Innovative Revenue Streams for Farmers' Markets The Secret to Farmers' Market Financial Sustainability

Transcription

1 Innovative Revenue Streams for Farmers' Markets The Secret to Farmers' Market Financial Sustainability

2 Foreword A Value-Based Approach People come to be involved in farmers markets through their shared values around community engagement, entrepreneurship, local agriculture and healthy families. Remember that those very values are also what brings our customers to our markets. When promoting farmers' markets, these values should be at the forefront. With this in mind, let us introduce value-based marketing as an excellent model for farmers markets. The value-based model of marketing has been wholeheartedly embraced by Farmers' Markets of Nova Scotia (FMNS). Our understanding of value-based marketing began from Simon Sinek s book entitled "Start With Why" and his video that we suggest you start with as well: We also recommend Tad Hargrave s work. His mission is to help conscious, green and local businesses grow, and much of his material is well-suited to the farmers' market sector: Our own Director of Training, Michelle Wolf, is now offering a farmers' market home-study course for vendors through her website as well as a blog on business and entrepreneurship topics: Value-based marketing for farmers' market-based businesses is covered within the home study course. Revenue Streams Certainly we can all agree that farmers markets are home to businesses. We tend to call those businesses vendors and we pride ourselves as we should on serving those vendors to the very best of our ability as a farmers market. We need to also understand that farmers' markets

3 themselves are also businesses. Your market may well be a non-profit, a cooperative or a community project but your mindset needs to be that your farmers market is also a business, or a social enterprise. Regardless of your structure, understanding and operating your farmers markets as businesses - using business best practices and business financial planning - is a key to your sustainability and long-term success. Successful businesses generate revenue from multiple streams and farmers markets should be no different. The following is a list of proven revenue streams for your market to consider. One size does not fit all so look at your market and its community assets and challenges to find the best-suited ideas for your particular market. While this list is thorough, it is by no means exhaustive, so continue to look creatively at revenue sources for your market and tell us if you come across a great one that isn't on our list! Vendor Membership and Table Fees For the majority of Nova Scotia farmers markets, vendor membership and table fees are their primary source of revenue and, in many cases, the sole source. Although table fees and vendor memberships are a core component of a market s revenue, this stream alone is not enough to run a sustainable farmers market. In fact, markets across the province would do well to anticipate 50-60% of their revenue coming from vendor fees and then ensure they have a plan in place to derive the remaining 40-50% from other revenue sources. Table fees across the province range anywhere from $10 to $70. Vendors often don't see or understand the huge behind-the-scenes work individuals are doing to prepare, plan, and execute market-day activities. A vendor may pay their table fee and simply show up to sell but, in fact, a tremendous organizational effort must go on first to make that happen. Table fees should represent a portion of all of that effort and the benefits that the market is able to provide each vendor as a result of that effort. Clearly communicating this with vendors so that they willingly assign a monetary value to that work is part of a market management team's responsibilities. A farmers market with a full-time Market Manager and a reasonable marketing budget is a tremendous asset to all those involved in the market. (Small markets may only require a hour/week manager, but a fulltime staff position has proven to be the key to recruiting and retaining the

4 most skilled and committed staff, so growing your market to the 30+ vendor size, which justifies a full-time manager, should be a strategic planning goal for small markets.) Typically markets with higher table fees are actively promoting their market as well as the products their vendors offer. Markets with higher table fees usually have a paid market manager, facilitate community outreach and host special events, all of which contribute to the success and value of the market, which ultimately fosters better sales for vendors. So ensure your table fees and vendor membership fees cover the cost of the services your market is providing to your vendors and be sure your vendors understand what those costs are and the value the market provides! Don't under-price what you do with too-low vendor fees. Nobody wins when there is no money for a paid organizer or to do promotions and outreach. Thinking small results in small returns for everyone. Sponsors Sponsors are cash or in-kind donors that help cover market costs or contribute to a particular project or event of the market. Sponsorships are a great way to gain revenue as well as increase exposure to your farmers market within the community at large. When seeking sponsorships, remember to communicate and demonstrate how the market s interests and values fit with the potential sponsor s mission this is the key when convincing a sponsor that partnering with the market is a worthwhile investment. Keep in mind that a market s customer base is desirable to businesses and organizations who have a compatible mission with your market. Markets have strong community ties and a broad reach and other groups know this and want to align themselves with that capacity. The following are a few tips for aligning with sponsors: When considering a business or organization for a sponsorship opportunity, keep in mind the following: Does the market s and potential sponsor s missions mesh well? If not, you may send confusing messages to your customers about who you are as a market and what you are trying to accomplish. What are your customers expectations? Most expect that the market be at the forefront of supporting the local economy so good sponsors also uphold that value. Be positive and direct, providing additional information whenever possible, whether it be through print or speech. Be sure to identify gaps you will fill in the partnership.

5 It is a good idea to develop a simple 10-slide PowerPoint that includes your markets history, your mission, what you do and your goals for the future. This tool will have multiple uses and will be ideal when meeting with potential community partners or sponsors. When meeting with smaller community groups and clubs, it is not always necessary to use a PowerPoint. Make sure to provide a snapshot of the market s mission and values, identify the shared goals between the market and the organization you are speaking with, and always emphasizing your deep community authenticity. This short presentation, if done with enthusiasm and professionalism, can be enough to build solid community relationships. Consider approaching local businesses and selling sponsorships for special events or annual celebrations hosted by your market (see section (c)). Sponsors may prefer to support specific events that draw a larger crowd rather than the market gernerally. Gain interest from sponsors by developing and selling a calendar that showcases these sponsorships. The calendars can be sold at the market (see section (f)) as a fundraising tool but will also generate money directly from sponsors. Demonstrate why potential sponsors should support your farmers market by using resources to back up your claims. For example, tell your potential sponsors the great news research proves that farmers market customers do additional shopping within the area because of the market! You can certainly make the case that your market will generate spin-off business and benefit other downtown merchants. Please see Appendix A: A Community Partnership Opportunity with the Kentville Farmers Market and Appendix D: Cultivating Community Economy - Farmers Markets of Nova Scotia Economic Impact Study. To add a personal touch and demonstrate authentic connections, provide short stories or geographic information about your market where your vendors come from, where your customers come from, etc. Offer different levels of sponsorship to accommodate all types of sponsors. For example, you can offer a silver sponsorship with a few benefits for a cost of $60, a gold sponsorship with additional benefits for a cost of $200 or a platinum sponsorship with extensive benefits for a cost of $500. For a more detailed example, please see Appendix A Offer unique incentives to your sponsors such as listing your sponsor s logo in a customer newsletter or featuring a promotional sponsor story, displaying sponsor business cards at your information booth, free tent space for one day per season for promotional purposes, attaching a permanent plaque to customer tables displaying the

6 sponsor s business, naming official event sponsors during radio, online and print advertising, and more. Attempt to have each seating table, music tent, and community nonprofit booth tent at the market labeled and paid for by a sponsor (a local business, a community group, or even an individual). This could be a long-term goal that the market strives toward. Approach businesses and/or your municipality to sponsor a farmers market tour. Municipal counsellors must attend a minimum number of community events and often have a slush fund designated for community spending so approach them directly for support. Implementing farmers market tours at your market is a great way to introduce community members to your market. If you target specific community groups (seniors, young mothers, an after-school program), you will attract current and new market-goers. For a detailed guide on how to create and implement farmers market tours, consider purchasing our resource, Implementing Farmers' Market Tours. If your market venue has a stage, have a local music store or festival sponsor your stage in exchange they could have a free booth at the market. Recognize your sponsors and remember that a simple thank-you goes a long way try handwritten personal thank you s (get your vendors to sign too!) Fundraising Fundraising ideas are limited only by your imagination. However, all too often fundraisers are actually more work than they are worth. You need to be clear on what the return on your investment of time, money and resources will be. A good place to start, as with all marketing, is to focus on your values. Emphasize fresh locally grown food, authentic connections with business owners and food producers, and supporting the local economy. Reach out to as many community partners and sponsors as possible (local restaurants, businesses, printing companies, supply manufacturers, ad agencies, media sponsors, etc.). Often businesses and other groups want to be connected or associated with farmers markets and may be willing to provide resources and support like taking on a fundraising project for you or volunteering their time. Whatever the fundraiser is, do all you can to inform your customer base with lots of advance notice because they can be your best ambassadors! Also, when promoting your fundraiser, start from the values your market stands for and advertise the fundraiser as an opportunity for your community to invest in those values. Don't forget to develop a

7 budget for your fundraiser at the beginning that accurately captures all your costs and income to ensure you raise a reasonable profit. Fundraisers that don't raise money are a waste of valuable time. The following are a few ideas for fundraising: Remember that people give to people personalize and be authentic when building community relationships. Consider hosting a large fundraiser once a year such as an annual Harvest Celebration in the fall. This is already done by a number of farmers' markets around Nova Scotia. Sell tickets to your vendors, local restaurants and businesses, local politicians and local media. Book local musicians, feed everyone beautiful local food, and hold a ticket auction or silent auction at the event to raise additional funds at the event. Tip: If you are a seasonal market, you may want to try holding an event during your off-season to remind people of the upcoming year, gain interest from new customers, and spread out your workload. Consider supporting and promoting a dinner tour featuring local restaurants (one local restaurant participating per month for example). The chefs can shop at the market for their menu items and prepare special farmers market dinners showcasing fresh, seasonal ingredients. Suggest that a minimum of 30% of the net profits go towards the farmers market. Develop a calendar showcasing your market as well as your key sponsors, to be sold at the market and other community locations. See section (b) iv, above. Offer Friends of the Market status to market patrons who fill in a form and make a certain donation to your market ($50 for example). For smaller anonymous donations, keep donation boxes at entrances, customer seating tables and other convenient locations throughout the market. As stated above, saying thank you to everyone involved in your fundraising is very important. Handwritten personal thank you s are small gestures that go a long way. Rental of Facilities An innovative source of revenue can be generated from renting your market facilities to other groups and organizations within the community for workshops, office space, special events, etc. Before renting your facility, it is

8 essential to know the cost of maintaining your building (power, water, insurance, etc.) to ensure that this is a viable option for your market. Once you have this information, you can price your rental accordingly. It is also important to consider whether there is a need in your community for a rental facility. When advertising the rental of your facilities, consider what makes your facility attractive to renters in some cases this may be your amenities (access to water, washrooms, etc.) or your community mindset. Be sure to emphasize accordingly. The Wolfville Farmers Market provides a great example of how these rentals can also serve market members they offer a 10% rental discount to a renter who uses one of the market vendors for catering services. They also offer their vendor members 20% off space rentals. Visit their website for more details: Kitchen Space The rental of kitchen space may also be an option for your market should you have such facilities. A certified kitchen space can be rented out to vendors or even community groups and is certainly a service to your vendors. As mentioned above, it is important to know the costs of maintaining your kitchen space before setting prices and renting, as well as knowing whether there is a need for such rental facilities in your area. General Store This is a small but very unique revenue stream that can provide several advantages. The General Store is essentially a farmers market booth operated by the market itself featuring local food products that are not currently available from vendors at your market. The market purchases these products at wholesale prices from local producers and sells them at a retail mark-up to create revenue for the market. The Kentville Farmers' Market operates a general store booth at their market each week, year round. Products sold at the general store are typically non-perishable (such as maple syrup, honey, jams, handmade soap, teas, wine) and also includes their own branded merchandise (grocery bags, bamboo pens, market postcards) so that their stock can be purchased in bulk and sold over time. A key advantage of this revenue stream is that it is also a service to your customers and can be used to round out your market's overall product mix. Over time, you may be able to encourage a vendor to join your market should sales of a certain product at the general store (such as honey or jam) be strong.

9 The general store booth is a natural place to sell farmers market promotional t-shirts, bags, aprons, and other merchandise. As a note, T- shirts and aprons designed by Farmers' Markets of Nova Scotia are available for markets to purchase and sell, with your market's logo can added optionally. In addition to generating a small amount of revenue, a general store can double as your Information or Customer Service Booth, promoting upcoming special events at the market, selling memberships, providing information to consumers, and attracting volunteers. The general store also provides an opportunity to sell market dollars or gift certificates as well as tickets for market gift basket draws and 50/50 tickets. In order for your general store to be successful, an employee or volunteer will be required to tend the booth, or a vendor could potentially partner with the market to help staff the general store booth as well their own booth. Grants To build sustainability, farmers' markets should seek to minimize the need for external funds and maximize the creation of internal revenue streams. However, grants can provide a valuable revenue source, and many grants (albeit usually small) are available to non-profit organizations through government, municipalities and community development funds. For example, RRFB will provide farmers' markets with grant money to cover the purchase of waste management bins. For an extensive listing of grant opportunities in Nova Scotia, please see Appendix B: FMNS's Funding Opportunities for Nova Scotia Farmers Markets. Grant applications are often time-consuming and almost always directed at projects (verses operations). Seek grants to carry out market projects but do not let grant opportunities dictate your projects! While you may come across a grant funding opportunity to run a children's program at your market, it does not mean your market should run a children's program. Given the current grant funding limitations, we do not recommend markets rely on grants as a core revenue stream. Community Memberships Some markets offer annual and lifetime community membership programs, which also provide benefits to their community members. These memberships typically provide some benefits or incentives (a free pin and

10 postcard for a $25 membership, a free bag for a $60 membership) but often it is the social capital that leads people to purchase such memberships. Consider benefits that relate to social capital such as a unique market bag for members (verses the market bag available for purchase by anyone) or an annual special event to thank members (just be sure the costs are not higher than the revenue of memberships!). These memberships can help develop a strong returning customer base for your market. The Port Hawkesbury Community Farmers' Market and the Kentville Farmers' Market have both sold community memberships. For an example of a community membership program in action, please see Appendix C: Friends of the Market Program. Food Hubs An up and coming revenue stream is the progression of farmers markets into food hubs. This would involve widening the market's mandate to become a food hub or becoming a community food centre, offering cooking classes, nutrition based programs and workshops, etc. The Wolfville Farmers' Market is currently stepping into their new identity as the Good Food Hub, based on the concept of community food centres. A quick Google search will provide a wealth of information and examples from all over North America on food hubs and on community food centres. Generally speaking, food hubs tend to focus on aggregating, value-adding and distributing local food while community food centres tend to focus on outreach, food skills and community programming. In many cases, Market Managers have become food hub or food centre coordinators, and this can even turn a part-time market manager position into a full-time job.

11 Appendices Appendix A: A Community Partnership Opportunity with the Kentville Farmers Market Appendix B: Funding Opportunities for Nova Scotia Farmers Markets Appendix C: Friends of the Market Program Appendix D: Cultivating Community Economy - Farmers Markets of Nova Scotia Economic Impact Study View all appendices at the following link: ADDITIONAL READINGS "New York Farmers Market Training Manual" This reading provides an extensive guide for managing various aspects of a farmers market including: market manager roles, budgeting, fundraising, vendor recruitment, building a farmers market community, connecting with municipality & business, friends of the market, connecting with customers through media, building systems for sustainable farmers markets, special event planning, marketing plans, measuring performance, and more. We suggest that you check it out! Available at: "Growing your Farmers Market" and "Promoting your Farmers Market" Increasing revenue involves bringing new customers to the market and this is where advertising, promotion and publicity come into play. Growing your Farmers Market (see pg. 49) and Promoting your Farmers Market (see pg. 9) will provide some insight on the most effective methods for advertising and promoting farmers markets. Available at:

12 Project for Public Spaces: Public Market Services Looking for innovative development ideas for your market? This webpage gives a fresh perspective from outside Nova Scotia. Available at: Farmers' Markets of Nova Scotia Cooperative Ltd., Box 33008, Halifax, NS, B3L 4T6 Phone: fmns@farmersmarketsnovascotia.ca Find us online at Facebook: Farmers' Markets of Nova Scotia