Farm-Produce Business:

Corporation Viability Analytics

The viability of a larger-than-small business Farm-Produce Business as conceptualized of the growth Vision of the aggregator- or founder- entrepreneur, is a critical consideration of the Business Development Planning of the Venture Startup Starting Phase in determining the rationale for further development of the Farm-Produce Business into a formal corporation that invariably thrusts the business into the Venture Startup Stage, but more specifically into the Starting Phase of that stage. The completion of the Business Growth Planning as captured in the Business Enterprise Redesign and the assets cost as reflected through the asset allocation by time-delays analyses of the Data Flow Diagram, empowers the Business Development Planning to take on the issue of viability prior to the execution of the plan through the Venture Startup Execution Phase. The goal here is to ascertain the founding vision of the founder-executive as having the potential for enabling Enduring Existence of the venture.

While the Viability Analytics embodies Break-Even Analysis, because production output is constrained, and the prices are constrained, the fixed cost must be designed, the evaluation of the viability as performed through the Viability Analytics is necessarily assessed from computational analysis of the abstract operation of the Farm-Produce Business in the context of integrated conditions combining the Break Even Analysis, the Sales Cycle Design, Sales and Business Forecast, and Sales Fulfillments and Invoicing as enabled by Production Capacity. The operating of the company in the abstract allows achieving the determination of the venture viability: Technology ( vis a vis Production means) Viability in terms of the available volume of produce in defining production volume for packaging Product-Offered; the Commercial Viability with respect to market size and production volume, and; Financial Viability based on the pricing policy supportable by the market relative to the volume of supply to the markets. So in one fell swoop, every aspect of the venture is evaluated ahead of the inception of the Execution Phase.

Generally, the performing of Viability Analytics takes different forms depending on the age and years of operation of the business being analyzed for viability. However in this special case of the Farm Produce Business, the Viability Analytics is the collection of data generated from the digital computational conduct of the Thought Experiment on the vision-guided operations of the business. The Experiment normally spans as many years as the time-to-maturity characteristic of the industry of the target venture, which fortunately for the Farm Produce Business is just three years. So the analysis will span three years of the Farm-Produce Business.

In principle, the entrepreneur is expected to perform this mental Thought Experiment over the years of the time-to-maturity of the business which varies with industry. Usually thought experiment of operating the company as per the vision of the operations in order to construct the prospective financial statement based on the Sales projection that is based on the market-size, sales cycles and product pricing, and with a market size that varies with the product pricing. In addition to the sales projection, the production process and sales fulfillment context are then factored into the revenue generation, invoicing and accounts receivables reality.

Significantly the Viability Analytics must process these activities as it were the company is actually in operation for the entrepreneur to make realistic forecast of the capacity of the venture to attain as well as maintain Enduring Existence. So a digital twin of the company is constructed and operated to evaluate the entity business development through to the maturity stage of the venture. Transitive viability from farm impacts the viability of the Farm Produce Business and hence the Farm viability need be included. The Starting Phase in preparing the venture for the Execution Phase has the challenge of repeatedly performing the Viability Analytics computations of the company in the matured stage to evaluate the from of the business that has viability. Although this is not as simple to perform as it seems, the output is very instructive and proffers guidance as to any possible organization design that should empower viability. A goal here is minimize cost yet cover expenses and choose the Food Store such that the Fixed cost is small.

In computing the Viability Analytics, the CEO or the most Senior Executive to whom the charge of founding the Business has been assigned, will abstract all the functions as are developed into the business processes as derived during the activities routinization from the transition phase. All that activities are made manifest by creating quantifiability to all. The Growth Strategic Plan has to be made manifest in its tactics form. The Growth Strategic Implementation Plan is essentially taken on and worked out into a sequences of time performances tasks, spanning the employment of staff, acquisition of assets, policy implementation, purchasing management, etc. Even the time of between invoicing and revenue receipt and production work-in-progress days must be accounted for. The entire company made manifest is then operated through the span of time-to-maturity of the venture, with object of determining the margins of safety.

In that regard the analysis is still quite similar to the Break Even Analysis but more complex. More specifically while the analysis of Break Even Point centers on the production management, the Viability Analytics centers on the decisions of operations of the company as can be surmised from this definition (borrowed from Enhance Knowledge LLC): “Viability Analytics is the evaluation of the Performance of a corporation subject to its external dependencies and an assessment of the impact of the Performance on the Enduring Existence of the corporation.”; which in simplified format could be elicited from following three main trends of Variable Cost, Fixed Cost and Revenue from the use of the same factors as for Break-Even Analysis though the composition of the factors are significantly different. In particular, econometrics consequent on and capturing prevailing governmental policies, social dynamics, effects of population and demographic changes, as well as the general impact of economic cycle are included in the evaluation of the viability, the delineated factors being dependencies amongst others.

Variable cost is one of the most dynamic costs of a venture such as the Farm-Produce Business. Being derivative of production operations, this cost embodies all the dynamics of purchases changes, product management and cost engineering. One significant impact on the costs comes from the type of production leveling that can be achieved. Production leveling for inventory Management as products will not always be sold off. Market capture rate forecast as guide to production planning

The changes in the production volume affects the leveling constructs aimed at meeting the demands of buyers, yet the produce types that must be supplied and the quantities would still be managed through the most profitable Purchases Management Plan. The structure of the discount negotiated in the Purchase Management Plan has very dynamic effect on the Variable Cost and must be accurately factored into the cost calculations. Besides, procurement costs variations falling outside of the negotiated terms of the Purchase Management Plan also have to be factored into the cost assessment for inventory stock items purchase as per product design and pricing per unit. In addition, the costs must be continually adjusted of the production cost with machines depreciation, and also have adjustments made for staff Learning Curve. Of course, Direct Labour Costs must also be evaluated though on the basis of Product Offered packaging-time costs and warehousing costs given the need to keep the food at a certain temperature to inhibit Biodegradation microbial reactions of microorganisms.

Fixed Cost assessment for viability as contrasted with Fixed Costs of Break Even Point Analysis also presents a whole set of challenging context for consideration. In particular the viability Fixed Costs focus and captures the Tactics of the Growth Strategic Plan of the Farm-Produce Business. The continual assessment over the years of computations of the Viability Analytics must also include every aspect of the growth plan, including debt financing whether from financial institutions or offerings in capital markets, corporate operations staff hiring and office productivity machines procurement schedules, facility expansions, and what-have-you. Of course, financing through stock offering whether being performed as private or public introduces whole different set of capital market and capital investment dynamics which must also be included in the Fixed Cost assessments.

Revenue generated from sales, naturally ties to the production volume and inventory. Quite often production is never completely sold day-after-day. The Sales forecast of weekly and monthly sales based on the market size and sales forecast of snap-shot market size and further growth, do not define the reality of the scope of sales, rather the sales split into inventory and sales, as all production of products are not sold off over the duration of production. Then, of course, the revenue may also impacted by such related expenses as Cost of Sales Financing as accounts receivables financing, Sales fulfillments Financing, Sales Commissions, and Discount Costs of for sales promotions. Moreover, the Sales Volume is impacted by the econometrics of the economic sector is impacted by governmental policies, social dynamics, and changes in population, demographics and lifestyles.

In one respect, viability is assessed in terms of the net difference between the revenue and the sum of the Fixed and Variable Costs that establishes the funds available for the venture to cushion its operations. Equally significantly, the duration for which this difference persists through the life-span of the evolving corporation tells on the capacity of the company to gain Enduring Existence. A life-span duration positive difference points to such attainment and otherwise points to lack thereof of such attainment. Clearly, a persisting net difference, sometimes also called Margin of Safety, asserts viability in yet some respects.

Obviously assessing the viability of Farm-Produce Business by computational approach of Corporate Viability Analytics involves the use of data such as context of the produce supply by Green Subsistence Farming which is subject to productivity impacting governmental policy changes, fertilizers industries changes and myriad other factors. Therefore, keeping apprised on the presentation of Green Subsistence Farming as is also published on this same platform as this article would be quite instructive.