Creating a farm business plan is a way for you to formalize your thoughts, ideas, and goals. As such, the process can be a real eye opener.
Although a farm business plan is a formal document, it is ongoing. Don’t get bogged down with the idea that you need to get the business plan right from the start. Use our farm business plan template and add as needed for your specific type of farm business.
The best business plans are adaptable. If there is one business that needs integrated adaptability, it is an agricultural business. Mother Nature can impact farmers of all types.
Do i need a business plan for my farm?
Every successful business has a plan that includes operations, marketing, human resources, and finance. As you develop a business plan for your farm, you might be surprised at where the process takes you. Get others involved, and they can contribute small farm business ideas on how to improve production, marketing, and things that you might not have thought of.
You can turn to your farm business plan and use it as a decision support tool. When you have a really great farm business plan, it can be a tool to help you get financing.
Let’s start with our basics for a farm business plan template.
Writing a Farm Business Plan Template: 15+ Things Entrepreneurs Should Include
Use these 15 sections to create your farm business plan template. All tops should be included whether your farm is focused on agriculture (crops) or produce.
Your farm business plan template may include additional topics. Business planning is crucial whether your farm is a start-up or purchasing an existing farming business.
The farm business plan template begins with a summary.
The summary is a company profile. As part of your business plan, it defines the product (s) your farm will produce and how it will be accomplished.
As part of a business planning tool, it is communication. It is communication between those within the farm business and those who view the farm from the outside.
As you write the summary, imagine someone is looking over your shoulder and reading it. These people you imagine include potential lenders, business partners, and customers.
2. Goals and objectives
A good business plan includes goals and objectives. As with most business plans, goals and objectives can be personal and economic. Many examples of business plans for farms include goals and objectives that include environmental stewardship and community awareness.
Farmers can include the preservation of agricultural resources for future generations so that the operation of the farm and the stewardship of land resources remain in the family.
The introduction should let others know who the owners of the business are. It should also include information about their background and level of experience in the industry.
4. Mission statement and values of your farm business plan
This is the topic that gives you the opportunity to talk about the personal values that have led you to the farming business, whether it’s farming or a farm product. The mission statement does this.
The things that attract people to a farming business include sustainability and conservation. As such, agricultural businesses are among the largest in the world.
Do you hold to certain standards, beliefs and qualities? How will you apply these elements to the overall planning of farm management activities?
5. History of the industry
Are there any farm businesses that have historically dominated your area of the United States? Vineyards, hopping, urban agriculture, dairy farms, sheep, cattle or pig farming?
A big part of business planning is finding information that shows a long history of customer demand. Use this information to make informed projections about the future.
6. Background and history of the company
If this business plan is for your family farm, talk about its history, including key events. And if this isn’t your family farm, talk about the history of the farm leading up to your purchase.
If the farming business is a start-up, focus more on the experience and business backgrounds of those involved.
7. Competitor analysis
In the farming business – perhaps like in no other business – competitor analysis is important at a unique level.
A farmer has a connection with the land. Farmers are fierce competitors, but they can also be on each other’s corners acknowledging that they are surviving common challenges.
When you analyze the competition, look for common ground. Are there cooperatives, equipment sharing? For example, can you rent this huge, state-of-the-art corn planter? Can you share a large combine harvester? What about trucking assistance?
8. Target market
Are you going to sell goat cheese in your guest room on the farm? Are you focusing on fresh fruits and vegetables? Is there a demand for more organic products? What is the demographics of the surrounding population?
Are there any local grocery stores or farmers’ markets that would buy you produce? Or is your farm producing something that will be shipped?
If you are using online sales, you will need a website page that is easily accessible with any browser. You may need to hire a professional website designer for your site so that it is linked by keywords and shows up in a search.
Your main page should include your contact details and an email address. It should be linked to other pages. These pages describe each product and price. You can also provide links to articles about your product or links to articles about your type of farm. First, make sure you can use the article if it is copyrighted material. Copyright your website.
9. Products and services
Describe each product or service that is connected to your farm, even if there are a lot of them. Make sure you focus on the features of the product or service that most appeal to your target market.
For example, are you a dairy farmer whose cows are on pasture? Some say that the milk from grazing cows tastes different.
10. Organization, human resources and management plans
Each of them is a separate plane, but they are related.
The organization describes the daily operations of the farm. HR looks at how full-time and part-time farm workers fit into operations. HR can include job descriptions and skills needed, as well as salaries.
The management plan describes who is responsible and chooses the work plan for the day. It may also include plans for scheduled equipment maintenance, animal care, and general harvest / planting times.
11. SWOT analysis
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Ideally, many farm business plans find a way to match strengths and opportunities. Threats include soil and climate issues, as well as supply chain disruptions.
In a job interview, candidates are often asked where they would like to be in 5 years.
Your description in this section extends this answer to other topics. What is your roadmap for the future? Of course, you want to be financially stable. What do you want the farm to look like?
13. Growth strategy
Most models for describing a growth strategy include reimbursing expenses, saving for the future, and expanding the business.
Keeping good records of agricultural production is a key part of any future analysis to determine whether the strategy is working or not.
14. Financial plan
The key elements of the financial plan are balance sheets, income statements, projected cash flows, loan schedules, costs and amortization factors. The investors you can tap for funding will be most interested in income streams.
15. Marketing strategy
The University of Minnesota and Cornell University have tons of information on the elements of a farm business plan. Both also have a wealth of information on promotional strategies.
In a nutshell, think of brochures, advertisements and membership in a cooperative group.
How to write a business plan for a small farm?
Don’t sit down and write it all down. Eliminate, one section at a time. Keep in mind that the plan should not be the final word. You can make adaptations.
How to start an agricultural business plan?
Start with part of the business plan. One of the most difficult sections to write in a business plan is the mission statement. If you get bogged down there, just keep going and come back later.
How much do farm owners earn per year?
As you can imagine, net income varies greatly depending on the type of farming business.
The net result after expenses may not be high. Farmers need to consider equity as assets increase and the value of farm property increases.
How much does it cost to start a small farm?
Setting up to raise 100 beef cattle is much more expensive than setting up to raise 100 rabbits.
Things like the acquisition of the property, the preparation of the ground, the equipment and machinery and the main costs. Other costs can be irrigation systems, packaging and truck transportation.
What is the most profitable farming business?
Poultry farming is currently the most profitable and most common agricultural enterprise in the world. It includes chicken, turkey, quail, ducks and geese, which are raised for meat or eggs.
It is also one of the most expensive businesses to start, requiring a significant capital investment. The industry is very labor intensive and labor costs are high.
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