Steve Murray, Ph.D.
Business Analyst stevem@ext.msstate.edu
December 2002

Food & Fiber Center

Funded by legislature in 1974

Wholly owned by Extension - no formal teaching or research responsibilities

Enterprise & Community Resource
Development (E&CRD) program area

Mission
“. . .to improve the economic, social, and cultural well-being of all Mississippians, by providing research-based information and educational programs and applying appropriate technologies to issues and needs of the food and wood products manufacturing industries of the state .”

Multi-disciplinary Task Force
Industrial
Engineer
Economist
Management
Specialist
Business Analyst TASK FORCE Food Technologist
Marketing/Distribution
Specialist
Small Business Specialist
Program Assistant

Business Analysis

Existing business

New business

Types of business

Catfish processing

Feed mills

Wood treating

Manufacturers of fertilizer/soil amendments

Fruit/vegetable processing

Specialty foods

Referral

County extension offices

State economic development authority

General economic developers

Small business development centers

Initial client contacts

Site visit (preferred)

Campus visit by client

Other: phone, mail, etc.

Be sure to…….






Stress confidentiality
Be sensitive to the client’s position and needs
Remember: people usually don’t call us for advice on how to spend their profits
Remember that people need hope
Recognize that situations that appear shaky can recover
Numbers are important but they don’t convey everything.

Problems people have:

#1. No money

Dr. Canterbury says to Bronco Billy,
“Billy, I perceive you have the greatest problem known to man…..no money.”

We don’t have any loan or grant money
….
But we will try to tell you who does…

Information needed

Current financial statements

Historical sales and income data

Management information

Operational information

Expectations of the client

Suggestions for survival

Improved profits

Wisdom about all things agricultural

What do you bring to the table?

Accounting

Legal

Managerial

Technical

Computer/software knowledge

Problems:

Limited time and resources

Travel considerations

Pricing of your services

Suggestions

Take a camera

Take a laptop

Produce something written

Suggestions:

Collaborate with other Extension people

Market your program as providing services to agribusiness

About yourself……

What can you do in a limited amount of time?

What can you add that likely is the
“best” information?

What should you defer on?

Financial Statement Analysis

Income statement

Balance sheet

Cash flow statement

Additional Financial Documents

Inventory records
– Raw materials
– Finished products

Production records

Bills of materials
– Costed BOM
– Single and multi-level BOM

Inventory

How much raw material do you keep on hand?

How do you schedule your production

How many times a year do you turn your inventory?

Do you ever run out of raw material or finished goods?

Payroll

Are your payroll taxes current?

Who handles your payroll?

Do you assign payroll expenses to departments?

Production

Do you track your labor and material costs?

Do you use an ERP or MRP system to schedule your production?

Who schedules production

Creative Bakeries, Inc.
20 Passaic Avenue
Fairfield, NJ 07004
Creative Bakeries, Inc. offers a broad line of pastries, cakes, pies, cookies and other assorted desserts that are produced at its baking facility.
For the six months ended 6/30/02, net sales fell 23% to $1.5 million. Net loss from continuing operations fell 5% to $99 thousand. Results reflect decreased sales volume, offset by lower selling, general, and administrative expenses and a $40 thousand gain on the forgiveness of debt.

Creative Bakeries, Inc.
Income Statement
P eriod Ending:
Total Revenue
Cost Of Revenue
Gross Profit
30-Jun-02
$836,234
$620,365
$215,869
31-Mar-02 31-Dec-01
$619,422 $1,141,545
$586,451 $1,038,494
$32,971 $103,051
Operating Expenses
Research And Development
Selling General And Administrative Expenses
Non Recurring
Other Operating Expenses
Operating Income
Total Other Income And Expenses Net
Earnings Before Interest And Taxes
Interest Expense
Income Before Tax
Income Tax Expense
Equity Earnings Or Loss Unconsolidated
Subsidiary
Minority Interest
Net Income From Continuing Operations
N/A
$228,226
N/A
N/A
($12,357)
$35,730
$23,373
N/A
$23,373
N/A
N/A
N/A
$23,373
N/A
$155,252
N/A
N/A
($122,281)
N/A
($122,281)
N/A
($122,281)
N/A
N/A
N/A
($122,281)
N/A
$127,591
N/A
N/A
($24,540)
($73,512)
($98,052)
$1,772
($99,824)
N/A
N/A
N/A
($99,824)
Nonrecurring Events
Discontinued Operations
Extraordinary Items
Effect Of Accounting Changes
Other Items
Net Income
Preferred Stock And Other Adjustments
Net Income Applicable To Common
Shares
$450
N/A
N/A
N/A
$23,823
N/A
$23,823
$864
N/A
N/A
N/A
($121,417)
N/A
($121,417)
($36,869)
$108,470
N/A
N/A
($28,223)
N/A
($28,223)
30-Sep-01
$741,242
$696,008
$45,234
N/A
$194,203
N/A
N/A
($148,969)
($495,690)
($644,659)
$6,749
($651,408)
N/A
N/A
N/A
($651,408)
($9,342)
N/A
N/A
N/A
($660,750)
N/A
($660,750)

How are things changing?

Expectations of quick turnaround

Knowledge of some technology & software

A few real projects

Adding value to broiler litter

Catfish processing

Livestock sale barn

Freshwater prawns

Specialty foods

Poultry litter

Catfish processing

Cooperative Planned For…
Mize, MS

Freshwater prawns

Audiences

Entrepreneurs (ideas, start-ups)

Small businesses (all phases)

Large businesses (productivity, management issues)

Economic Developers (recruitment, planning)

University community

Focus Areas

Feasibility studies/economic analyses

Business/financial management

Quality assurance (SPC, HACCP)

E-business

Industry overviews

Green Industry Seminars

Catfish Processors Conference 2001
This year marked the 28 th Mississippi State University
Catfish Processors conference.

Hunt Construction Company
Ackerman, MS

Economic Impact of the Mississippi
Poultry Industry at the Year 2002

What is in the Report?
– Structural Evolution
– Economic Impact
– Broiler Production
– Size of the Industry
– Broiler Processing & Further
Processing
– Employment
– Egg Production
– Major Poultry Producing
Countries
– Poultry Exports from Mississippi
Ports

Mississippi Specialty Foods
A Taste of Mississippi’s Finest

Food & Fiber Center
Assisting Agribusiness Industries
In Mississippi By Providing
Educational, Technical and
Developmental Services