Techincal Assistance Grant Process

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One form of assistance that is provided by the Georgia Cooperative Development Center (GCDC) is a Technical Assistance Grant (TAG). One of the critical elements essential for creating new business ventures is professional services provided by legal, accounting and business consulting experts. Getting a new business venture started and organized is often difficult because of a lack of funds. The TAG can provide resources for expenses incurred in obtaining legal, accounting, consulting and other business development services in new start-up businesses. Eligible applicants must be a group or an association of agricultural producers. The TAG may also be used by an existing cooperative that needs assistance in order to become more profitable or efficient for its members.  The TAG is available to applicants who can demonstrate their business idea has the potential to profitably add value through processing or marketing of existing commodities or alternative crops and livestock.

Grant Purpose

The overall goal of the GCDC is to improve earnings and economic conditions for agricultural producers, other rural businesses and residents. Encouraging and assisting cooperative business development through value-added marketing and processing of agricultural products and environmental resources is one way to accomplish this goal.

One of the critical elements for creating new business ventures is professional services provided by marketing, accounting and business consulting experts. Getting a new business venture organized and started is often difficult because of limited resources. The TAG can provide for expenses incurred in obtaining legal, accounting, marketing, consulting and other business development services associated with new start-up businesses. Most start-up ventures desperately need professional services in the very early stages, prior to and as a prerequisite to getting a major capital subscription from producer members and other stakeholders. A TAG is intended to help these ventures start on a solid foundation.

The TAG can help fund a feasibility study and initial business plan for a new agribusiness venture. If a TAG study shows a venture is viable, the applicant may be able to use the results to obtain other financial assistance, such as that available through public and private sources. This includes the USDA Rural Development programs such as the Value Added Development Grant and the Guaranteed Business and Industry Loan programs, as well as commercial banks and private investors. The additional financial assistance from loans and grants may be used to further develop a business plan.

Eligibility

Eligible applicants must be a group or an association of agricultural producers with an idea for a business venture project or improving an existing enterprise. The TAG is available to applicants who can demonstrate that their business idea has the potential to profitably add value through processing or marketing of existing commodities, alternative crops and livestock or environmental resources. The TAG is designed to add value to agricultural commodities and to foster long-term economic growth. It cannot be used only to enhance or enlarge existing crop and livestock enterprises. Applicants must consider the potential environmental impacts at the earliest planning stages and develop projects that minimize adverse impacts on environmental resources of rural areas.

The applicant and its members do not have to operate solely in  Georgia or be a Georgia business, if the economics show that more value can be added by locating some operations closer to input suppliers or end-users in other states. But, the project and its proposed benefits must have the potential to increase income to Georgia agricultural producers.

TAG funds may be used for legal, accounting and consulting fees, market analysis, financial analysis, impact analysis and business planning expenses of the applicant. All such assistance will be managed through CAED. Funds may be used for travel and communication expenses but they usually would be a small percent of the total grant. TAG funds may also be used for other expenses that the GCDC deems appropriate. TAG funds may not be used for salaries, equipment, buildings, real estate or purchase of inputs or other resources used in the ongoing operation of the business.

Funding Levels

There is no fixed maximum amount of a TAG. The GCDC Steering Committee will set the priority for the project and approve the level of funding for each application. There is a fixed amount of funding available to the center. The Steering Committee will determine the priority for funding based on based on need and potential benefits.

Any group receiving a grant should follow the TAG guidelines. These guidelines include submitting quarterly reports on their activities and working with the GCDC to follow suggested best management practices while forming the business venture. Additional funds could potentially be approved based on further needs as the applicant works with the GCDC in business education and technical assistance.

Evaluation of Applications

TAG applications will be evaluated by the steering committee in the order in which they are received. Appropriate projects will be funded on a first-come, first-serve basis, for as long as resources allocated to the program are available.

Applications will be judged on the following criteria:

• Value-added product or process potential
• Benefit to the Georgia economy (with a priority given to rural counties)
• Development to date
• Matching funds capability
• Leadership skills of applicants
• Key personnel for the project
• Business experience
• Budget information
• Commitment to follow a professional business development process

Responsibilities of Applicants

Approval to fund a project under the TAG program requires that GCDC and the applicant enter into a written agreement that defines the terms and conditions of funding. The GCDC will provide or arrange for education in business development and operations including economic, business, legal and technical assistance necessary in forming new businesses or expanding existing ones.

TAG funds will be disbursed directly to the applicant certain situations  reflecting the funding level of approved project applications or as reimbursements for approved expenses. In the event of a violation of the agreement by the applicant, GCDC funding is subject to repayment.

In some cases, the approval of a TAG may be contingent on the applicant providing matching funds for the project from private sources. The Steering Committee will set the amount of match required, if any.

Recipients of the TAG will be required to submit to the GCDC the following reports:

1. Semi-Annual progress reports describing organizational or marketing activities accomplished and any expenses incurred using grant funds.
2. A final written report describing the work performed and the results obtained from the cooperative's view.
3. A final narrative presentation to the Southwest Georgia Cooperative Development Center Steering Committee.
   

Application Procedure

Applicants are encouraged to discuss their project ideas with the cooperative development specialist of the GCDC, who can assist in determining eligibility for a TAG and in the application process. Approval of an application involves the following steps:

1. Submit an application with all requirements completed to GCDC for preliminary review. (Application available on-line at http://www.gacoop.org).
2. A review team comprised of members from GCDC, CAED, and/or USDA RB-CS will review the application, provide comments and recommend if a TAG should be awarded.
3. GCDC Steering Committee will then review the recommendation and determine the priority of the request and the level of funding.
4. Projects approved to receive a TAG will enter into a written agreement with GCDC. This agreement stipulates that applicants agree to follow "Best Management Practices" in their business development project.
5. The GCDC and applicant will work together to achieve the project's goals.
   

Best Management Practices for Business Development

The GCDC believes many new business ventures require education and assistance while starting and forming these new ventures. The following stages and steps of business development are included in the "Best Management Practices" (BMP) the GCDC will encourage TAG recipients to follow. The GCDC and the TAG recipient will jointly determine the amount of education on BMP needed by each group that receives an TAG.

BEST MANAGEMENT PRACTICES CHECKLIST
*Open this checklist in another window for printing... checklist.htm

BEST MANAGEMENT PRACTICES CHECKLIST
1. Select a promising business opportunity idea
Discuss idea among a small group of potential members
Formalize specific project ideas
Find agricultural producers to champion the idea
Focus on building a business, not on creating jobs
2. Select steering committee
Steering committee must be involved, committed and feel ownership of project
Establish action plans and timelines
Hold regularly scheduled meetings with prepared agendas
Keep meeting minutes to record decisions and progress
Expect a time consuming path to success
Focus first on why it will work, then why it won't work
3. Select consultants and advisors
Understand the industry
Some information has to be discovered instead of absorbed
Get legal advice before you need it (prevention vs. treatment)
4. Conduct a preliminary market evaluation
Build business in response to market needs
SWOT analysis (strengths, weaknesses, opportunities, threats)
Consider partnering with other value-added groups and/or industry players
5. Assess producer and investor interest
Conduct a potential members producer survey
6. Select interim board of directors
Committee members should be honest, steady and trusted by potential members
Need someone to challenge idea instead of everyone thinking the same
Select representatives outside of agricultural producers
Concentrate on the finished project
Answer, "Why will this project be successful?"
7. Organize with simple Articles of Incorporation and Bylaws
Elect official board of directors
Obtain Directors and Officers insurance
8. Acquire funding for analysis stage
Look for available grants
Members show commitment by contributing financial obligations
ANALYSIS STAGE STEPS
9. Conduct a feasibility study (Should we do it?)
Feasibility study should include: Market evaluation
Economic evaluation
Operating evaluation
Financial evaluation
Management evaluation
10. Prepare a business plan (How do we do it?)
Business plan should included: Organizational plan
Marketing plan
Operational plan
Financial plan
11. Organize the financial plan
Don't underestimate capital needs (working capital, startup losses, contingency)
Don't short projected equity requirements
IMPLEMENTATION STAGE STEPS
12. Recruit members and investor
Prepare prospectus
13. Hire management team
14. Acquire facilities, hire employees
15. Implement business plan and begin operations

Review and complete the following application and send the completed application to:
*Open this application in another window for printing... application.htm

John McKissick
Center for Agribusiness and Economic Development
University of Georgia
Athens, GA 30602
Phone: 706 542-1861 FAX: 706 542-4131
E-mail: CAED@agecon.uga.edu