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Missouri Department of Agriculture

Ag Business Development

Implementation

The following are some of the steps you need to take during the Implementation Phase:

Meet with lenders to share your business plan and discuss potential debt financing options. As stated above, most lenders will require that you must contribute at least 40% of the total project cost upfront before they will provide any debt financing. Lenders will want to see a complete business plan with all of potential risk factors identified.

Prepare prospectus, offering circular or other investment documents. The prospectus, also called an offering circular, provides prospective producer-members with the information they need to make an informed decision about investing in the new venture. It is critical that you hire experienced and qualified legal expertise to prepare your investment documents, as mistakes can be costly. Make sure the attorney you hire understands cooperative, corporation and securities laws and can ensure that all the necessary steps are completed before soliciting money from producers or other investors. You must make sure that your organizational documents allow for non-producer investment and that you comply with all state and federal securities laws in securing both producer and non-producer financial participation in your new venture.

Secure equity capital through producer members. Once your prospectus is completed, you will need to conduct meetings with prospective producer-members. At these meetings you will share your prospectus, provide an overview of the new venture, and answer any questions producers have in analyzing their decision to invest in the new venture. These meetings may be your one chance to convince other producers to invest in your project, so make sure these meetings are well-planned and that you are able to adequately answer the questions producer-members are likely to ask.

Secure equity capital through non-producer investors, if required. Your business plan and prospectus will specify your plans for securing equity from non-producer investors. Again, you must make sure that your organizational documents allow for non-producer investment and that you comply with all state and federal securities laws in securing both producer and non-producer financial participation in your new venture.

Secure debt. Once you have raised the required equity, you are ready to finalize your loan with the lender.

Begin construction or remodeling of facilities. Once you have received approval from your lender, you can begin construction or remodeling activities. To save valuable time, be sure to meet with engineering design and construction firms and bid out your design and construction projects so that you can begin construction activities soon after you secure the loan.

Hire additional staff members and develop a system for selecting, retaining and training people-human resources. Your board and new management team should hire additional employees and develop a system for appraising the performance of your staff.

Once you have implemented the immediate aspects of your business plan, you are ready to move to the Operations Phase and become a fully-functioning business.

The Ag Innovation Center staff is here to assist you in starting or expanding your agriculture-based business. Contact us today!