MEATing a Need – Resource kit available for those exploring meat processing business

By Joy Bauman

beef carcasses

A team of Ohio State business and meat science specialists have compiled a Meat Processing Business Tool Kit for people who are exploring the meat processing business. Designed as a decision-making aid for people exploring investing in or expanding a meat processing facility, this online tool kit can help entrepreneurs evaluate the business and navigate business planning. The Meat Processing Business Tool Kit is available in the Business section at the OSU South Centers webpage and at the OSU Extension Meat Science webpage.

With the COVID-19 pandemic, consumers saw shortages of meat in large supermarkets caused by disruptions in large packing plant operations. “As a result, consumers started shopping at smaller, local meat shops, that didn’t have shortages of meat,” explained Lynn Knipe, PhD, associate professor of food science and technology at Ohio State who worked with the team to develop the meat processing business tool kit. “This, in turn, increased business for the smaller meat processors to a point that people who were used to taking animals to their local slaughterhouse, had to schedule their animals much farther out than normal,” Knipe said.

Knipe explained that entrepreneurial people who either raised livestock or had some past experience with slaughter or cutting of meat, have decided to consider opening their own meat businesses. Knipe and his colleague, Lyda Garcia, PhD, assistant professor of animal science began receiving more calls than usual, with people finding them either through their Extension Meat Science website or by referral from meat inspection people they had contacted.

Likewise, many of the same people were reaching out for guidance from the business development specialists at OSU South Centers and the specialists at the CFAES Center for Cooperatives, which is also based at the OSU South Centers. While gathering information to assist clients in summer 2020, the Center for Cooperatives team members reached out to OSU Extension meat science specialists Knipe and

Garcia. Soon, a working group was formed with team members from the CFAES Center for Cooperatives, the Small Business Development Center at OSU South Centers, the Extension Meat Science Program, and the OSU Department of Agricultural, Environmental, and Development Economics.  Together, the group developed and compiled resources to help guide entrepreneurs interested in the meat processing business.

“It only made sense that we work together as Ohio State colleagues to better serve our clientele,” said Garcia. “Instead of individuals contacting one OSU source and getting a bit of information and then needing to contact another OSU source for more information, we can all point them toward this fantastic online resource that will help answer their questions and guide them in the decision-making process,” Garcia explained.

On the webpage housing the tool kit, users will find information to help get started, including understanding the capacity for such a business, maps of federal and state inspection facilities and auction sites, as well as livestock inventory. To aid in decision making regarding business models, there are samples of cooperative and corporate business models, with business planning templates, financial worksheets, and information about funding sources. Contacts are also listed for those using the tool kit and seeking additional assistance with their business planning.

“The materials lead entrepreneurs to investigate critical considerations during the planning process, including collecting livestock data, gathering financial information, financial modeling, and business planning. That means that the tools are adaptable and intended to be changed to the user’s unique circumstance,” said Ryan Kline, Cooperative Program Specialist for the CFAES Center for Cooperatives.

A business plan is helpful as a decision-making tool for entrepreneurs and it becomes a tool they can use when talking to potential lenders, investors, or future key employees. CFAES Center for Cooperatives program manager Hannah Scott explained, “In our experience, entrepreneurs don’t usually look forward to business planning, but many of them are already going through the business planning process mentally as they consider a new business or ways to expand their current operation. We encourage entrepreneurs to write down their plans – and to use tools and coaching that can help them approach the process in a systematic way without being overwhelming – because it can help them identify potential issues and consider topics they might not have before.”

“There is lots of assistance for entrepreneurs going through the business planning process, from templates like the ones in this tool kit to assistance from business development specialists like our team at the CFAES Center for Cooperatives or the OSU South Centers Business Development Network, which houses a multi-county Small Business Development Center (SBDC),” Scott said. The SBDC program is a nationwide network of business development specialists who provide no-cost business consulting for entrepreneurs. Readers can locate their nearest SBDC here.

“We hope that the tool will be intuitive as entrepreneurs move through the planning process,” Kline said. “When visiting the website, people will find a self-guided and self-paced exploration of Meat Processing that we hope will help anyone interested in starting a meat processing facility.”

To find the Meat Processing Business Tool Kit online, visit: southcenters.osu.edu/meat-processing-business-toolkit or meatsci.osu.edu/programs/meat-processing-business-toolkit.

Cooperatives Eligible to Receive COVID-19 Assistance

 

Cooperative businesses experiencing financial issues due to the COVID-19 pandemic are eligible to receive assistance through two major programs of the U.S. Small Business Administration, the Payroll Protection Program and the Economic Injury Disaster Loan program.

Payroll Protection Program

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created the Payroll Protection Program (PPP), providing $349 billion for small business loans for qualified payroll costs, rent, utilities, and interest on mortgages and other debt obligations. PPP loan amounts are forgivable as long as:

  • Loan proceeds are used to cover payroll costs and most mortgage interest, rent, and utility costs over the 8-week period after the loan is made; and
  • Employee and compensation levels are maintained.

The National Council of Farmer Cooperatives (NCFC) and National Cooperative Business Association (NCBA CLUSA) have shared that cooperative businesses in agriculture, purchasing, consumer food, and worker cooperatives that meet the size criteria, generally with fewer than 500 employees, are eligible for this program based on the interim rule and Department guidance.

Applicants can apply to the PPP through eligible Small Business Administration lenders beginning Friday, April 3, 2020. Applicants will be required to submit an application and payroll documentation. To find an eligible SBA lending institution, tap or click here.

For a factsheet about the PPP, including information about loan terms, interest rates, and repayment periods, tap or click here.

Economic Injury Disaster Loans

The Small Business Administration’s Economic Injury Disaster Loan (EIDL) program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing due to COVID-19.

In response to the COVID-19 pandemic, small businesses in all 50 states and Washington, D.C. are eligible to apply for an EIDL advance of up to $10,000 for businesses that are currently experiencing a temporary loss of revenue. This loan advance does not have to be repaid and will be made available within three days of a successful application, even if the loan is not approved or if it is approved and not taken.

Cooperative businesses with fewer than 500 employees are eligible for the EIDL program.

To learn more about the EIDL program, including information about interest rates, loan terms, use of loan funds, and the application process tap or click here. Applicants to the EIDL program can apply directly to the SBA.

To learn more about applying to the EIDL program as a cooperative business, watch this webinar, “Demystifying SBA’s Economic Injury Disaster Loans,” hosted by the National Cooperative Business Association (NCBA CLUSA).

Cooperate with the CFAES Center for Cooperatives

  • Visit us online at go.osu.edu/cooperatives
  • Follow us on Twitter @OSUCooperatives
  • Like us on Facebook @OhioStateCooperatives

Learn more about the Mid America Cooperative Council