A business plan is an important step for any size business no matter how simple or complex. You should create a strong business plan because it will:
Help you get organized: It will help you to remember all of the details and make sure you are taking all of the necessary steps.
Will act as your guide: It will help you to think carefully about why you want to farm or ranch and what you want to achieve in the future. Over time, you can look back at your business plan and determine whether you are achieving your goals.
Is required to get a loan: To get an FSA loan, a guarantee on a loan made by a commercial lender, or a land contract, you need to create a detailed business plan.
There are many different styles of business plans. Some are written documents and others may be a set of worksheets that you complete. No matter what format you choose, there are several key aspects of your operation that are important to consider.
Business History: Are you starting out new or are you already in business? Products you offer, size of operation, agriculture experience, length of time in business.
Mission, Vision, and Goals: Values important to your business, short- and long-term goals, your plan to start, expand or change your operation. How you plan to be more efficient or profitable. What type of farm/ranch model do you plan to use (conventional, sustainable, organic, alternative, etc.).
Organization and Management: What is the legal structure of your business (sole, partnership, corporation, trust, LLC, etc.). What help will you need in managing and operating? What resources do you plan to use such as a mentor or community-based organization.
Marketing: Narrow down your target audience and think about what you are providing that others cannot. What are you producing, who is your target consumer, is there a demand for your product, production cost, how you will get the product to the consumer and what licensing do you need to meet federal, state and local food safety regulations.
Operation: There are many types of land, tools and resources to choose from. You need to think about what you currently have and what you need to achieve your goals. Do you have access to farmland or do you plan to lease, rent or purchase land? What equipment do you need? Will you be implementing any conservation practices to sustain your operation? Do you need additional workers to operate the farm?
Financial: How do you plan to finance the business? What are your current assets and liabilities? Will the income you generate be enough to pay your operating expenses, living expenses and loan payments? Do you have additional sources of income to supplement your business income? How will you measure the success of your business?
Creating a good business plan takes time and effort. The following are some key resources for planning your business.
Farm Answers (https://farmanswers.org/library) from the University of Minnesota, it features a library of how-to-resources and guidance, a directory of beginning farmer training programs, and other sources of information in agriculture.
The Small Business Administration (https://www.sba.gov/business-guide) offers information about starting, managing, and transitioning a business.
SCORE (https://www.score.org/usda) is a nonprofit organization with a network of volunteers who have experience in running and. Managing a business. The Score Mentorship Program partners with the USDA.
Many training opportunities are available thru local and regional agricultural organizations, including USDA and your state Cooperative Extensions
Brian Pahl of Nixa, Mo., is a Financial Representative with RPS Financial Group, Inc. He can be contacted at 417-877-8600 or [email protected]
