Instructional Plan
Instructor:
Unit: High Tunnel Fruit and Vegetable Production
Fruit and Vegetable Production Competencies #1-3:
 Explain the importance of financial planning in fruit and vegetable production.
 Describe approaches for the marketing of fresh fruits and vegetables.
 Classify characteristics of selecting and planning for fruit and vegetable production.
Competencies:
Lesson Title: High Tunnel Business Planning and Marketing
Estimated Time: 2 to 3 50-minute Class Periods
Objectives/Study Questions
At the conclusion of this lesson, students will be able to:
 Identify the key components of a complete business plan.
 Develop strategies for business and marketing planning.
 Recognize the most ideal methods of organizing and marketing a high tunnel operation based on your
individual situation.
Materials, Supplies, Equipment, References, and Other Resources:
Materials/Supplies/Equipment:
 PowerPoint Presentation – “L10: High Tunnel Business Planning and Marketing”
 Chalk Board/White Board
 Flip Charts (And tape for hanging on walls if necessary)
 Markers
References and Other Resources:
 Hendrickson, M., & Jett, L.W. Reviewed by Trinklein, D. (2010). Marketing Vegetables in Missouri.
(Publication G6221). For sale from University of Missouri Extension. Download for free at
http://extension.missouri.edu/p/G6221.
 High Tunnel Manual
 Hightunnels.org - http://www.hightunnels.org/foreducators.htm
Interest Approach (Motivation):
SLIDE 1
Brainstorming Activity
You’ve learned a great deal in the last few lessons about growing produce in a high tunnel and making it a
successful venture. You know all there is to know about growing fruits and vegetables, but does that make it
truly successful? What’s the missing ingredient? (A: Marketing/Selling Produce and Making a Profit)
Imagine we are planning our own high tunnel business, but haven’t made any decisions about it yet. In groups of
three or four, come up with a list of questions or ideas we need to made decisions or find answers to before we
can begin a real high tunnel enterprise. EVERYONE in the group needs to write down these questions and ideas.
Think of as many things for this list as you possibly can. If you were really planning a business, you would want
to have as many answers and as much direction as possible, right?
When you hear STOP, quit adding to your list and find one or two other people that were not in your original
group. When you hear GO, begin sharing the ideas and questions you came up with. If someone mentions
something that was on your list, put a star by it or circle it. When you hear STOP for the second time, head back
to your original seat.
(After students have returned to their original seats, have them share aloud the items on their list that were
mentioned more than once during their sharing activity. Make a list of these questions and ideas on flip chart
paper. Post these pages around the room for reference throughout the lesson.)
Communicate Objectives, Define Problem or Decision to be Made, or Identify Questions to Investigate:
SLIDE 2
Now that you are thinking about the business of growing in a high tunnel, lets learn some more detail about
developing your high tunnel enterprise into a successful business with a plan and a marketing strategy.
Our objectives for this lesson are:
 Identify the key components of a complete business plan.
 Develop strategies for business and marketing planning.
 Recognize the most ideal methods of organizing and marketing a high tunnel operation based on your
individual situation.
Instructor Directions / Materials
Introduction
SLIDE 3
Content Outline, Instructional Procedures, and/or Key Questions
There is more to starting a high tunnel project than coming up with the idea
and jumping into the project feet first. Often, the success of a new venture,
like a high tunnel project, is predetermined before the project is ever started.
Careful and thoughtful planning lay the essential groundwork needed to give
your new project, a business venture, a reasonable chance of succeeding.
Planning the business is divided into several steps essential to successful
Objective One
Identify the key components of a business planning. Each step must be thoughtfully examined, and adequate
resources of time and money need to be allocated to develop each step:
complete business plan.
1) Idea
2) Organization
3) Feasibility
4) Planning
5) Capital
SLIDE 4
6) Marketing
Idea
Objectives Two and Three
SLIDE 5
SLIDE 6
Each of these steps will be discussed in greater detail. Be sure to pay careful
attention to the business planning process, as it will be very important as
you start your final project for this unit!
Idea
 First, you should ask the question, is the high tunnel production
operation really worth the effort necessary to turn it into an
enterprise? This answer must be determined.
- If you can’t figure out how to make a profit, getting started in the
first place is not worth the effort!
- The answer to whether or not the operation is really worth the
effort depends on the level of basic knowledge about the
business and the ability to turn that knowledge into a profitable
business venture.
 If viewed purely as a business venture
- Critical to do an early and accurate self-assessment of the
business climate for high-tunnel production in your area
- Important step in building confidence and knowledge of the
enterprise and will be critical in securing business partners,
financing and even customers
 Take the time to build a strong understanding of high-tunnel fruit
and vegetable production at this stage
- Provides some of the most affordable risk management available
Instructor Directions / Materials
Organization
Objectives Two and Three
SLIDE 7
SLIDE 8
Content Outline, Instructional Procedures, and/or Key Questions
- Detailed business plans and marketing strategies will come later
- This process is designed to simply improve your basic
understanding of high-tunnel production and management.
- Imagine that you are in the “Idea” stage of developing your own
high-tunnel fruit and vegetable production enterprise. The past
few weeks of this unit have been this process of understanding
production and management. If you were developing your
business plan, you’re now ready to move onto the next stage!
Organization
 Determining the organization’s structure is one of the most important
decisions that can be made in setting up a new business venture
 Choice can be a wise move or a costly mistake with regard to taxes
paid, protection from liability and the amount of flexibility in
running the operation.
 If setting up a legal business, the initial choice of a business
structure, even if it achieves optimum results in the start-up phase,
may require adjustment or alteration as the business matures.
- Important to periodically re-examine the appropriateness of the
type selected.
 Most common types of formal business structures are:
- Sole Proprietorship
- Cooperative
- General Partnership
- Limited Partnership
- Limited Liability Partnership
- Limited Liability Company
- Corporations
 The form of organization selected depends on the following factors:
- Capital structure
- Tax considerations
- Management method
- Risk management/Liability
- Number of people associated in the venture
- Kind of business or operation
- Cost and formality of the organization
- Ability and/or desire of owners to isolate personal assets from
claims of the business’ creditors
- Perpetuation of the business
We’ll discuss sole proprietorships, cooperatives, and general partnerships in
more detail, because they are the most relevant for what you may encounter.
SLIDE 9
Sole Proprietorship
 Easiest and least costly way of starting a business
 Can be formed by finding a location and opening the door for
business
 Likely to be fees to obtain business name registration, certificate,
and other necessary licenses.
 Attorney’s fees for starting the business will be less than other forms
Instructor Directions / Materials
SLIDE 10
Content Outline, Instructional Procedures, and/or Key Questions
- Less preparation of documents required and the owner has
absolute authority over all business decisions.
Cooperative
 Belongs to the people who use it
 Member/owners use the cooperative as a source for the goods and
services they need
 Member/owners share in the control of the cooperative, meet at
regular intervals, review detailed reports and elect directors from
among themselves.
 Directors hire management to oversee the day-to-day affairs in a way
that serves the members’ interests
General Partnership
 Can form simply by an oral agreement between two or more persons
 Though not required, a legal partnership agreement drawn up by an
attorney is highly recommended
SLIDE 11
- Legal fees are a bit higher than those for a sole proprietorship
- Partnership agreement could be helpful in solving disputes
- Partners are responsible for the other partner’s business actions,
as well as their own
Feasibility
Feasibility
 A feasibility study, can take on many shapes and sizes and is often
confused with a ‘business plan’
Objectives Two and Three
 Various components are common to both the feasibility study and
the business plan, but not all information developed in the feasibility
review will be incorporated into a business plan and vice versa.
SLIDE 12
 Feasibility studies offer a reality check on merit of a business idea.
- The feasibility review of an individual enterprise such as a high
A feasibility study could serve as a
tunnel will differ greatly from a feasibility study for a large startvery valuable learning opportunity
up production facility.
for students. See page 90 of the
- To accurately evaluate the validity of an enterprise, take steps to
High Tunnel Manual for ideas on
remove personal emotion from the evaluation process.
additional projects or assignments
- It is wise to utilize and/or engage an independent third party to
involving a feasibility study that
help with the process, which might best be described as “getting
could be utilized.
a second opinion.”


SLIDE 13

In the process of a feasibility study, an exhaustive set of questions
should be developed to help validate the core business principles
behind utilizing a high tunnel for fruit and vegetable production.
The process should identify opportunities, unexpected hurdles and
other impacts that might be encountered. A typical feasibility review
will look at five areas of impact:
1) Local Impact
2) Market
3) Technical Resources
4) Financial Projections
5) Management
Let’s look at some examples of questions that should be asked for
each category.
Instructor Directions / Materials
Content Outline, Instructional Procedures, and/or Key Questions
Local Impact
 Are adequate local resources available to support a high tunnel
business, including production specialists, equipment suppliers,
wholesalers, etc?
 Will there be negative impact or resistance to a high tunnel
operation?
SLIDE 14
Market
 Is there a clearly identifiable and measurable market(s) that helps
identify what to grow, how much to raise, where to sell, at what
prices, etc?
 Will the location of the business appropriately serve the market?
 How far and how often will you have to travel?
 What are the transaction costs?
Technical Resources
 Is there access to quality equipment and service to address the
unique growing environment created by high tunnels?
 Can the infrastructure needs be met, including adequate site location,
easy access, amble water, ventilation, etc.
SLIDE 15
Financial Projections
 Do market projections and production assumptions match, and at a
profitable level?
 Are adequate resources available to operate in both good and bad
business climates?
 Can all potential costs be identified through detailed production
budgets?
Management
 Is there enough experience to manage the operation?
 Are all area of the operation adequately covered?
SLIDE 16
- Managers don’t always make good growers and growers don’t
always make good marketers.
 Are adequate support services available to assist management?
Planning
Planning
 In the planning process it is important to develop a written
business/operating plan for the enterprise with all the details of
Objectives Two and Three
operating and managing the high tunnel project.
 Having a well-written document provides many benefits from
helping to secure financing to providing a road map.
- Numerous books online tools are available to simplify the
SLIDE 17
process of writing and organizing a business plan.
 No matter what format process you use, a good business or
Incorporating business plan
enterprise plan should, at a minimum, do the following:
development into the course
- Adequately describe business, its structure, its products & goals.
curriculum as an assignment could
- Explain the roles and responsibilities of all involved.
serve as an excellent opportunity
- Outline the marketing plan and strategies to remain relevant.
for students.
- Illustrate the financial plan, including the assumptions and goals
used to reach profitability.
Instructor Directions / Materials
Capital
Objectives Two and Three
SLIDE 18
SLIDE 19
Marketing
Objectives Two and Three
SLIDE 20
Content Outline, Instructional Procedures, and/or Key Questions
Capital
 The search for financing is similar to any other aspect of your
business; it takes time & effort to research the sources right for you.
 Begin by examining your needs, planning how the funding will be
utilized and studying what is available.
 The ability to secure sufficient funds to start and grow your
enterprise depends largely on your preparation and demonstrated
capacity to manage those funds efficiently and effectively.
- While poor management is cited most frequently as the catalyst
for business failures, inadequate or ill-timed financing is a close
second.
- It is simply not enough to have sufficient financing. You need to
have the knowledge and planning ability to manage it well.
 That means avoiding such common mistakes as securing the
wrong type of financing, overestimating or underestimating
the amount required or the cost of borrowing money, and
then finding it difficult to repay.
 If financing is required, check for local funding first.
- Many rural development groups have established modest
revolving loan funds or small grant programs to encourage local
businesses.
- Local lenders are frequently very aggressive in helping with
business startups within their lending territories.
- Some level of local participation is frequently a requirement for
state and federal grant and guaranteed lending programs.
 When exploring options for the capital needed to construct a high
tunnel, don’t limit the search. This means don’t limit yourself to only
looking for funding from a particular entity. Explore every option.
Marketing
 Marketing is a “first, last and always” consideration.
 Before production starts, make sure a market has been established.
- Too many businesses discover too late that the world will not
necessarily beat a path to their door just because they offer a
better mousetrap.
 Although the product may be the best on the market, a good
marketing program is essential for a business venture to realize its
fullest potential and profit.
- The best strategy will yield whatever level of sales it takes to
make a business profitable.
- The best for any business venture calls for a thorough
understanding of the needs of the potential buyers and for the
business’ ability to differentiate and diversify as markets change.
 When developing a marketing strategy, the strategy should
capitalize on one or more of the benefits that high tunnels offer over
traditional production methods. Some of those benefits include:
- First to market - This advantage disappears quickly, and along
with it, any premiums that a customer is willing to pay.
- Multiple crops - A well managed production schedule can
benefit from multiple crops.
Instructor Directions / Materials
SLIDE 21
Content Outline, Instructional Procedures, and/or Key Questions
- Quality - Well-managed high tunnels should have less
disease issues to deal with, resulting in more uniform and
appealing products.
- Unique crop - High tunnels provide an opportunity to
produce niche crops that do not grow well using traditional
production methods. The flip side of this is the products may not
be as common and therefore demand may be less.
- Scalability - High tunnels provide risk management for
customers who demand consistent and predictable volumes and
quality.

SLIDE 22


Many attempting to start a business fail to recognize is that customer
‘needs’ change.
- It is critical to have a marketing plan that is adaptable to those
changing needs. Sometimes they are over a period of years,
sometimes during the season or even week to week.
Changes to a marketing plan need to be done systematically to avoid
negatively impacting the business’ ability to remain profitable.
A good marketing plan has an ongoing evaluation process that will
include the following components:
- Identification - Methods should be established to constantly
scan the marketplace for areas of threat or opportunity.
- Analysis - Marketing priorities are set based on ‘potential’
customer demands. Priorities can be established by asking six
questions:
1)
2)
3)
4)
SLIDE 23
SLIDE 24
How quickly will the marketing opportunity/threat develop?
How will it impact our products and operations?
How likely is it that it will become of major importance?
How would our investors expect us to act in relation to this
marketing opportunity/threat?
5) What is our ability to react to this opportunity/threat?
6) What are the costs of not reacting to it?
 Obviously, those opportunities/threats with the greatest
bottom-line impact need to be addressed within the
overall marketing plan as quickly as possible. This is
extremely challenging in a high tunnel production system
when changes can often only be made once a season.
 High tunnel production does allow an opportunity to get
product to market slightly earlier and longer than
traditional producers. Developing a production schedule
that maximizes these advantages will be critical to
maximizing profitability.
Strategy - Develop a written strategy to address changes in the
market place that directly impact or change the original plan.
Action - Marketing activities are a synchronized and integrated
response to the nature of the marketplace. A marketing campaign
constantly coordinates all available business capabilities. Some
marketing activities might be short-lived while others might
carry on over a longer period. But it is always advisable to have
Instructor Directions / Materials
SLIDE 25
SLIDE 26
SLIDE 27
Content Outline, Instructional Procedures, and/or Key Questions
more than one market outlet or one market strategy.
- Evaluation - Regularly monitor and measure any changes to the
original marketing strategy to evaluate the impact of those
changes on profitability.
Market Diversity
 The marketing strategy in any business should not be highly
dependent on one venue or one market outlet, and when possible, not
on one product.
 Any number of factors including customer needs, product quality or
even inventory can change the market dynamics. Being able to
quickly shift product from one market channel or venue to another
can make the difference between profit and loss.
 Developing and participating in multiple markets provides
significant risk management as well as market research. The
challenge is to select and exploit the market channel that best fits
your high tunnel production and profit goals.
 Participate in other markets to the extent that those markets offer you
benefit through additional income, added risk management,
inventory reduction, market knowledge or relationship building.
 Considering a variety of marketing strategies and outlets is key to
ensuring the right option is selected for the high tunnel operation.
 Many market outlets are available to growers including, but not
limited to:
- Farmers Markets—Often communities, counties, and even
neighboring counties can offer a multitude of markets through
which to market produce. Farmers markets are well suited for
small, individual lots of mixed produce items. Often, farmers
markets are relatively easy markets to access and do not require
a significant amount of start-up capital. A rental fee may be
required to sell at the market. To find a farmers market in your
area and the guidelines for marketing, consult the Missouri
Farmers Market Association.
-
“U-Pick” (Pick-Your-Own) Sales—This is a popular marketing
method for vegetables such as asparagus, green beans, peas,
sweet corn, pumpkins and tomatoes. U-pick marketing of
vegetables is not capital-intensive and works well for perishable
vegetables. Often to be safe, accident liability insurance may be
required. A challenge to this method is coordinating harvest
frequency with customer volume. Advertising will be essential
to maintaining a steady flow of customers.
-
On-Farm or Roadside Markets—This method works
particularly well in areas with high traffic volume. Generally this
form of marketing is not capital intensive and is easy to access.
Labor is required to operate the stand through the season, and
packaging and grading are stricter than at a farmers market.
Rules and regulations such as health permits, weights and
measures standards, parking, sales taxes, handicap access and
sanitation must be considered before starting the market.
Instructor Directions / Materials
Content Outline, Instructional Procedures, and/or Key Questions
-
Wholesale Produce Auctions—Missouri has nine wholesale
produce markets. The auction has shareholders, usually growers,
who provide startup capital for the auction. The auction is
designed for wholesale marketing, but small lots of produce
items are sold at retail prices in a separate section of the auction.
Most buyers are purchasing for small supermarkets, roadside
stands or restaurants. A commission of 8-12 % is deducted from
the sale price of each lot to fund operations costs of the auction.
-
Restaurant and Institutional Sales—Selling to chefs and
institutional services can help growers diversify their markets.
The most likely market targets are independently owned and
operated restaurants that change menus frequently. Lower-priced
or high-volume restaurants can also be potential clients,
particularly for highly perishable items that suffer from long
shipping distances. Another potential marketing outlet is
institutional food services, such as campus dining, elementary
and secondary school cafeterias, hospitals and nursing homes.
-
Marketing Cooperatives—Growers in a region who produce
similar types of vegetables or use similar growing practices, such
as organic, may consider coming together to form a cooperative.
The cooperative structure enables growers to sequence their
planning to maintain a steady supply of produce for each market.
The cooperative can purchase input items in bulk quantities,
resulting in significant price reductions. Labor and equipment
for planting and harvesting can be pooled and shared among
members of the cooperative. A marketing agreement among
members that specifies the type and volume of vegetables sold
by each member must be implemented.
-
Supermarket Sales—Regional wholesale marketing of
vegetables to chain or independent supermarkets is a viable
marketing outlet for both large– and small-scale vegetable
producers. Many consumers are requesting that their local stores
buy locally grown produce. To evaluate this market outlet,
identify all food retailers in your area and visit or call each store
to establish a relationship and determine if they are interested in
purchasing locally grown produce. Harvest scheduling is crucial
for marketing to supermarkets, since produce cannot be
delivered to market every day.
-
Community-Supported Agriculture—CSAs are typically
community farms, where consumers interested in healthy, safe
food join in an economic partnership with growers seeking
stable markets. Consumers usually pay in advance for a whole
season of produce through a membership fee that depends on the
size of the share. CSAs in general have medium to high
marketing costs but can help stabilize farm incomes, minimize
risk from specific crop failures, and provide outlets for extra
produce. CSAs are almost always used in conjunction with
wholesale or farmers market outlets to diversify funding sources.
SLIDE 28
SLIDE 29
Instructor Directions / Materials
Content Outline, Instructional Procedures, and/or Key Questions
-
SLIDE 30
Closure/Summary:
Donations—If the high tunnel enterprise is designed primarily
or in part for educational purposes, if a market for the produce
grown in a high tunnel cannot be established, or excess produce
remains after marketing, donating the fruits and vegetables may
be an option. Community food pantries, churches, and families
in need may all be sources for donating the excess food from a
high tunnel project.
Pricing
 Setting price is a crucial component of successful marketing.
 Although the producer can set the price, the consumer controls the
price. To that end, producers have two principles of business
management they must have complete control and knowledge of:
1) What is your total cost of production?
2) What is the competitor’s price?
 Understanding these two components provides the ability to
effectively analyze a marketing strategy and also to make sound
business decisions regarding future production.
 The closer a grower is to the consumer, the more control over price
they grower has. Before setting price, gauge the level of competition
and the consumer demand for your product.
 The most direct method of setting price is relative pricing.
- Relative pricing involves acquiring price information from
competitors and setting your price relative to that level.
 Cost-oriented pricing is the best method for setting price for
vegetables. With cost-oriented pricing, the grower needs to know
costs of production. When growers know both the fixed and variable
costs of producing their vegetables, they are able to determine the
break-even price.
At the beginning of this lesson, we spent a considerable amount of time
coming up with ideas and questions that would need to be answered or
decided before starting a high tunnel enterprise.
Use the questions and ideas written
on the flip chart paper from the
Let’s look at those questions and ideas again and see how we did at
interest approach to review the
addressing them. (Ask students the questions they came up with themselves
lesson’s content.
to review the content discussed in the lesson.)
Application and Evaluation:
Did we discuss anything in this lesson that we didn’t think of when writing
our lists? (If so, review this content.)
The evaluation for this lesson will be the evaluation for the entire High
Tunnel Fruit and Vegetable Production Unit.
See the Unit Evaluation Plan.