Everyone knows that a strong business plan is vital, but how do you make the best plan possible?
By understanding what your would-be customers really want, says Ran Goel, who learned this lesson when he founded Toronto’s Fresh City in 2011.
Four years as a Wall Street investment lawyer had made him sick of greed and eager to do good. His new goal was to revolutionize the way people eat.
However, his business plan was, pardon the pun, a little off the wall.
“The initial idea that really animated me was creating a College Pro Painters model for farmers,” the 35-year-old says with a laugh.
“And only a person who knows nothing about farmers could think that.”
The idea was to give students basic training on growing produce, and use something called SPIN (Small Plot INtensive) farming to turn urban yards into tiny market gardens.
“We quickly realized that’s not a viable model, and you can’t train people to farm in just a summer,” Goel says.
Fresh City survived that misstep and now delivers almost 4,000 orders to more than 1,500 customers a month. Annual revenues have surpassed the $1 million mark. However, its biggest asset is its loyal customer base: people eager to have their eating habits revolutionized.
Here’s why. These are busy urbanites who don’t have time for leisurely trips to the farmers market and either can’t find a community supported agriculture farm serving their neighbourhood or don’t find it convenient.
So they shop at the big chains — reluctantly. They know much of the organic produce comes from far, far away, and those nice “local” farmers featured in the posters above the produce bins run large operations.
“What we’re being sold is intimacy, small scale, and artisan, even though it comes from a large-scale farm or is created in an industrial plant,” says Goel.
“But that’s what people are seeking. So I kept coming back to this idea that if you could deliver that in a real way — as opposed to greenwashing or a marketing tactic — that would hopefully produce results.”
“Deliver” is a key word here. Right from the start, the business model included online shopping and home delivery.
“Part of our value proposition is convenience, offering home delivery and having a user-friendly website that adds value to the shopping experience,” he says.
“But the second part is trust. That means building relationships between the people making the food and the people eating the food.”
That’s why the College Pro idea was worth a try. Having young farmers growing food in yards across Toronto would have been a great way to build those relationships and promote Fresh City.
The first year was bumpy because of quality and consistency issues (a basic “bag” of seasonal produce costs $31 a week), but customers stuck with the company and were joined by others.
Fresh City had leased two acres of land near a subway station in Toronto’s Downsview neighbourhood, mostly so customers could visit and see how their food was grown. Its tours and educational events draw thousands annually.
Goel managed to get another four acres, and now Fresh City staff farm 60 percent of it with 18 “farmer members” working the remainder, trading their labour for rent-free plots.
It’s still a work in progress and needs to expand its revenue several fold before it can be declared a success, says Goel.
The company’s newest venture is an online grocery store offering its own produce and about 1,000 local and organic products ranging from baked goods and preserves to dairy alternatives and cleaning products.
“It’s hard to beat the existing players at their own game,” says Goel.
“They have huge supplier networks and all those bricks-and-mortar stores, but we think that trends toward organic and local food and the fact people are increasingly shopping online gives us an opportunity to change the way people eat.”
That may sound like an ideological crusade, but it actually started with Goel asking a simple question: ‘I’d like a better option. I wonder if others would, too?’
It’s a simple concept, but hugely powerful. And it can be applied in any farm business.
Would the people you rent land from like to know more about your farming practices and how you care for their land?
Are there things you could do that would make it easier to attract and keep employees, or build stronger relationships with your customers and suppliers?
A strong business plan is essential. The best ones offer people a compelling reason to do business with you.