging, materials Development handling, receiving, transportation and 99-193 Aiea Heights Dr. #111 shipping, returns/warranty, Aiea, HI 96701 sales/promotions?) (808) 483-8600 x113 http://www.oahurcd.org/ Promotion Promotion consists of activities you may Apply for personalized assistance from: have typically considered “marketing,” Agribusiness Incubator Program including the following examples. 3050 Maile Way, Gilmore 115 Determine which promotional activities will Honolulu, HI 96822 reach your target market, encourage them to (808) 956-3530 buy, and be cost-effective. http://aip.hawaii.edu . Advertising (yellow pages, newspaper, magazines, radio, television, Email, web Small Business Development Corp. banners/links/etc.) www.hawaii-sbdc.org . Trade shows (food manufacturing, restaurant industry, consumer shows; useful for networking also) . Sponsorships (sports teams, events) . Direct mail (allows for good targeting) . Personal selling (salesperson calling on stores)
41 Oahu RC&D Agribusiness Training Series
Additional information: . Statistics-Production, Marketings, and . Marketing mix Wholesale Prices www.learnmarketing.net/marketingmix. http://www.hawaiiag.org/prices.htm htm www.hawaiiag.org/prices.htm www.marketingteacher.com/Lessons/les . USDA State Marketing Profiles son_marketing_mix.htm www.ams.usda.gov/statesummaries . Trade shows www.tsnn.com . Small Business Development Corp . Direct marketing www.the-dma.org tutorials www.sbdcnet.org . Choosing an appropriate location for business Prepared by: www.nolo.com/article.cfm/objectID/3A The Agribusiness Incubator Program University of Hawai‘i FBBD6F-1BDF-403A- A78ABD2109684A46/111/228/142/AR T
42 Oahu RC&D Agribusiness Training Series
Regulations
43 Oahu RC&D Agribusiness Training Series
Permitting, Licensing, Certifications and Zoning Requirements Avoid penalties and business disruptions through proper compliance and make your company more marketable through optional certifications
Overview Zoning laws Whether you’re involved in the excitement All land in Hawaii is classified into one of of starting a new business or busy with the four categories: Conservation, Agricultural, day-to-day demands of running your Rural, or Urban. These designations were existing operations, it’s easy to ignore the initially established by the State Land Use need for licenses and permits. While Commission (LUC). Changes to the obtaining the appropriate licenses and designations can be made by ordinance of permits and ensuring that you are operating the County Council for areas of 15 acres or in accordance with zoning laws and less; otherwise, the LUC must approve regulations may seem like a grueling task, changes. Only the LUC can take land out of failing to do so is one of the most common the conservation district. Typically, mistakes business owners make and it could amendments to land designations are expose you to unnecessary business risk. initiated by landowner applications and This lesson provides high level information reviewed on a case-by-case basis. on Hawaii’s zoning laws and on some of the Zoning is the primary means for common licenses and permits you need to be controlling land use. All areas on the island, aware of. In addition, it will direct you to except for federal lands like the national places where you can find additional parks, and some areas in the conservation information and to resources that can help district, are zoned. The Zoning Code lists you meet these legal requirements. the permitted uses within each zone, and also the required setbacks, height limits, Who is this for and why is this parking areas for commercial developments, important? and other controls. Everyone starting or running a business Zoning changes are reviewed by the should take the time to ensure they have the Planning Commission, but must be finally proper licenses and permits to operate their approved by the County Council through business and that their property is ordinance. appropriately zoned for the type of business It is important that you verify that your they are in. These regulations are enforced property is in the appropriate zone for your and monitored by state and local (city and particular type of business and that any county) governments. Verifying this structures, parking areas, etc. are allowed information early can help you avoid fines, under the zoning code, as violations to penalties, or interruptions in business that zoning laws can be severe and costly. The could occur as you try to clear-up issues that City and County of Honolulu’s Department may arise later. Additionally, some licenses of Planning and Permitting offers advice on and certifications can give you a marketing how to verify that a specific kind of advantage by distinguishing your goods or structure, activity or use of land is allowed services from your competitors’. on the website:
44 Oahu RC&D Agribusiness Training Series http://www.honoluludpp.org/PermitInfo/ purchased directly from a farmer or http://honoluludpp.org/downloadpdf/zoning/ producer. lupdfaqs.pdf There may also be certain licenses or Actions that require permits/licenses certifications related to your business that Operating a business usually requires that are not required but you may want to obtain you register in the state that you plan to do to distinguish yourself from your business in and with the Federal government competition. An example is the food safety (this is discussed in more detail in the certification, which is discussed in greater Business Structure and Registration lesson detail in the Food Safety Certification lesson of this Guidebook). Once you have started of this Guidebook or the HDOA Seal of your business, you may find that additional Quality (SOQ), which was launched to permits or licenses might be needed. A distinguish Hawaii grown or made products. typical example is a building permit, which is required to erect, construct, alter, remove Considerations and processes to obtain or demolish any building or structure. You permits/licenses are even required to obtain a sign permit if State and county agencies increasingly have you want to install, construct, alter, relocate, turned to the Internet to provide many of or reconstruct any sign or a temporary their services online. If Internet access is permit if you want to set-up a tent or similar not readily available to you, addresses and structure for commercial purposes. phone numbers of the appropriate agencies In addition to the situations described have been included at the end of this above, there may be several licenses needed document. to obtain to operate an agricultural business. . The City and County of Honolulu What follows are typical examples of some Department of Planning and Permitting of the common licenses/certifications you has developed an online Honolulu will be expected to obtain as an agricultural Internet Permit System site to assist in grower/producer: the building permit application process: . Pesticide Applicator Certification – You http://dppweb.honolulu.gov/dppweb/ must be certified to use certain types of . Pesticide Applicator Certification –To pesticides on your farm. The Hawaii become certified, you must pass a Department of Agriculture (HDOA), written examination(s). Certifications are Pesticides Branch regulates the good for five years from date of issue. manufacture, sale, and use of pesticides To arrange for testing, contact the in the State of Hawaii. There are two HDOA’s Pesticides Branch. Application types of certified applicators: Private forms can be obtained online at Applicators and Commercial http://hawaii.gov/hdoa/pi/pest . For Applicators. Private Applicators are study material for the examination and those who are involved in agricultural for information on preparatory classes, production (farming) on land operated contact the University of Hawai‘i, by themselves or their employer. Cooperative Extension Service at (808) Commercial Applicators make up the 956-6007. rest. . The State of Hawaii Department of . Dealer’s License – This is required when Agriculture Commodities Branch is selling or handling Hawaii grown designed to assist in the development of agricultural products obtained or agricultural industries through quality
45 Oahu RC&D Agribusiness Training Series
assurance of agricultural commodities Honolulu Land Information System: and licensing of dealers in agricultural http://honoluludpp.org/gis/ products. Application forms for many of the certifications/licenses discussed Building Permit Informational Brochure: above (e.g., Dealer’s License, Food http://honoluludpp.org/downloadpdf/CO Safety Certification information) and NSTRUCTION/bpinfo.pdf additional information on issues that have not discussed here (e.g., seed . HDOA Seal of Quality Program: certification and grading standards), can http://hawaii.gov/hdoa/add/soq be found online on their website. . HDOA Seal of Quality Program – To Hawaii Department of Agriculture meet program standards, all fresh Agricultural Development Division agricultural products must be produced Market Development Branch entirely in Hawaii and meet the highest 1428 South King Street quality standard. Value-added processed Honolulu, HI, 96814-2512 agricultural and food products, for which Ph: (808) 973-9595 the primary agricultural product has Fax: (808) 973-9590 been produced entirely in Hawaii, must http://hawaii.gov/hdoa/add/md also meet the 51% wholesale value- E-mail: [email protected] added requirement and be in compliance with all state laws. Applications and . The State of Hawaii Dept. of Agriculture regulations can be found online at: Commodities Branch: http://hawaii.gov/hdoa/add/soq/SOQPgr http://hawaii.gov/hdoa/qad/comm mHist Commodities Branch Next steps and resources Hawaii Department of Agriculture . State of Hawaii Department of Quality Assurance Division Agriculture forms can be located at: 1851 Auiki Street http://www.hawaiiag.org/hdoa/forms.ht Honolulu, HI 96819-3100 m Ph: (808) 832-0700 Fax: (808) 832-0683 . City and County of Honolulu http://hawaii.gov/hdoa/qad Department of Planning and Permitting: http://www.honoluludpp.org/ . State of Hawaii Land Use Commission: http://luc.state.hi.us/ Frank F. Fasi Municipal Building Department of Planning and Permitting . Online access to Land Use Maps: 650 So. King St http://luc.state.hi.us/luc_maps.htm Honolulu, HI 96813 Ph: (808) 768-8127 (Customer Service) Prepared by: Fax: (808) 527-6743 The Agribusiness Incubator Program University of Hawai‘i E-mail: [email protected]
Honolulu Internet Permit System http://dppweb.honolulu.gov/dppweb/
46 Oahu RC&D Agribusiness Training Series
Conservation Planning Protect your farm while protecting the environment
Overview . Identify immediate or potential resource Conservation Planning refers to the problems that could hurt your management of the natural resources on production. your land. A Conservation Plan (CP) is a . Comply with environmental regulations. formal document that outlines your . Prepare for agricultural or market conservation practices such as crop rotation, certifications. nutrient management, soil erosion . Address regulatory requirements. mitigation, etc. A CP also documents . Qualify for various USDA conservation details about your farm and typically programs. includes land-use maps, soil information, . Develop alternatives and identify inventory of resources, etc. Developing a strategies for implementing on-farm CP is voluntary, but proper conservation solutions. planning can result in more workable and . Establish a reasonable schedule to apply productive land, which should allow you to needed conservation practices. increase your production and lead to greater . Save time, labor and energy. income. Choosing to develop a CP may sound overwhelming at first, but resources Considerations/Areas of impact are available to assist you in this effort. How will conservation planning help you achieve your production goals and improve Why is this important? your bottom line? Have you ever It’s up to you to decide on the best ways to considered any of the following issues? improve the productivity, sustainability, and . Would you like the opportunity to profitability of your operation. Conservation enhance the natural resources on your planning is an important starting point for land? maintaining and improving the natural . Do you have muddy runoff, carrying resources that support productive and precious nutrients and water away? profitable agricultural operations. . Is sediment accumulating in the lower Every farm has its own unique resource part of your land or field? assets, problems or concerns. At your . Are your fields less productive now than request, certified conservation planners in they once were? the Natural Resources Conservation Service . Is your property providing wildlife (NRCS) and local conservation districts can habitat? provide planning assistance to help . Do you need more and more fertilizer producers identify options that provide the and water to sustain yields? greatest conservation benefit while meeting . Are there invasive species where once production goals. native species and productive Working with a conservation planner, pastureland thrived? you can develop a conservation plan that can . Do you need to comply with certain be used to: regulations?
47 Oahu RC&D Agribusiness Training Series
If any of these questions or others like them have come up, it may be time for you to Nutrient Management – The development of consider developing a CP for your farm. a nutrient management plan helps reduce fertilizer costs by ensuring that nutrients are Obtaining a conservation plan applied at the proper time and protects water When you are ready to start your CP, a quality. The plan might also identify areas NRCS planner can meet with you to discuss of concern such as flood plains and steep your goals, plans, resource problems, soils, slopes. and NRCS’s conservation programs. The planner will ask which crops you want to Pest Management – Using a pest grow, the livestock you want to keep, the management strategy that identifies specific wildlife or recreation uses you want to plan, treatments for specific pests saves money by and any other interests you have that will ensuring that the treatment is applied only affect the land. The planner will help you when needed, which prevents over treatment consider the effects a planned practice might and protects water quality. have on a neighboring farm or parcel of land. When developing your plan it is Wind Break – Utilizing rows of trees and important to think on-site as well as off-site. shrubs that protect areas from wind reduces Technically trained NRCS planners will wind erosion or wind damage to crops, help you reach informed decisions about serves as a sound barrier and protects your soil, water, air, plants, and animal resources crops from potential chemical drift from while considering human, social and neighboring farms. economic concerns. The preceding is merely a snapshot of some Potential remedies of the many conservation practices you can There are several common conservation implement on your farm. You should keep practices that you may implement depending in mind that some of the most profitable on what issues you are facing. Following practices, like nutrient or pest management, are a few brief descriptions of conservation require little or no financial investment, can practices. They explain how the practices reduce expenses and may go the farthest work and how they help improve a farm. toward protecting water quality. Other Additional details such as things to think practices might not immediately increase about when considering the practice and farm income, but can pay off in other ways basic maintenance needs can be found in the through cleaner water, more wildlife, long- resources listed at the end of this lesson. term soil conservation, and an improved quality of life. Crop Rotation – Changing the crops grown in a field, usually in a planned sequence can Next steps and resources help reduce soil erosion and provide savings . Contact the Hawaii Natural Resources in fertilizer costs and pest control. Conservation Services offices nearest to your area of concern: Contour Buffer Strips – Using strips of grass or other permanent vegetation can help trap sediment or nutrients, control runoff flow and even provide a habitat for birds or animals.
48 Oahu RC&D Agribusiness Training Series
Hilo (Hawaii) Molokai Harry Toki Wallace Jennings 154 Waianuenue Avenue, Room 322 4101 Maunaloa Highway Hilo, Hawaii 96720-2452 P.O. Box 396 (808) 933-8381 Hoolehua, Hawaii 96729-0396 [email protected] (808) 567-6868 [email protected] Kona (Hawaii) Jeff Knowles . An additional source of assistance is the Central Kona Center (Building 9) Hawaii Association of Conservation 81-948 Waena’Oihana Loop, Suite Districts (HACD). The HACD 101 encompasses 16 Soil and Water Kealakekua, Hawaii 96750 Conservation Districts (SWCD) (808) 322-2484 throughout the State of Hawaii. Since its [email protected] inception in 1954, HACD has worked to coordinate and facilitate local partners Waimea (Hawaii) and governmental agencies in Matthew Wung identifying and implementing projects Kamuela Business Center Building and practices with cultural sensitivity to 64-1032 Mamalahoa Highway, Ste ensure the protection of Hawaii’s 201 environment. Kamuela, Hawaii 96743 (808) 885-6602 HACD [email protected] 99-193 Aiea Heights Drive, Ste 110 Aiea, HI 96701 Kauai Phone: (808) 483-8600 ext. 120 Lex Riggle Fax: (808) 483-8619 4334 Rice Street, Room 104 http://www.hacdhawaii.org/index.ht Lihue, Hawaii 96766-1801 ml (808) 245-9014 Michelle Watson (Exec. Director) [email protected]
Oahu Windward, West & South Oahu Chad Kacir SWCD 99-193 Aiea Heights Drive, Suite 99-193 Aiea Heights Drive, Ste 109 109 Aiea, HI 96701 Aiea, Hawaii 96701 Phone: (808) 483-8600 ext. 354 (808) 483-8600 Fax: (808) 483-8619 [email protected] Bobette Parsons (Cons. Planner 2) (808) 483-8600 ext. 121 Lisa Schofield (Cons. Planner 1) Maui (808) 483-8600 ext. 119 Ranae Ganske-Cerizo
77 Hookele Street, Ste. 202 Kahului, Hawaii 96732 Hāmākua, Ka‘u, Puna & Waiākea (808) 871-5500 SWCDs [email protected]
49 Oahu RC&D Agribusiness Training Series
NRCS Hilo Service Center - Federal Marjorie Stanphill (District Building Administrative Assistant) 154 Wai'ānuenue Avenue, Ste 322 (808) 245-6513 ext. 107 Hilo, HI 96720 Sara Bowen (E & W Kaua‘i SWCDs Phone: (808) 933-8350 Conservation Specialist) Fax: (808) 833-8362 (808) 245-6513 ext. 117 Jennifer Lopez-Riavis (District Administrative Assistant - Ka‘u, West Maui, Central Maui, Olinda- Puna & Waiākea) Kula & Hāna SWCDs (808) 933-8350 NRCS Kahului Service Center 77 Ho‘okele Street, Suite 202 Kona SWCD Kahului, HI 93732 NRCS Kealakekua Service Center Phone: (808) 871-5500 81-948 Waena Oihana Loop, Ste 101 Fax: (808) 873-6184 Kealakekua, HI 96750 Maggie Kramp (District Phone: (808) 322-2484 Administrative Assistant) Fax: (808) 808-322-3735 (808) 871-5500 ext. 101 Mary Robbelee (District John Astilla (HACD Conservation Administrative Assistant) Specialist) (808) 322-2484 ext. 100 (808) 871-5500 ext. 111
Mauna Kea SWCD Moloka‘i-Lāna‘i SWCD PO Box 2975 PO Box 396 Kamuela, HI 96743 Ho‘olehua, HI 96729 Phone: (808) 885-6602 Phone: (808) 567-6869 Fax: (808) 885-4420 Fax: (808) 867-9062 Margaret Becka (District Debbie Kelly (District Manager) Administrative Assistant) (808) 567-6869 ext. 102 (808) 885-6602 ext. 100 John Pipan (HACD Conservation . For additional assistance, contact or Specialist) consult the following: (808) 885-6602 ext. 101 Oahu Resource Conservation and East & West Kaua‘i SWCDs Development NRCS Līhu‘e Service Center - 99-193 Aiea Heights Dr. #111 Watamull Building Aiea, HI 96701 4334 Rice Street, Suite 104 (808) 483-8600 x113 Līhu‘e, HI 96766 www.oahurcd.org Phone: (808) 245-6513 ext. 107 Fax: (808) 246-4639
50 Oahu RC&D Agribusiness Training Series
Pacific Island Area NRCS website . Information for farmers and ranchers http://www.pia.nrcs.usda.gov/ http://www.nrcs.usda.gov/partners/fo r_farmers.html Overview of conservation planning o http://www.ri.nrcs.usda.gov/cons . Examples of common conservation ervation.html practices o http://www.or.nrcs.usda.gov/tech http://www.wi.nrcs.usda.gov/progra nical/conservation-planning-and- ms/solutions/ conservation- records/index.html#plan Prepared by: The Agribusiness Incubator Program University of Hawai‘i
51 Oahu RC&D Agribusiness Training Series
On-Farm Food Safety Like an insurance plan for your business and customers
Overview industry or state/country can afford these As a professional grower, it is in your best types of losses and consumers deserve to be interest to grow the safest food possible – no sold the safest food possible. pathogens (germs) and no residual For your farm, you need to be diligent chemicals. Knowing that you are doing and keep your farm clean and free of everything in your power to keep pathogens, including animals in the contaminates off your food will give you a production and packing areas. You need to level of comfort when you sell to keep records of your chemical and fertilizer wholesalers, restaurants, and consumers. applications, bathroom sanitation, They, too, have an obligation to make sure refrigerator temperatures, and the like. By they keep your safe produce, safe. Your keeping good records you will demonstrate focus, however, will be on delivering a safe that you are serious about the safety of the product to your buyers. The best way to food you provide to customers. look at your farm is to ask yourself, “would On the positive side, there are a number I treat food in my kitchen like I am treating of reasons to make your produce as safe as it on my farm?” possible: In this unit you will find out why it is . A growing numbers of buyers are important to manage your food safety risk, requiring audits and you can be one of how to do that, and how to get help. their select suppliers with an annual audit. Why is this important? . You can sleep better at night knowing Over 5,000 people die each year from food- that you are doing your best to keep the borne illnesses in the U.S. Food-borne people eating your produce safe. illness typically puts consumers in bed (or . You can reduce your liability in case of a the bathroom) or hospital for hours or days. lawsuit stemming from a food-borne Has this every happened to you before? illness issue. For growers, wholesalers, restaurants and retailers, getting people sick can cost The bottom line is that it is simply good millions of dollars in a lawsuit and perhaps business practice to produce the highest the business, and the business owner’s quality food. It might even open new reputation, will be destroyed. This is markets for you! especially critical since many food related stories are posted on the internet, and thus Critical food safety issues on farms could be part of your farm history forever. The types of food-related risks found on For a commodity, country or state to be Hawaii farms are similar to issues found on known as the source of a food-borne illness, the Mainland and worldwide. They fall into it can cost millions of dollars in lost these categories: revenues. The September 4, 2006 spinach E. coli outbreak which sickened more than 200 people and killed three, cost spinach growers over $77 million. No agricultural
52 Oahu RC&D Agribusiness Training Series
Human hygiene . Are your harvesting tools sanitized . Do you have a clean toilet for workers? before each use? . Do workers wash their hands with soap and water after arriving to work, using While there are a number of other issues, the bathroom, smoking, eating, etc.? these issues, in one form or another, are showing up on Hawaii farms. Fortunately, Animals and their feces they can be easily, and inexpensively, . Are pets and wild animals found in your addressed in a timely manner. fields and packing shed? (hint: they should not be there at all). Examples of bad and good practices . Are you using fully-composted compost Here are a few visual examples of what is or manures? (hint: all composts need to good and not so good on Hawaii farms. pass EPA regulations on production quality and have a lab test certifying the Animals do not belong in production or packing lack of pathogens). areas because of pathogens in their feces can . Are there animals in fields uphill from be transferred to humans your operation where their feces could come onto your property during a rainstorm?
Water . What type of water is “touching the edible portion of the crop” during irrigation (hint: it should be potable – drinkable, if possible). . How is your produce wash water? It needs to be potable too – just like in your home kitchen! Dirty harvest containers do not protect consumers Chemicals . Are you using the correct chemicals for the crop you are growing? . Are you using the correct safety equipment when applying chemicals? . Do you keep records of all your chemical applications? . Do you post signs in the field to inform workers when it is safe to re-enter a field after spraying? . Do you follow the pre-harvest interval?
Harvest . Are all your harvest baskets sanitized every day and kept off the soil during harvest?
53 Oahu RC&D Agribusiness Training Series
Chemicals are not handled safely on this farm A good farm toilet!
A lab sample of water on a Hawaii farm
A good employee, washing his hands well for a minimum of 20 seconds
A good farm sink!
Coaching and auditing process You might be asking, “how do I get help?” First, you need to get some guidance or coaching on how to best overcome your farm risk factors. The University of Hawai‘i’s College of Tropical Agriculture and Human Resources (CTAHR) can help
54 Oahu RC&D Agribusiness Training Series
provide trained coaches who can come to The CTAHR food safety website can be your farm and coach you through the entire accessed at: farm transformation process. The CTAHR faculty first starts with 1-1.5 hour walk- www2.ctahr.hawaii.edu/adap2/FoodSafety/i through of your farm with their blue ndex.htm checklist. That checklist is your “to-do” list and they will advise you on where to buy specific items for your audit. There are audits for the farm (called a Ranch), harvest crew, packing shed, processing facility, organic operation, and others. Generally, CTAHR focuses on the Ranch audit, but coaches you to safety on your complete operation. Once you are ready to call for a third- party audit, the Hawaii Department of Agriculture or private companies will come to your farm to give you an unbiased review The national food safety program’s website or audit of your operation. The auditor will is managed by Cornell University and look for exactly the same items you contains a number of documents in various prepared for in your audit. languages: This entire process should take you about 2-3 weeks and not cost you too much http://www.gaps.cornell.edu/ money. It is well worth the investment!
Next steps and resources To get started with a coaching session, call the following CTAHR offices to get connected with a coach: Hawaii: (808)981-5199 Maui: (808)244-3242
Molokai: (808)567-6929 Kauai: (808)274-3471 Next, when ready, call the Hawaii Oahu: (808)956-7138, (808)956-9539 Department of Agriculture at this Oahu number, (808)832-0714, for your actual third-party audit.
Prepared by: James R. Hollyer On-farm Food Safety Coach CTAHR, ADAP Project University of Hawai‘i
55 Oahu RC&D Agribusiness Training Series
Business Structure and Registration Determine the form of ownership that best suits your business venture
Overview Sole proprietorships Many factors should be considered when The vast majority of small businesses start choosing the best form of business out as sole proprietorships. These firms are ownership or structure. The choice you owned by one person, usually the individual make can impact multiple aspects of your who has day-to-day responsibilities for business, including taxes, liability, running the business. Sole proprietors own ownership succession, and others. all the assets of the business and the profits This lesson provides an overview of the generated by it. They also assume complete various forms of business ownership responsibility for any of the liabilities or including sole proprietorship, partnership, debts. In the eyes of the law and the public, corporations, and limited liability the sole proprietor is one in the same with companies. It includes excerpts from the the business. Advantages of a Sole Small Business Administration (SBA) Proprietorship: Program Office guide on business structure. . Easiest and least expensive form of
ownership to organize. Why is this important? . Sole proprietors are in complete control, One of the first decisions that you will have and within the parameters of the law, to make as a business owner is how the may make decisions as they see fit. company should be structured. This decision . Sole proprietors receive all income will have long-term implications, so consult generated by the business to keep or with an accountant and attorney to help you reinvest. select the form of ownership that is right for . Profits from the business flow directly to you. In making a choice, you will want to the owner’s personal tax return. take into account the following: . The business is easy to dissolve, if . Your vision regarding the size and desired. nature of your business.
. The level of control you wish to have. . The level of “structure” you are willing Disadvantages of a Sole Proprietorship: to deal with. . Sole proprietors have unlimited liability . The business’s vulnerability to lawsuits. and are legally responsible for all debts . Tax implications of the different against the business. Their business and ownership structures. personal assets are at risk. . Expected profit (or loss) of the business. . May be at a disadvantage in raising . Whether or not you need to re-invest funds and are often limited to using earnings into the business. funds from personal savings or . Your need for access to cash-out of the consumer loans. business for yourself. . May have a hard time attracting high- caliber employees or those who are
56 Oahu RC&D Agribusiness Training Series
motivated by the opportunity to own a Disadvantages of a Partnership: part of the business. . Partners are jointly and individually . Some employee benefits such as owner’s liable for the actions of the other medical insurance premiums are not partners. directly deductible from business income . Profits must be shared with others. (only partially deductible as an . Because decisions are shared, adjustment to income). disagreements can occur.
. Some employee benefits are not Partnerships deductible from business income on tax In a Partnership, two or more people share returns. ownership of a single business. Like . The partnership may have a limited life; proprietorships, the law does not distinguish it may end upon the withdrawal or death between the business and its owners. The of a partner. partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be Types of Partnerships that should be resolved, future partners will be admitted considered: into the partnership, partners can be bought . General Partnership out, and what steps will be taken to dissolve Partners divide responsibility for the partnership. Yes, it’s hard to think about management and liability as well as the a breakup when the business is just getting shares of profit or loss according to their started, but many partnerships dissolve at internal agreement. Equal shares are crisis times, and unless there is a defined assumed unless there is a written process, there will be even greater problems. agreement that states differently. They also must decide up-front how much . Limited Partnership and Partnership time and capital each will contribute, etc. with limited liability Advantages of a Partnership: Limited means that most of the partners have limited liability (to the extent of . Relatively easy to establish; however their investment) as well as limited input time should be invested in developing regarding management decisions. The the partnership agreement. limited partners invest capital in the . With more than one owner, the ability to company and share in the profits, but raise funds may be increased. take no part in the daily operation of the . Profits from the business flow directly business. Their liability, should the through to the partners’ personal tax company be sued, is limited in returns. proportion to the amount of capital that . Prospective employees may be attracted they invest. This form of ownership is to the business if given the incentive to not often used for operating retail or become a partner. service businesses. Forming a limited . The business usually will benefit from partnership is more complex and formal partners who have complementary skills. than that of a general partnership.
. Joint Venture Resembles a general partnership, but is clearly for a limited period of time or a single project. If the partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership
57 Oahu RC&D Agribusiness Training Series
and will have to file as such and shareholders are not deductible from distribute accumulated partnership assets business income; thus the corporation upon dissolution of the entity. and the shareholder is taxed (this is commonly known as “double taxation’). Corporations A corporation chartered by the state in Subchapter S corporations which it is headquartered is considered by A Subchapter S Corporation refers to a tax law to be a unique entity, separate and apart election only; this election enables from those who own it. A corporation can be shareholders to treat the earnings and profits taxed, it can be sued, and it can enter into as distributions and have them pass through contractual agreements. The owners of a directly to their personal tax return. The corporation are its shareholders. The catch here is that the shareholder, if working shareholders elect a board of directors to for a company that makes a profit, must pay oversee the major policies and decisions. him/herself wages that must meet standards The corporation has a life of its own and of “reasonable compensation.” This can vary does not dissolve when ownership changes. by geographical region as well as occupation, but the basic rule is to pay Advantages of a Corporation: yourself what you would have to pay . Shareholders have limited liability for someone to do your job, as long as there is the corporation’s debts or judgments enough profit. If you do not do this, the IRS against the corporation. can reclassify all of the earnings and profit . Generally, shareholders can only be held as wages, and you will be liable for the accountable for their investment in stock payroll taxes on the total amount. in the company. (Note however, that officers can be held personally liable for Limited liability company (LLC) their actions, such as the failure to The LLC is a relatively new type of hybrid withhold and pay employment taxes.) business structure that is now recognized in . Corporations can raise additional funds most states. It is designed to provide the through the sale of stock. limited liability features of a corporation and . A corporation may deduct the cost of the tax efficiencies and operational benefits it provides to officers and flexibility of a partnership. Formation is employees. more complex and formal than that of a . Can elect S corporation status if certain general partnership. requirements are met. This election The owners are members, and the enables the company to be taxed duration of the LLC is usually determined similarly as a partnership. when the organization papers are filed. The Disadvantages of a Corporation: time limit can be extended, if desired, by a . The process of incorporation requires vote of the members at the time of more time and money than other forms expiration. LLCs must not have more than of organization. two of the four characteristics that define . Corporations are monitored by federal, corporations: Limited liability to the extent state and some local agencies, and as a of assets, continuity of life, centralization of result may face more paperwork to management, and free transferability of comply with regulations. ownership interests. . Incorporating may result in higher overall taxes. Dividends paid to
58 Oahu RC&D Agribusiness Training Series
Special structures Next steps and resources The following business structures are Deciding the form of ownership that best available in some states, but not all. suits your business venture should be given . Limited Liability Partnerships (LLP) are careful consideration. Use your key advisors organized to protect individual partners to assist you in the process. from personal liability for the negligent The following resources provide acts of other partners or employees not information and forms for starting a business under their direct control. Although in the State of Hawaii. Many services are LLPs are not recognized by every state, available online. it is recognized in Hawaii. Partners report their share of profits and losses on Department of Commerce and Consumer their personal tax returns. Affairs Business Registration Division . Limited Partnership (LP) have complex http://hawaii.gov/dcca/areas/breg formation requirements, and require at Mailing Address least one general partner who is fully P. O. Box 40 responsible for partnership obligations Honolulu, Hawaii 96810 and normal business operations. The LP also requires at least one limited partner, Office Location often an investor, who is not involved in King Kalakaua Building everyday operations and is shielded from 335 Merchant Street, Rm. 201 liability for partnership obligations Honolulu, Hawaii 96813 beyond the amount of their investment. Open: 7:45 am - 4:30 pm LPs do not pay tax, but must file a return Monday thru Friday for informational purposes; partners report their share of profits and losses on Phone: their personal returns. (808) 586-2744 (administration) . Non-Profit Corporations are formed for (808) 586-2727 (documents registration) civic, educational, charitable, and religious purposes and enjoy tax-exempt Hawaii Business Express status and limited personal liability. Online registration service provided by Non-profit corporations are managed by the state that covers all the forms a board of directors or trustees. Assets required for business registration with all must be transferred to another non-profit the state agencies and partners. It group if the corporation is dissolved. provides easy to read instructions and context sensitive help. http://hbe.ehawaii.gov/BizEx/home.eb
Prepared by: The Agribusiness Incubator Program University of Hawai‘i
59 Oahu RC&D Agribusiness Training Series
Business and Crop Insurance Find the type of insurance that best fits your business
Buying business insurance is among the best protect against payments as the result of ways to prepare for the unexpected. bodily injury or property damage, medical Insurance is available for nearly any expenses, the cost of defending lawsuits, and business risk. Considering the multitude of settlement bonds or judgments required available options, business owners must during an appeal procedure. carefully weigh whether the cost of insurance premiums justify protection Product Liability Insurance - Every product against certain risks. has the potential to cause personal injury or This section provides an overview of property damage. Companies that several forms of business and crop manufacture, wholesale, distribute, and insurance. It includes excerpts from the retail a product may be liable for its safety. Small Business Administration (SBA) Product liability insurance protects a food Program Office guide on insurance and the supplier against claims stemming from United States Department of Agriculture injuries or illnesses from a food product. (USDA) Risk Management Agency’s Additionally, every service rendered has the (RMA) crop insurance policy guide. potential to cause personal injury or property damage. Businesses are considered liable for Why is this important? negligence, breach of an express or implied Without proper protection, misfortunes such warranty, defective products, and defective as the death of a partner or key employee, warnings or instructions. embezzlement, lawsuits, or natural disasters, could spell the end of a thriving operation. Workers’ Compensation Insurance – Workers’ Compensation (WC) provides Business Insurance employees with medical care and partial Insurance coverage is available for the many wage loss replacement for work-related risks your business might face. The injuries/illnesses. Any employer having one following describes common types of or more workers, full-time or part-time, insurance that you might consider. To find permanent or temporary, is required to an insurance agent or broker, ask other provide WC coverage. business owners for referrals. Your agent or WC coverage can be purchased from an broker who handles your other types of insurance carrier authorized to provide WC insurance (life, homeowners, disability, etc.) insurance in Hawaii. The employer must might be a candidate. You can also obtain a pay the full cost of the premium. list of licensed insurance companies and Employees cannot be assessed for any agents at the Hawaii Insurance Division site: portion of an employer's WC insurance http://insurance.ehawaii.gov/ils/app . premium. The employer must post signage in the General Liability Insurance - Many business workplace and file specific forms when an owners buy general liability or umbrella injury is reported. See the Hawaii State liability insurance to cover legal problems Department of Labor and Industrial due to claims of negligence. These help
60 Oahu RC&D Agribusiness Training Series
Relations Labor Law Requirements for New creating a more predictable stream of Employers guide for additional information. revenue. The federal government subsidizes the Criminal Insurance - No matter how tight premiums for most crop insurance policies. security is in your workplace, theft and Subsidies tend to benefit, most, those malicious damage are always possibilities. producers who invest in higher levels of While the dangers associated with hacking, coverage. Crop insurance is available only vandalism, and general theft are well through private crop insurance agents. recognized, employee embezzlement is Coverage for a crop must be arranged before more common than most business owners its sales closing date. realize. Criminal insurance and employee Features of crop insurance include the bonds can provide protection against losses following: in most criminal areas. . Crop insurance covers the value/yield of damaged crop Business Interruption Insurance - Some . Each crop is insured separately businesses may wish to acquire insurance . Coverage must be purchased before that covers losses during natural disasters, damage occurs fires, and other catastrophes that could cause . Higher coverage costs typically correlate the operation to shut down for a significant with higher premiums period of time. . You must file claim to collect an Key Person Insurance - In addition to a indemnity business continuation plan that outlines how the company will maintain operations if a Insurable crops in Hawaii include the key person dies, falls ill, or leaves, some following: companies may wish to buy key person . Macadamia Trees insurance. This type of coverage is usually . Macadamia Nuts life insurance that names the corporation as . Nursery a beneficiary if an essential person dies or is disabled. These include plants in-ground and in containers. Crop Insurance (Source: State of Hawaii Department of Buying crop insurance is a risk management Agriculture website measure. Producers should always carefully http://hawaii.gov/hdoa/add/risk- consider how a policy will work in management#18) conjunction with their other risk management strategies. Crop insurance Amount of Insurance: agents and other agribusiness specialists can The amount of insurance is (Number of insurable assist farmers in developing a sound trees x tree reference price) x Coverage Level management plan. Crop insurance provides two important The tree reference price is set to take into benefits: It ensures a reliable level of cash account planting and maintenance costs to flow and allows more flexibility in the return the tree to production. marketing plan. With some level of The amount of insurance can also be production insured, the crop could be expressed as: (Number of insurable trees x tree reference price) forward-priced with greater certainty, – Deductible
61 Oahu RC&D Agribusiness Training Series
(Source: State of Hawaii Department of Noninsured Crop Disaster Assistance Agriculture website Program Eligible Crops include crops that http://hawaii.gov/hdoa/add/risk- are grown for food or fiber that cannot be management#21) insured, and other crops, determined by Covered Losses: statute, including: . Adverse Weather . Forage and grazing . Diseases . Aquaculture . Insects . Floriculture . Wildfire . Ornamental nursery . Earthquake . Christmas trees . Volcano . Honey/Maple sap . Sod Additionally, coverage for nurseries can include: Eligible losses must be due to damaging . Value reduction due to delay in weather or natural disaster, including the marketability following: . Failure of irrigation water supply . Drought . Hail Loss that results from neglect or failure to . Excessive heat follow good farming practices are not . Excessive moisture covered. . Freeze To receive a claim, the tree must be dead . Tornado (100% damaged or destroyed) due to the . Hurricane following: . Excessive wind . Insurable cause of loss, or . Volcano . Authorized destruction to contain the . Flood spread of plant disease . Earthquake . Insect damage When the damage for the unit exceeds 80%, . Disease the unit is considered a 100% loss. (Source: State of Hawaii Department of Coverage: Agriculture website . Losses in excess of 50% or prevented http://hawaii.gov/hdoa/add/risk- planting losses management#22) . 55% payment rate
Federal disaster assistance programs Cost: for agriculture . Service Fee: $250 per crop per county The USDA Farm Service Agency (FSA) . Not to exceed $750 per county assists farmers and ranchers that are affected . Not to exceed $1875 per producer by drought and other natural disasters. Assistance is provided after an affected area Cost Waiver: is declared a disaster zone. The Noninsured . May be waived for a limited resource Crop Disaster Assistance Program provides producer financial help to producers of non-insurable . Limited Resource Producer - Direct or crops affected by natural disasters. indirect gross farm sales not more than $100,000 in each of the previous two
62 Oahu RC&D Agribusiness Training Series
years (increasing, starting in fiscal year http://www.fsa.usda.gov/FSA/newsReleases 2004, to adjust for inflation using Prices ?area=newsroom&subject=landing&topic=p Paid by Farmer Index as compiled by fs&newstype=prfactsheet&type=detail&ite National Agricultural Statistical Service m=pf_20080716_distr_en_buyin.html (NASS)); and a total household income at or below the national poverty level for Also, the USDA Risk Management Agency a family of four, or less than 50 percent provides an Adjusted Gross Revenue of county median household income in product that provides protection against each of the previous two years (to be revenue loss due to unavoidable natural determined annually using Commerce disasters and market fluctuations that occur Department data). during the insurance year. Additional information can be found at: Application: http://www.rma.usda.gov/pubs/2003/PAN- . Must apply by the application closing 1667-06rev2.pdf dates . Producers must annually report: Next Steps and Resources Loss within 15 days Deciding on the form of insurance that best Acreage suits your business should be given careful Production thought. Use your key advisors to assist you . Grazed Forage Loss based on: in the process. County determined loss percentage The following links provide additional for each pasture/range information related to insurance for your Acreage report business. . Payment: . Hawaii State Department of Labor and Industrial Relations Labor Law No quality provisions Requirements for New Employers guide: Payments limited to $100,000 http://hawaii.gov/labor/library/guidelines Producers are subject to Average /New-Employer-Packet-11-20-08.pdf Gross Income (AGI) limitations . State of Hawaii Department of (Source: Farm Service Agency) Agriculture: http://hawaii.gov/hdoa/add/risk- There are five additional FSA administered management disaster assistance programs collectively . Crop Insurance Update: referred to as Supplemental Disaster http://www.Rainhail.com Assistance Programs: . Contact the USDA Farm Service . Emergency Assistance for Livestock, Agency for more information on FSA Honey Bees, and Farm-Raised Fish Crop Insurance Programs: (ELAP) . U.S. Department of Agriculture, . Livestock Forage Disaster Program Honolulu County Farm Service Agency 99-193 Aiea Heights Drive, Suite #114 (LFP) Aiea, Hawaii, 96701 . Livestock Indemnity Program (LIP) (808) 483-8600 . Supplemental Revenue Assistance http://www.fsa.usda.gov Payments (SURE) Program . Tree Assistance Program (TAP) Prepared by: The Agribusiness Incubator Program Information on these programs can be found University of Hawai‘i at:
63 Oahu RC&D Agribusiness Training Series
Labor Law Requirements Understand applicable laws when hiring employees
Overview and make it available for inspection, upon There are a number of federal and state laws request, by U.S. government officials. that employers must follow when hiring If the employee is not a citizen or a employees. The laws ensure that both the lawful permanent resident, the individual employer and employee pay required may need to apply for an Employment government taxes. In addition, certain laws Authorization Document (EAD) to prove provide protections to employees by (1) eligibility to work in the U.S. See the establishing minimum wages and benefits, following for more information on (2) preventing discrimination, and (3) citizenship and employment: creating safe workplaces. (http://www.uscis.gov/portal/site/uscis/menu This lesson presents an overview of the item.eb1d4c2a3e5b9ac89243c6a7543f6d1a/ various labor law requirements. It includes ?vgnextoid=1847c9ee2f82b010VgnVCM10 excerpts from the Hawaii State Department 000045f3d6a1RCRD&vgnextchannel=1847 of Labor and Industrial Relations Labor Law c9ee2f82b010VgnVCM10000045f3d6a1RC Requirements for New Employers guide. RD). The reader is encouraged to read the longer Farmers may apply for the H-2A discussions on the various labor laws at: temporary agricultural program which http://hawaii.gov/labor/library/guidelines/Ne establishes a means for agricultural w-Employer-Packet-11-20-08.pdf employers who anticipate a shortage of domestic workers to bring nonimmigrant Why is this important? foreign workers to the U.S. to perform farm Following the various laws will protect you labor or services of a temporary or seasonal and your business from possible legal action nature. The program requires approval from and fines and ensure eligibility in programs the U.S. Citizenship and Immigration that are compliance dependent. Services (USCIS). You will need to file an application with the Department stating that Citizenship requirements there are not sufficient workers who are When you consider hiring an employee, you able, willing, qualified, and available, and must ensure that the individual is authorized that the employment of aliens will not to work in the U.S. Authorized workers adversely affect the wages and working include the following groups: conditions of similarly employed U.S. . Citizens or nationals of the U.S. workers. See the following for additional . Lawful permanent residents information: . Aliens authorized to work during the http://www.foreignlaborcert.doleta.gov/h- period of hire 2a.cfm.
To document authorization, each employee Child labor laws must complete an Employment Eligibility Specific rules and documentation apply if Verification Form I-9 you are employing an individual under the (http://www.uscis.gov/files/form/I-9.pdf). age of 18. For additional information, see: The employer (you) must retain the form
64 Oahu RC&D Agribusiness Training Series
http://hawaii.gov/labor/wsd/pdf/forms/eHCL (http://www.irs.gov/pub/irs-pdf/fw4.pdf ) L-1_4-07.pdf. and Form HW-4 for state taxes (http://www.state.hi.us/tax/2007/hw4.pdf ). Wages Use the Agricultural Employer’s Tax Guide Effective January 1, 2007, the Hawaii (http://www.irs.gov/pub/irs-pdf/p51.pdf ) minimum wage is $7.25 per hour. and the Hawaii State Department of Employees must be paid at least twice Taxation Employer’s Tax Guide monthly and within seven days after the end (http://www.state.hi.us/tax/pubs/06bklta.pdf) of each pay period and pay statements must for tax rate and submission information. include specific information. For wages paid in 2009 the social Employees must be paid overtime for security tax rate is 6.2%, for both the time worked over 40 hours per week. employee and employer, on the first Overtime is equal to one and one-half times $106,800 paid to each employee. You must the regular pay rate. Exceptions to this can withhold this rate from each employee and be found at: pay a matching amount. http://hawaii.gov/labor/wsd/wsd/pdf/wage_a The Medicare tax rate on all wages is nd_hour_faq.pdf. 1.45% each for the employer and the employee. You must withhold this rate from Reporting new hires each employee and pay a matching amount. You must report every newly hired or The most efficient way to make Federal rehired employee to the Hawaii Child tax payments is to use the Electronic Federal Support Enforcement Agency (CSEA) Tax Payment System (see: within 20 days after the date that the https://www.eftps.gov/eftps/home.do). employee starts work. You can either mail For State tax payments, see the State Tax or fax a copy of the employer’s IRS Tax Electronic Filing system Withholding (Form W-4) to the CSEA at: (http://hawaii.gov/tax/b3_elf.htm). Child Support Enforcement Agency New Hire Reporting Directory Unemployment Insurance 601 Kamokila Blvd., Suite 251 The objective of the Unemployment Kapolei, HI 96707 Insurance (UI) program is to provide FAX - (808) 692-7001 temporary financial assistance to workers who are involuntarily unemployed. Federal and State taxes Employers are required to pay UI As an employer, you must withhold certain contributions on the wages of each taxes from your employees’ wages. These employee up to the annual taxable wage include the following: base. The contributions are deposited into a . Federal income tax trust fund, and withdrawn for purposes of . State income tax paying benefits to eligible individuals. There . Social Security can be no deduction from the employee’s . Medicare wages for repayment. Every individual or organization that You must withhold federal and state income becomes an employer must file a status tax from your employees’ wages. To report on Form BB-1, “Basic Business determine how much to withhold from each Application,” with the State Tax Office wage payment, each employee must within 20 days after hiring an employee. A complete Form W-4 for federal taxes determination of liability will be made, the
65 Oahu RC&D Agribusiness Training Series
subject employer will be assigned an TDI coverage can be purchased from an identification number, and tax forms will be authorized TDI insurance carrier (see the furnished. Because new employers do not state’s published list at: have any reserves when they first register as http://hawaii.gov/labor/dcd/PDF/tdi/Approv they have not made any contributions, they ed%20TDI%20Carriers%20%28Rev%2009- are assessed a flat UI contribution rate for 05%29.pdf ). You can pay either the entire approximately two years. premium or charge 50% of the premium (not New employers will be issued an to exceed 0.5% of weekly wages) to eligible “Unemployment Insurance for Workers” employees. poster that should be posted at each work place. The poster furnishes information to Prepaid Health Care (Medical) workers on their benefit rights and how to The Hawaii Prepaid Health Care (PHC) Act file a claim for unemployment benefits. sets minimum standards of health care Employers must file a Quarterly Wage, benefits for workers. Employers are required Contribution and Employment and Training to provide Hawaii employees who suffer Assessment Report, “Form UC-B6” disabilities due to non-work related illnesses (http://hawaii.gov/labor/ui). The most or injuries adequate medical coverage for efficient way to file the report and make these types of illnesses or injuries, thereby your payment is through the Hawaii protecting them from the high cost of Unemployment Insurance (HUI) Express medical and hospital care. website (see: https://hui.ehawaii.gov). Employers must provide health care Agriculture labor, independent coverage to employees who work at least contractor, and family member exclusions twenty (20) hours per week and earn 86.67 exist. See the Handbook for Employers on times the current Hawaii minimum wage a Unemployment Insurance to determine month ($7.25 x 86.67 = $628). Coverage whether you qualify for an exclusion: commences after four (4) consecutive weeks http://hawaii.gov/labor/ui/pdf/HANDBOOK of employment or the earliest time -FOR-EMPLOYERS-2007-FINAL.pdf . thereafter. PHC coverage can be purchased from an Temporary Disability Insurance approved health plan though an authorized The Hawaii Temporary Disability Insurance health care contractor (see the state’s (TDI) law requires employers to provide published list at: partial “wage replacement” insurance http://hawaii.gov/labor/dcd/PDF/PHC/Appr coverage to their eligible employees for non- oved%20HC%20Plans%20-Rev%2009- work-related sickness or injury (including 08.pdf ). You can pay either the entire pregnancy). This means that if an employee premium or share the cost of the premium is unable to work because of an off-the-job with eligible employees. The employee’s sickness or injury and that employee meets share of the premium (for single coverage) the qualifying conditions of the law, the is limited to 1.5% of the individual’s disabled employee will be paid disability or monthly gross wages, not to exceed 50% of sick leave benefits to partially replace the the monthly premium. wages lost. For additional information and a list of exclusions, see the Hawaii State Department of Labor and Industrial Relations Labor Law Requirements for New Employers guide.
66 Oahu RC&D Agribusiness Training Series
Family and Medical Leave Act conditions for Hawaii’s workers. Employers The federal Family and Medical Leave Act are responsible for: allows an employee to take a period of . Furnishing employees with workplaces unpaid leave due to a serious health that are safe and free from recognized condition that makes the employee unable to hazards perform his/her job, to care for a sick family . Creating specific reports member, or to care for a new son or . Maintaining required records on daughter (including by birth, adoption or employee injuries and illness reports, foster care). employee exposure, and medical Besides the federal Family and Medical surveillance Leave Act, which generally applies to . Posting specific information including companies having more than 50 employees, any HIOSH citations that are issued to Hawaii has its own law. The Hawaii law the company applies only to companies with 100 or more employees. For details on the federal and Occupational safety and health laws and state plan, see regulations are enforced through workplace http://www.dol.gov/esa/whd/fmla/ and inspections conducted by HIOSH http://hawaii.gov/labor/wsd/pdf/forms/act44 compliance officers. Inspections are _hawaii_family_leave_law_faqs.pdf . conducted without advance notice. Where violations are found, citations and fines may Workers’ Compensation be issued. Visit the HIOSH website for Workers’ Compensation (WC) provides additional information: employees with medical care and partial http://hawaii.gov/labor/hiosh/. wage loss replacement for a work-related injury/illness. Any employer having one or Employee rights more workers, full-time or part-time, Hawaii law prohibits discrimination permanent or temporary, is required to (unequal treatment) in employment practices provide WC coverage. and policies. The laws cover pre- and post- WC coverage can be purchased from an hiring practices. Discrimination is insurance carrier authorized to provide WC prohibited on the basis of: insurance in Hawaii. The employer must . Sex pay the full cost of the premium. . Race Employees cannot be assessed for any . Ancestry/national origin portion of an employer’s WC insurance . Religion* premium. . Color The employer must post signage in the . Disability workplace and file specific forms when an . Age injury is reported. See the Hawaii State . Marital status Department of Labor and Industrial . Assignment of income for child support Relations Labor Law Requirements for New . Arrest and court record* Employers guide for additional information. . National Guard participation . Sexual orientation Providing a safe workplace . Breast feeding The Hawaii Occupational Safety and Health (HIOSH) laws and regulations are intended *See the Hawaii State Department of to assure safe and healthful working Labor and Industrial Relations Labor
67 Oahu RC&D Agribusiness Training Series
Law Requirements for New Employers Smoke-Free Law guide for exemptions/exceptions. The Smoke Free Hawaii law creates fair and consistent statewide protection for the health Specific rules apply in relation to: of people who do not want to be subjected to . Sexual harassment secondhand smoke. Under the law, smoking . Pregnancy discrimination is prohibited in certain areas. See the . Accommodations for employees with Overview of the Smoke Free Workplaces disabilities Law for prohibited areas and exceptions at . Religious accommodations http://hawaii.gov/health/healthy- lifestyles/tobacco/resources/documents/Haw See the Hawaii State Department of Labor aii%20Smoke%20Free%20Law%20Overvie and Industrial Relations Labor Law w.pdf. Requirements for New Employers guide for details. Many states have enacted “right-to-work” laws that prohibit agreements requiring Notice to employees union membership or dues as a condition of You must publicly display certain employment. information for employees, which explains Hawaii does not have such a right-to- what their rights and benefits are. The work law and allows union contracts Department of Labor and Industrial between an employer and a union. Relations (DLIR) has a free, all-in-one poster that includes required information on: Next steps and resources Wage and Hour, Disability Compensation, Before hiring an employee, be prepared to Occupational Safety and Health, follow the various labor laws. employment discrimination and . Review the Hawaii State Department of whistleblower protection laws, Labor and Industrial Relations Labor Unemployment Insurance, business/plant Law Requirements for New Employers closings, and military leave. guide at: You can download the required http://hawaii.gov/labor/library/guidelines information from the DLIR website, /New-Employer-Packet-11-20-08.pdf http://hawaii.gov/labor/official-labor-law- . Visit the Department of Labor and poster, or obtain a copy of an all-in-one Industrial Relations website at: poster by calling the Oahu office at 586- http://hawaii.gov/labor/ 8842. Prepared by: The Agribusiness Incubator Program University of Hawai‘i
68 Oahu RC&D Agribusiness Training Series
Other Lessons
69 Oahu RC&D Agribusiness Training Series
Borrowing Money for Your Business Taking out a loan can help expand your business, but you need to be prepared
Overview Why is this important? As a businessperson who wants to be If you are ready to improve your business successful, you are probably looking for and just need additional money, commercial opportunities to improve and/or expand your (non-family) loans can be a good way to business. That’s great! It means you are achieve your business dreams. always thinking about moving forward! Often times, however, you do not have What is my credit rating and why is it enough of your own money to pay for new important? equipment, buy (more) land, or hire the new Before we discuss types of loans and where marketing manager that you desire. At you might apply, it is important to times like these, you might want to find understand the foundation of lending – your organizations that will lend you the money “credit rating.” Many lenders will review that you need. Commercial banks, semi- your personal credit rating in addition to any private lending institutions, Hawaii business credit history. Your credit rating is Department of Agriculture, and federal like a batting average in baseball or pass agencies are ready to lend agricultural completion in football -- it is a history of entrepreneurs money, but they require you accomplishments. In the case of your credit to be prepared with current and sufficient rating, it is your history in making money, information on your operation, be a spending money, borrowing money (via somewhat experienced agriculturist, be credit cards and loans), and paying money ready to fill out forms, and be a reliable back. business risk. Common reasons for loan Most creditors report their experience application failure include: insufficient with borrowers to three major US documentation, unstable cash flow, poor companies: Experian, Equifax, and credit rating, not enough years in TransUnion. Each of these companies agriculture, and too short land leases. maintains information about your credit In this lesson you will be provided an history and can provide the information to overview of what is required for each type potential creditors as part of the loan of loan or contact. Don’t be intimidated by application process. In addition, the the paperwork if you really believe that you companies have a process to calculate a have a good business idea and that you can “credit score” (also known as a FICO score). repay the loan on time. There are people in The score is based on the information about different agencies who are eager to help you. your past credit experience. Lenders may You might also find that although you might use the score to determine loan eligibility, not have sufficient business records to rate, and other terms. acquire a loan at present, with a new focus You might be asking, “how do I get a on record keeping, you might be eligible to good credit history or improve one?” apply for a loan within a year or so. Borrowing small amounts of money and paying back on time is the easiest way to
70 Oahu RC&D Agribusiness Training Series establish a credit rating. Then over time you feel that they can trust you with their money can borrow more as you show lenders that by seeing your business history on paper. you can handle that responsibility. Visit http://www.myfico.com/CreditEducation/Im Fulfilling basic lending requirements proveYourScore.aspx for tips on improving The four groups listed below are the main your credit score. lenders to agricultural businesses. To be A good credit score helps people get considered for a loan, these are the types of loans faster and get better rates and terms. It requirements that might be asked of you is important that you take good care of your (there might be more). It is important to credit history all your life because you never assemble the documentation they require, know when you will need to ask for a loan before you request a loan. To ensure that to expand your business. you are prepared, put checks in the boxes where you have the information prepared Getting prepared to apply for a loan and circle the boxes where you need to do Loans are a common business practice. A more work. The circled items should now loan is an agreement between two parties. be on your “to-do” list in the next week or An organization, such as a bank, gives a two if you are serious about applying for a borrower a certain amount of money with loan. the expectation of total repayment It should be noted that the USDA Farm (including interest) by a certain time. This Service Agency (FSA) and the Hawaii is a very straightforward business Department of Agriculture (HDOA) are relationship. In many cases, keeping “lenders of last resort.” This means that business records up-to-date is more difficult they do not want to compete with private for growers because they are working in sector banks. As such, they can only their fields, orchards, and shade-houses most provide you loan opportunities after you of the day. Important records that should be have a written notice from banks saying that maintained include: the bank will not lend to you. Thus, the . Amount of crop(s) planted order of your loan search should be as . Cost of planting follows: . Amount of crop(s) sold . Price of crop(s) sold, and corresponding Commercial Banks business revenues (1 application minimum, perhaps 2 or 3) . Business expenses ↓ . State tax, excise tax, and federal tax Farm Credit Services of Hawaii payment records ↓ ↓ . Business plans, cash flow and profit and FSA HDOA loss statements, and marketing plans Commercial Banks Written, (somewhat) organized records are . Evidence of business success via part of the proof you will need to show a financial statements and tax returns lending institution that you are a good (typically a minimum of three (3) years); business risk. This should make sense… . Well developed business and marketing would you lend someone $10,000 if you met plan (realistic projections); the person for the first time this morning? . On-site visit by your prospective lender; Probably not, and that is the way banks and . Other bank-specific requirements (just government agencies feel too. They need to ask them what they are)
71 Oahu RC&D Agribusiness Training Series
In addition, many local banks work with . For direct operating loans, have agencies/companies like the Small Business sufficient education; training, or at least Administration to offer more flexible review one-year’s experience in managing or and terms to smaller businesses. Call your operating a farm or ranch within the last bank to find out what they offer and the five years. For direct Farm Ownership requirements to apply for these loans. (FO) loans, applicants must have participated in the business operations of Farm Credit Services of Hawaii / Federal a farm or ranch for three years; Land Bank Association . Be a citizen of the United States, This organization specializes in loans to including Puerto Rico, the U. S. Virgin farmers, ranchers, fishermen and nursery Islands, Guam, American Samoa, and owners. The following should be prepared certain former Pacific Island Trust when requesting a loan: Territories, a U.S. non-citizen national, . Past three (3) years of financial or a qualified alien under federal statements, if available. (Include immigration law; schedule for real estate, loans, deposits, . Be unable to obtain credit elsewhere at etc.) If the loan request exceeds reasonable rates and terms to meet actual $400,000, submit four (4) years of year- needs (provide letters of declination end financial statements including the from commercial lenders); most recent completed year plus interim . Possess legal capacity to incur loan financial statement. obligations; . Past three (3) years of Federal Income . Not be delinquent on a federal debt; Tax Returns including the most recent . Not have caused FSA a loss by receiving completed year and a copy of your debt forgiveness (certain exceptions earning statement for the current year apply); and within thirty (30) days of the loan . Be within the time restrictions as to the application if the loan request is less number of years they can receive FSA than $400,000. Submit past four (4) assistance. years of Federal Income Tax Returns, if (Source: Form FSA 2001, www.fsa.usda.gov/) the loan request exceeds $400,000. (Source: http://www.hawaiifarmcredit.com/) Hawaii Department of Agriculture The loan programs available at the Hawaii USDA Farm Service Agency Department of Agriculture (HDOA) are The Farm Service Agency (FSA) provides similar to those at the FSA. The HDOA has temporary credit to loan borrowers. a $25,000 or less, micro-loan program for Borrowers are required to refinance their smaller requests. In all cases, you must be loans with a commercial lender when they rejected by at least two lenders. are financially able to do so. In addition, to The following should be met/prepared improve production and financial when requesting a loan: management ability, the FSA requires all . Be a citizen of the United States who has borrowers to complete farm and financial resided in Hawaii for the preceding three training courses. years, or any permanent resident alien The following should be met/prepared who has resided in Hawaii for the when requesting a loan: preceding three years; . Have a satisfactory history of meeting . Have experience in agriculture credit obligations; (requirements are different for different programs);
72 Oahu RC&D Agribusiness Training Series
. Have a current Balance Sheet and So, now that you know the requirements Income/Expense Statements (past two for each lender, what do you do next? As years); mentioned above, make a list of the missing . Have three year cash flow projection of documents you need to find, construct, or income and expenses (including income complete and be prepared to apply. assumptions); If you need hands-on help with . Have aging schedules for Accounts documents such as business and marketing Payable and Accounts Receivable; plans, cash flow and profit and loss . Have Personal Financial Statements (for statements, you might be able to get some sole proprietors, partners and help from the following organizations: guarantors); . Provide Income Tax Returns (last three ALU LIKE, Inc. years); (808)524-1225 . Have letters of decline http://www.alulike.org . For Agricultural Loans - two declinations from private lenders, Farm UHM – Agribusinesses Incubator Program Credit Bank(s) and/or USDA –FSA; (808)956-3530 . For Aquaculture Loans - three http://aip.hawaii.edu/ declinations from two private lenders, and the appropriate Farm Credit Bank; UHM – Pacific Business Center Program . Have copy(s) of Deed or Lease for farm; (808)956-6286 Marketing/Purchasing contracts (if http://pbcphawaii.com/ applicable); . Have Hawaii State Tax Clearance; Resource contacts . Provide a narrative describing your Much of this lesson is shortened and business (i.e., location, size, employees, updated from Stanley Fujiyama’s article, crops, markets, etc.) Acquiring Business Funding, from the book, (Source: http://hawaii.gov/hdoa/agl) This Hawaii Product Went to Market (published in 1996). The FSA and HDOA provide excellent guidance on how to fill out forms and Farm Credit Services of Hawaii / Federal prepare your loan package. Land Bank Association of Hawaii http://www.hawaiifarmcredit.com/ Wow, lots of options, now what? This is just a short list of lending options Main Branch focused on agriculturally-related businesses. 2850 Pa’a Street, Suite 100 While not detailed here, if you have a 100% Honolulu, HI 96819 Hawaiian-owned (need to show proof of Phone: (808)836-8009 ancestry by a birth certificate) business, you might be able to get financial assistance Hilo Branch from the Office of Hawaiian Affairs (see 988 Kinoole Street below). Even more loan opportunities are Hilo, HI 96720 available if you are manufacturing. The list Phone: (808)961-3708 at the end of this lesson gives you contact Loan types: information for many programs and the . Land purchases types of loans they provide. . Production and operating expenses
73 Oahu RC&D Agribusiness Training Series
USDA Farm Service Agency (FSA) Native Hawaiian Revolving Fund Loan http://www.fsa.usda.gov/ (NHRLF) http:/www.oha.org 300 Ala Moana Blvd., Room 5-122 PO Box 50008 Office of Hawaiian Affairs Honolulu, HI 96850 711 Kapi’olani Blvd., Suite 500 Phone: (808)541-2600 Honolulu, HI 96813 Phone: (808)594-1835 Loan types: . Farm loans Loan types: . Farm ownership loans . Business development . Farm operating loans . Loans for socially disadvantaged and Native Hawaiian Revolving Fund Loan beginning farmers (NHRLF) . Down payment loans http:/www.oha.org . Rural youth loans . Emergency loans Office of Hawaiian Affairs 711 Kapi’olani Blvd., Suite 500 Small Business Administration Honolulu, HI 96813 http://www.sba.gov/localresources/district/hi Phone: (808)594-1835 / Loan types: Hawaii District Office . Business development 300 Ala Moana Blvd Room 2-235 Box 50207 Get a Free Credit Report to Verify Your Honolulu, Hawaii 96850 Credit History Phone: (808)541-2990 http://www.annualcreditreport.com/
Loan types: Learn About Your Credit Score . Working capital http://www.myfico.com/ . Machinery and equipment . Land, building, and improvements Prepared by: . Debt refinancing James R. Hollyer, Program Manager CTAHR, ADAP Project University of Hawai‘i
74 Oahu RC&D Agribusiness Training Series
Acquiring Grant Support Getting organizations to give you money is nice, but requires work
Overview grant givers have to show their organizations A “grant” is a gift of resources, typically that good and impactful things will result if money. The idea that there are government, they give you financial support. More and for-profit, and non-profit groups that will more today we have another aspect to actually give you money for your business is consider in a tight economy, which is that an amazing concept. Federal, state, county, granters are getting more “precise” with the businesses, and non-profit entities often types of activities they are willing to fund. have resources to grant to businesses (or In the past, grant requests typically were a non-profits) that can illustrate that they can little broader. Thus, like a good marriage, use grant funds wisely and create impact. you need to have compatible interests with But, these grants require work to locate, the grant givers or you won’t even reach the apply for, and report on, so they do not proposal review stage. For example, if an come without cost. organization is willing to support water Typical reasons for grant application saving devices for growers, and you want a failure include missing deadlines, submitting new tractor to be more efficient in the field, poorly written or incomplete applications, it is clearly a mismatch of intentions. Here having a poor business track record (bad is a list of steps that you can follow to reputation in the community) and increase your chances of “winning” a grant. insufficient talent to implement the proposal. 1. Keep searching for good grant matches. In this lesson you will be provided a The Hawaii Community Foundation is a basic overview of the grant process. Like great resource for local grants filling-out a loan application, it can seem (http://www.hawaiicommunityfoundatio difficult at first, but if you break the process n.org/). That organization also has a down into smaller parts, and start early, you webpage for grant writers and grant can be successful. managers (http://www.hawaiicommunityfoundatio Why is this important? n.org/index.php?id=77) Getting money that you do not have to pay 2. Acquire the most recent grant back is better than getting a loan. So, if you application and guidelines and with a have an idea that others are willing to highlighter pen, highlight the critical support, invest some time and know-how to features, such as: apply for a grant. a. What types of projects they are funding. About grants b. What types of costs they are As mentioned above, you can apply for covering. money that you don’t have to pay back. The c. What, if any, are the “matching” trick with grants, however, is that you need requirements and do you need to put to have an idea, product or business that the your money out first and request grant reviewer feels is a worthwhile reimbursement? (This could be a big “investment.” The word investment is used deal as some grants will only give here just like it is with a loan because even you 25% of what you need, and you
75 Oahu RC&D Agribusiness Training Series
need to come up with the other 75%; achieve and how that meets the desires though, 25% is better than nothing!) of the funders. Be sure to put the final d. Application deadline. version in the requested format or e. Application format (font size, outline and answer each question in the number of pages, number of application form. If no format is appendices, support letters). provided, divide your application into f. What reporting and final the following generally accepted documentation will be required of categories: (1) What you want to do and you? Why it is important? (2) How you will g. Number of copies of the application do it (including when and where)? (3) required. Any additional information on why you 3. Think and speak positively about your are the right person for the job. project. 4. Use as much data as you have to support 4. Set-up a clean place in your business your claims of the magnitude of the where you can write your grant. issues to be addressed, the potential 5. If you plan to seek partners or impact of the successful implementation professional writers for your grant, be of your project, and your ability to carry clear with them about your expectations out the project. and what you can offer in return, and ask 5. Now, get a trusted friend to give you them what they specifically expect from some constructive feedback. Hearing you in exchange for their time and talent. feedback can be hard especially if you Never assume people will help for free, don’t write often, so prepare yourself to ask them. hear the truth (or a version of the truth). 6. Know how long it will take for the grant One way of managing the feedback is to application to physically arrive at its ask, “Can you please give me three destination so that you can meet things you like about my proposal and application deadlines. then give me details of where and how I 7. If the grant application form does not can make it even better?” This simple come with a checklist for completing the request can help the person giving you grant, make one and use it. feedback stay focused on what kind of feedback you want. There are other things to consider, but the 6. While that review is taking place, get all above are the major ones. Still interested in the other required documents in order. getting someone else’s “free” money? Yes?! These could include cash flow Good, here’s what to do next. statements, profit and loss statements, 1. Take out a calendar and mark-off business and marketing plans, copies of enough days and hours for you to write federal, state and excise tax forms, by- your grant proposal. This has to be laws of your organization, etc. distraction-free time. 7. Get the review back and make those 2. Start writing your grant response. Just changes that seem reasonable, even if start writing down your ideas as fast as your ego is fighting it. Thank your you can get them out of your head and reviewers for their time. onto the paper or your keyboard. 8. If you have time, have someone else 3. Go back to your “brainstorming” and read your revised grant proposal to get begin to craft a readable, engaging, and one final set of comments. Revise your methodical story about what you want to proposal accordingly.
76 Oahu RC&D Agribusiness Training Series
9. Use your checklist to make sure you asked for money to do. (Be careful what have all the pieces in place. Leaving you wish for!) even one little item out can cause the 1. Again, take out your calendar and put in person screening the applications to some reporting dates. reject it or return it to you un-reviewed. 2. Keep track of all your expenses – save Grant writing is a serious business and all receipts and put them in a safe place. one mistake can take you out of the 3. Report progress as required. competition. 10. Make copies, sign the forms, and get that Well, that is about it for writing, winning application in the mail or sent via the and performing under a grant program. It web! should now be obvious that grant money is 11. When you’ve completed the above, think not really “free.” But, if you received a positive thoughts and go celebrate your $10,000 grant to install a new greenhouse hard work. sprinkler system and it took you only 30 hours to craft and deliver your grant The review process typically works like this: proposal, you just made more than $300 per 1. Applications are opened if they arrive by hour. Now, that is sweet! the due date and time. If not received on time, they may be disqualified and Look here for grants returned. Here are some sources of grants that are 2. Documents are checked for open to growers and don’t require that you completeness, and if not complete, might be connected to an educational or research be rejected. institution. Note, these grant programs are 3. Applications are reviewed by a subject to change at any time. committee that has been given guidelines for scoring the quality and Hawaii Department of Agriculture impact of proposals, often relative to http://hawaii.gov/hdoa/add/add_md their cost. 4. Proposals are ranked on points and then Hawaii Department of Agriculture offers are made to the highest-ranked Agricultural Development Division grant proposals. Those not selected are Market Development Branch often provided helpful feedback on what 1428 South King Street was wrong with the proposal. This is of Honolulu, HI, 96814-2512 great value to you even if you were not Phone: (808)973-9595 selected. Take that feedback and make E-mail: [email protected] your proposal even better next time. 5. If you are selected, more forms need to Grant types: be signed by you or your organization, . Marketing support and performance contracts are developed and signed. Oahu Resource Conservation and Development Council Now, finally, you start your work. This is 99-193 Aiea Heights Drive one of the most dangerous times in the HARC Bldg, Suite 111 process to keep and build your reputation as Aiea, HI 96701 often months have passed and you now have Phone: (808)483-8600 X112 the responsibility of implementing what you http://www.oahurcd.org/
77 Oahu RC&D Agribusiness Training Series
Grant types: Grant types: . Support best conservation practices: . Business development Agricultural Management Assistance (AMA) Office of Hawaiian Affairs Conservation Innovation Grants http://www.oha.org/ (CIG) Conservation Security Program Office of Hawaiian Affairs (CSP) 711 Kapi’olani Blvd., Suite 500 Cooperative Conservation Honolulu, HI 96813 Partnership Initiative (CCPI) Phone: (808)594-1835 Environmental Quality Incentives Program (EQIP) Grant types: Farm and Ranch Land Protection . Up to $100,000 to support programs Program (FRPP) which address OHA Strategic Plan goals Grassland Reserve Program (GRP) in the areas of Education, Health, Value-added Producer Grant Human Services, Housing, Economic (VAPG) Development, Native Rights, Culture, Wildlife Habitat Incentives Program Land Management, and Governance. (WHIP)
Wetlands Reserve Program (WRP) USDA Natural Resources Conservation Service (NRCS) USDA Rural Development http://www.pia.nrcs.usda.gov/ http://www.rurdev.usda.gov/hi/index.htm
Aiea Service Center Room 311, Federal Building RL Cushing Building 154 Waianuenue Avenue 99-193 Aiea Heights Drive Hilo, Hawaii 96720 Aiea, HI 96701 Tel: (808)933-8380 Phone: (808)483-8600 ext 354
Grant types: . Community Facilities Programs . Faith-Based and Community Initiatives Programs . Rural Business - Cooperative Programs . Rural Housing Programs . Rural Utilities Programs
78 Oahu RC&D Agribusiness Training Series
Western Sustainable Agriculture Research Grant types: and Education (WSARE) . Farmer/Rancher (FRG) grants http://wsare.usu.edu/ . Graduate Fellow Grants in Sustainable Agriculture Utah State University . Professional + Producer grant Ag Science 305 . Professional Development Program Logan, UT 84322-4865 (PDP) grants Phone: (435)797-2257 . Research and Education (R&E) grants.
Prepared by: James R. Hollyer, Program Manager CTAHR, ADAP Project University of Hawai‘i
79 Oahu RC&D Agribusiness Training Series
Distributing Your Product within Hawaii Taking your product to market, do you have to do all the work?
Overview For example, let’s assume that you want There are many ways to get people to buy to deliver your product to a number of your wonderful Hawaii-grown or -made restaurants. One question is, does it make product. Customers can come to your more financial sense to personally make the business and buy it directly from you, you delivery or would it be better to have an can take it to a farmers’ market and sell it to employee do the delivery? Or, instead of an them, you can take it to a restaurant, a employee, would it make more sense to pay wholesaler can send a truck to your farm, or a distributor (it could be another grower or a it can be a combination of distribution distribution company) to deliver your options. Each one of these options has its product as well as other peoples’ products to positive and negative sides. your customer? Or, perhaps you want to In this lesson the costs of distribution make the deliveries for yourself and for will be discussed, along with the pros and others in your area, and start a dedicated cons of different distribution models. Some distribution arm of your own. local resources also will be given. To start making these types of decisions you need to know how much your time is Why is this important? worth. If you are making $20/hour working Unless you sell all of your product from on the farm (wage plus some amount of the your farm or business, you are limited in profit), but you can hire someone for your number of customers because only a $12/hour to deliver products – it may make limited number are willing and able go to more financial sense to hire someone to your place of business (in addition, you may make deliveries. Driving in traffic and have insufficient parking or be located far delivering your product may not be wise use from your customers). It is in your best of your time; however, making the delivery interest to get your product in front of as might help you build relationships and get many potential buyers as possible, national useful feedback from customers. Determine or global is often best, but statewide is a whether your business is making more great start. money, overall, by your staying on the farm. If so, stay on the farm and pay someone else What does it cost to distribute products? to deliver your products. It is far easier to reach out to more buyers if The amount of money you will be someone helps you do some of the paying for distribution is: distribution work. You probably produce a very nice crop or processed food product, You wage and fringe plus some but if you also want to deliver that product part of the profit, truck cost, insurance, gas. to market, you might be diluting your focus. It might help to focus on the things that you Your employee wage and fringe, truck cost, do best and outsource things that might be insurance, gas. better done by someone else.
80 Oahu RC&D Agribusiness Training Series
Distributor flat fee per pound or unit or refrigerated trucks, and that is not a good mile, and/or percentage of practice as shelf-life will be reduced. When the (farm gate / wholesale) value of the product. shelf-life is reduced your product goes bad faster and shoppers might not want to buy it Pros and cons of distribution options again. Each distribution option has good things and Your truck is also a rolling not-so-good things about it. advertisement for your company. What does your truck say when it is dirty outside and Delivery Pros Cons inside and someone else’s name is on it? option Here is a great example of a moving You deliver You get to meet You are away advertisement. customers and from the farm. get feedback. It may cost you more in lost productivity than you would pay someone to do the job. Employee You can focus It will cost you delivers on high quality labor wages. production. Your employee is now the “face” of your company with your customer. Negotiating with distributors Commercial You can focus Cost you As mentioned earlier, using food distributors distributor on high quality some amount has a number of advantages which you will production. of money. need to pay for. Discuss the following with Distributor might Will not be the have a better “face” of your potential distributors: (refrigerated, company with . Cost. How can you get the lowest cost covered) truck client as they and maintain the same quality service? than you. represent . Shipping service quality. Are the trucks Distributor might many product cleaned daily and are all produce kept on help you get into lines. even more pallets? Is there a refrigerator unit in the markets. truck and is it well-maintained? . Insurance coverage. How will your As you can see, each option has trade-offs. product be covered by insurance and It is important to think through your options what is the process for filing a claim? carefully so that you are efficient with your . Expanding markets. Where else might use of resources (time and money). your product be sold within your shipper’s present route? Using your own truck to deliver Your truck provides your products with Where to find distributors protection from the weather and dust. Many There are a number of food distributors on growers deliver in uncovered and un- Oahu. The yellow pages lists them under “food brokers” and “food products –
81 Oahu RC&D Agribusiness Training Series
wholesale and manufacturers.” You can . Insurance coverage. How will your also talk with friends about the service product be covered by their insurance providers they are using. Many wholesalers and what is the process for filing a make farm visits to pick-up crops as well. claim? . Staging: Where will your product sit in Shipping inter-island transit? Will it be in a covered area or Boat or air shipping is available to the out in the sun? Will it be cooled or kept neighbor islands (see the lesson on frozen? Exporting for information about shipping to the mainland and overseas). Like working Getting your product to market with a distributor, working with a shipper The more you can get your product out to requires that you know how your product is more people, the better chance you have at going to be handled under all circumstances selling it. You can distribute your product (bad weather, power outage, employee or hire someone else to do it for you. In any strike). Ask your prospective shipper: case, spend some time evaluating the pros . Cost: How can you get the lowest cost and cons of your options and pick the one and maintain the same quality service? that suits you best. From time to time, . Shipping service quality: Are the evaluate your decision, and make necessary containers cleaned daily, and all produce changes. kept on pallets? Is there a well- maintained refrigerator unit? Prepared by: James R. Hollyer, Program Manager CTAHR, ADAP Project University of Hawai‘i
82 Oahu RC&D Agribusiness Training Series
Exporting Off Oahu There are business opportunities beyond the reef, but developing them requires care
Overview product because their customers won’t buy Serving your market on Oahu might be any more. The only way to sell more of enough work and income for you, and if so, your product is to find additional customers good for you! But, if it is not and you want – exporting does that for you. to expand your market beyond the shores of Oahu, you need to be prepared for additional Where to start requirements. These requirements include The first thing to do when you want to additional business paperwork and better expand is to take care of the customers you understanding of banking systems. In already have. Your present customers addition, for fresh agricultural products, you provide you with a solid, albeit smaller, will typically need a phytosanitary market, and if your export ventures do not certificate (ensuring that you have checked turn out well, you still need these loyal for diseases and pests on agricultural business partners. materials). Exporting to a neighbor island is The next step is to think carefully about relatively simple, but the process gets more whether you have the production capacity, complex when you ship to the US Mainland skills and time it takes to develop and and more complex still when shipping to a maintain even more business relationships. foreign country. Fear not, it has been done Let’s assume that you have the ability to countless times by American agricultural produce and sell 5, 10, 20% more product if entrepreneurs and is typically just a matter you just had the market. of knowing the rules and following them methodically. Find new customers In this lesson, we will provide you the Business is a match of supply and demand. basics of exporting. Because every product You are the supplier and someone else is the and business relationship is unique, take this “demander” or customer. To export, you advice and add it to the knowledge you need to identify new customers in new acquire as you create an opening in a new markets. If you have an exotic product, such market. as an herb or spice, your first step in finding This lesson provides only an overview new markets might be to identify what else on exporting -- the reader is encouraged to is being imported into the U.S. (for other read the longer discussions on the many countries the import data may not be easily aspects of exporting in the CTAHR book, accessible). The U.S. Department of This Hawaii Product Went to Market Agriculture has a wealth of data on imports (http://www.ctahr.hawaii.edu/ctahr2001/PIO to the U.S.: /ForSalePubs.asp) http://www.marketnews.usda.gov/portal/fv For Hawaii import data, go to: Why is this important? http://hawaii.gov/hdoa/add/man/mktnews/m Exporting is a great way to expose your arket-news-reports product to a larger market. In a one-island To identify specific customers (including market you might reach a level where your wholesalers, retailers, and/or restaurateurs) customers will not buy any more of your
83 Oahu RC&D Agribusiness Training Series
in a given marketplace, try the following to shipping cost and add that to your cost of make initial contacts: production. . Attend trade shows such as the annual Once you have your total cost (cost of Produce Marketing Association’s trade production plus all costs of shipping and show, or your industry’s particular trade handling) and have determined how much show. you will charge, it is time to make first . Look for customers on the internet or in contact with potential buyers. Call the yellow pages. wholesalers in your desired target market . Talk to other friends in the business and and talk to them about the possibility of see if they would be willing to share carrying your Hawaii product. Sell them on their contacts with you. your product by explaining its qualities. Sending them a product sample (plus a nice Promise only what you can deliver box of Hawaii Macadamia nut chocolates!), It is important to know what it will cost you brochure, a business card, and a price list to get your product to a new market and how can help them understand if there is much of a high quality product you can potential in your product. In your initial produce. Once you have a good idea of discussions with your potential new buyer, those numbers, then you need to determine ask how much they think they can sell in a what it will cost you to get your product to week/month/season/year and if they can market. You will need to add that cost to meet your price (with all the shipping costs the cost of production for your product to included). Be prepared to negotiate a bit on arrive at a price you can offer to a buyer. price, thus you should have a little UHM-CTAHR has a poster that could help “padding” in your price so that even if you you with your cost of production accepted a few cents less per pound or unit, calculations (see Easy Profit Estimator): your total revenues would still be more than http://www.ctahr.hawaii.edu/ctahr2001/PIO/ your costs and you would make a profit. While the U.S. Postal System may be a shipping option in some cases, you will Getting your product ready for market typically need to get your perishable Dressing up your product in a nice package agricultural product to market faster than the (attractive and stable enough to arrive at its USPS can deliver. Global air shipping destination in good shape) is important to companies such as FedEx, DHL, and UPS catching the eye of your customers (refer to handle many Hawaii products. Products the lesson on Positioning and Branding). may also be shipped using airlines either Not only is it important to impress the final directly or through local freight-forwarders. customer, but your wholesaler as well. The Similarly, when shipping on the ocean, there wholesaler typically handles hundreds of are large and small companies. Get on the products so make it easy for the wholesaler phone and/or visit these service providers to handle your product. Be sure product with a sample of your product before you boxes can stack so that they can store and make contact with your prospective buyers. sell more of your products to their Make sure you understand the shipper’s customers. There are many designers in ability to keep your product cool, protected Hawaii who can help you with your package from the sun, protected from theft, and their design. insurance policies just in case your product One of the things you need to be aware is damaged in transit. Determine your of is product labeling requirements. There are a number of U.S. and Hawaii (and other
84 Oahu RC&D Agribusiness Training Series
state and international) labeling Don’t pack a pest requirements. For example, since September The reputation of your product and company 2008, U.S. agricultural products must be is one of the most valuable aspects of your labeled according to Country of Origin business. One area where producers often Labeling (COOL) regulations. For a listing make a critical mistake is when they ship of current labeling guidelines, contact both products that have not been sufficiently the Hawaii Department of Agriculture’s screened or treated for pests. Whole Commodities Branch shipments of products have been destroyed (http://hawaii.gov/hdoa/qad/comm/comm/ in distant markets because they have ants or (808)832-0700) for raw agricultural other pests on or in their product. products, and the Hawaii Department of Destruction of your shipment can cost you a Health’s Food and Drug Branch lot of money, a loss of a client, and can (http://hawaii.gov/health/environmental/foo damage your reputation. d_drug/about.html/ (808)586-4725) for To determine phytosanitary and general processed products. export requirements for your product, get Some states might also have unique some advice from the Hawaii Department of labeling laws to which you must comply (for Agriculture’s Plant Industry Division example when there is a bottle deposit), talk (http://hawaii.gov/hdoa/pi/ (808)832-0566) to your buyer about this before you start and the USDA’s Animal Plant Health shipping any product. For international Inspection Service exporting, it is important to work with the (http://www.aphis.usda.gov/import_export/i U.S. embassies through the USDA Foreign ndex.shtml/ (808)861-8494). Agriculture Service (http://www.fas.usda.gov/agx/exporter_assis Decide how much of the work you tance.asp). Each country might have laws want to do on labeling, package size, types of materials Now that you have lined-up a buyer and and the like, so it is best to do your agree on a price and volume, you know homework before sending your products about the product labeling and phytosanitary overseas. The Hawaii Department of requirements, you have to decide how much Agriculture’s Market Development division of the exporting paperwork and legwork you can also help get you ready to sell beyond want to do to get your agricultural product the reef with advice, access to tradeshows, on a boat or airplane and safely to your and other valuable services buyer. (http://hawaii.gov/hdoa/add/md/ (808)973- Clearly, with enough time you can do all 9595). the tasks required to get your product to a One of the best things in working with distant market. But, is it worth doing the Foreign Agricultural Service is that they everything? Most producers are faced with have offices in most U.S. embassies in the the question: Do I want to do everything, or world and they have local employees as well do I want to focus on what I do best and as U.S. citizens working for them. Thus, what brings me the most satisfaction and let you can have easy access to people who others keep some of my revenue in exchange know about local customs and language, for a service they provide me? What is the business practices, and money exchange. answer for you? If you don’t want to do it all, look for a distributor and/or a freight forwarder. Both have years of experience getting other
85 Oahu RC&D Agribusiness Training Series
peoples’ products to market so they can bring that knowledge very quickly.
Prepare for take off Just like running a good farming operation where you sell locally, when you add exporting to your daily routine there is a lot to think about and do well. CTAHR prepared a “pre-flight” checklist for exporting that can give you a solid understanding of all the details that go into exporting. Download it at this link: (http://www.ctahr.hawaii.edu/oc/freepubs/pd f/ET-1.pdf)
Prepared by: James R. Hollyer, Program Manager CTAHR, ADAP Project University of Hawai‘i
86 Oahu RC&D Agribusiness Training Series
You Are Not Alone! You work hard in your business… here are some agencies that can support you
Overview Agricultural product processing To be a successful grower and successful Pacific Gateway Center business person requires that you have 720 North King Street different skills in numerous places Honolulu, Hawaii, 96817 throughout your farm and business. If you (808)845-3918 don’t have a certain skill, you can buy it, [email protected] trade for it, or perhaps someone will loan http://www.pacificgatewaycenter.org/ you their expertise. Sometimes we need a little help, and sometimes we need a lot. Agriculture parks Fortunately, there are a number of Agriculture Resource Management organizations on Oahu that are willing and Hawaii Dept of Agriculture able to provide a range of services. There is 1428 South King Street no need to struggle, just ask if your need can Honolulu, HI, 96814 be addressed, and you will know right away. (808)973-9478 If one organization cannot help, try another. [email protected] Ask upfront if there is a cost and a limit to http://hawaii.gov/hdoa/arm/arm_agparks the services, and what is expected from you to get that service. Aquaculture development Hawaii Department of Agriculture Why is this important? Aquaculture Development Program It is important to do many things well on 1177 Alakea Street #400 your farm. If you are good at growing, but Honolulu, Hawaii 96813 not so good at bookkeeping, you put your (808)587-0030 business in danger of failing financially. It [email protected] makes a great deal of sense to ask for help http://hawaii.gov/hdoa/adp when you need it. Certainly, no one can do the labor on your farm for you, but many Agriculture loan organizations can provide coaching until Agricultural Loan Division you have a new level of competency with a Hawaii Dept of Agriculture particular skill. 1428 South King Street
Honolulu, HI, 96814 Helpful organizations (808)973-9460 There are many public organizations that http://hawaii.gov/hdoa/agl/agl you can go to on Oahu that provide services to agricultural entrepreneurs. For a list of non-commercial lending institutions see the lesson on Loans, and for grant organizations see the lesson on Grants. The following list covers many of the other needs of the typical agribusiness person.
87 Oahu RC&D Agribusiness Training Series
Business Development Disaster Honolulu Small Business Development Noninsured Crop Disaster Assistance Center Program 1833 Kalakaua Avenue - Suite 400 Emergency Conservation Program Honolulu, HI 96815 Emergency Loans (808)945-1430 Disaster Set Aside http://www.hawaii- Supplemental Agriculture Disaster sbdc.org/honolulucenter.htm Assistance
Agribusiness Incubator Program USDA, Farm Service Agency University of Hawai‘i 99-193 Aiea Heights Drive, Suite 114 3050 Maile Way, Gilmore 115A Aiea, Hawaii, 96701 Honolulu, Hawaii, 96822 (808)483-8600, #353 (808)956-3530 http://www.fsa.usda.gov/ [email protected] http://aip.hawaii.edu/ Disease / pest identification
UHM-CTAHR, Agricultural Diagnostics Oahu Resource Conservation and Service Center Development 1910 East-West Rd., Sherman 134 99-193 Aiea Heights Drive, Suite 111 Honolulu, HI 96822 Aiea, Hawaii, 96701 (808)956-6706 (808)483-8600, #113 http://www2.ctahr.hawaii.edu/adsc/ http://www.oahurcd.org/
Score Hawaii, Inc. Enforcement (import) 300 Ala Moana Blvd. Rm. 2-235 USDA, Smuggling Interdiction and Trade Honolulu, Hawaii 96850 3375 Koapaka St, #G-330 (808)547-2700 Honolulu, Hawaii, 96819 [email protected] (808)861-8445 http://www.hawaiiscore.org/ http://www.aphis.usda.gov/international_saf eguarding/sitc/index.shtml
Commodity standards Commodities Branch Extension offices (University of Hawai‘i Hawaii Department of Agriculture CTAHR) 1851 Auiki Street http://www.ctahr.hawaii.edu/site/Extprogra Honolulu, HI 96819-3100 ms.aspx (808)832-0700 http://hawaii.gov/hdoa/qad/comm/comm UHM-CTAHR, Mānoa Campus Office 1955 East-West Rd, Ag Sci 217 Honolulu, HI 96822 (808)956-7138
UHM-CTAHR, Kaneohe Extension Office 45-260 Waikalua Road, Suite 101 Kaneohe, HI, 96744 (808)247-0421
88 Oahu RC&D Agribusiness Training Series
UHM-CTAHR, Pearl City Urban Garden Food processing 955 Kamehameha Hwy. UHM-CTAHR, Tropical Plant and Soil Pearl City, HI 96782-3344 Science Department (808)453-6050 3190 Maile Way, St. John 102 Honolulu, HI 96822 UHM-CTAHR, Wahiawa Extension Office (808)956-6564 910 California Ave. http://www.ctahr.hawaii.edu/aurora/foodsafe Wahiawa, HI 96786-2124 ty.asp (808)622-4185 Gardening questions and Master Feed testing Gardeners UHM-CTAHR, Agricultural Diagnostics UHM-CTAHR, Pearl City Urban Garden Service Center 955 Kamehameha Hwy. 1910 East-West Rd., Sherman 134 Pearl City, HI 96782-3344 Honolulu, HI 96822 (808)453-6050 (808)956-6706 http://www.ctahr.hawaii.edu/ougc/ http://www2.ctahr.hawaii.edu/adsc/ Land conservation practices Food imports USDA, Natural Resource Conservation For International Shipment – USDA Service For Domestic US Shipment – Animals, 99-193 Aiea Heights Drive, Suite 109 Plants, microorganisms Aiea, Hawaii, 96701 Hawaii Department of Agriculture (808)483-8600, #101 Plant Quarantine Branch http://www.pia.nrcs.usda.gov/ 1849 Auiki St. Honolulu, HI 96819 Labeling, weights and measurements (808)832-0566 Measurement Standards Branch Hawaii Department of Agriculture Animal Quarantine Branch 1851 Auiki Street (808)483-7151 Honolulu, HI 96819-3100 http://hawaii.gov/hdoa/Info/doa_importing (808)832-0700 http://hawaii.gov/hdoa/qad/ms/ms Food safety coaching Farm Loans UHM-CTAHR, Agriculture Development in Federal the American Pacific USDA, Farm Service Agency 3050 Maile Way, Gilmore 112 99-193 Aiea Heights Drive, Suite 114 Honolulu, HI 96822 Aiea, Hawaii, 96701 (808)956-9539 (808)483-8600, #353 http://www.ctahr.hawaii.edu/adap/FoodSafet http://www.fsa.usda.gov/ y/
89 Oahu RC&D Agribusiness Training Series
State Other State of Hawaii Department of Agriculture Value Added Producer Grant Program Agricultural Loan Division Rural Energy for American Program 1428 South King Street Honolulu, Hawaii, 96814 USDA, Rural Development (808)973-9460 99-193 Aiea Heights Drive, Suite 111 http://hawaii.gov/hdoa/agl/agl Aiea, Hawaii, 96701 (808)483-8600, #355 Milk http://www.rurdev.usda.gov/ Milk Control Section Hawaii Department of Agriculture Pest / disease identification 1851 Auiki Street UHM-CTAHR, Agricultural Diagnostics Honolulu, HI 96819-3100 Service Center (808)832-0700 1910 East-West Rd., Sherman 134 http://hawaii.gov/hdoa/qad/comm/milk- Honolulu, HI 96822 control/?searchterm=milk%20control (808)956-6706 http://www2.ctahr.hawaii.edu/adsc/ Markets (farmers) City & County Department of Parks and Pesticides Recreation People’s Open Market Education 1527 Keeaumoku Street UHM-CTAHR, Hawaii Pesticide Risk Honolulu, HI 96822 Reduction Education (808)522-7088 3190 Maile Way, St. John 307 http://www.co.honolulu.hi.us/parks/program Honolulu, HI 96822-2271 s/pom/ (808)956-6007 http://pesticides.hawaii.edu/ Hawaii Farm Bureau Federation 2343 Rose Street Enforcement Honolulu, HI, 96819 Pesticides Specialist (808)848-2074 Hawaii Dept. of Agriculture - Pesticides http://www.hfbf.org/ 1428 South King Street Honolulu, Hawaii, 96814 Market development (808)973-9401 Market Development Branch http://hawaii.gov/hdoa/pi/pest State of Hawaii Department of Agriculture 1428 South King Street Professional organizations Honolulu, HI, 96814 Hawaii Farm Bureau Federation (808)973-9591 2343 Rose Street http://hawaii.gov/hdoa/add/?searchterm=mar Honolulu, HI, 96819 ket%20development (808)848-2074 http://www.hfbf.org/
90 Oahu RC&D Agribusiness Training Series
Hawaii Department of Agriculture’s list on Soil testing organizations: UHM-CTAHR, Agricultural Diagnostics http://hawaii.gov/hdoa/add/products- Service Center database 1910 East-West Rd., Sherman Lab 134 Honolulu, HI 96822 Rainwater catchment (808)956-6706 UHM-CTAHR, Rainwater catchment http://www2.ctahr.hawaii.edu/adsc/ program Cooperative Extension Service Statistics 875 Komohana Street Annual, monthly data Hilo, HI 96720 National Agricultural Statistics Service (808)981-5199 1428 South King Street http://www.HawaiiRain.org/ Honolulu, Hawaii, 96814 (808)973-9588 Seeds http://www.nass.usda.gov/hi/stats/t_of_c.ht UHM-CTAHR, Seed Program m 1910 East-West Rd Sherman Lab 108 Honolulu, HI 96822 Weekly wholesale prices and barge arrivals (808)956-7890 Hawaii Market News Service http://www.ctahr.hawaii.edu/seed/ 1428 South King Street Honolulu, Hawaii, 96814 Sustainable agriculture (808)973-9745 UHM-CTAHR, Natural Resources and http://hawaii.gov/hdoa/add/man Environmental Management 1910 East-West Rd., Sherman Lab 101 Prepared by: Honolulu, HI 96822 James R. Hollyer, Program Manager (808)956-7530 CTAHR, ADAP Project http://www.ctahr.hawaii.edu/sustainag/ University of Hawai‘i
With help from and thanks to Matthew Loke (HDOA), Jason Shitanishi (FSA), and Miles Hakoda (CTAHR).
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