Writing a business plan for a farm is a big project but can be as simple as it needs to be.
A good start is to begin with the farm’s mission statement and goals. Then, research and investigate markets, competitors and trends and consider alternative farming strategies. Include all the farm’s financial documents and include a marketing plan.
Take it one step at a time.
Advantages of a Business Plan
A business plan for a farmer helps to plan a farming business and is often a requirement of securing funding and loans.
A business plan is also a roadmap for a farming enterprise. During the writing of a farm business plan, farmers will develop an overall vision for their businesses and provide a strategy of clear goals and objectives.
With a business plan, it is easier for farmers and their staff and families to keep focused on the goals of the farm.
How to Set up a Business Plan
A business plan usually includes a summary of your farming concept, background information, the products the farm is producing, as well as a marketing and financial plan.
A business plan should have goals - the specific aspects that can be measured. Short-term goals can be completed within one year and long-term goals can take longer than one year to complete. Farming goals should be specific, must be measurable, should be attainable and have a timeline, for example, a short term goal could be to achieve a turnover of R10 000 per month within six months.
Use the SWOT analysis. This is a very useful tool to help to make decisions and can assist in setting up a business plan. SWOT stands for strengths, weaknesses, opportunities and threats.
Strengths and weaknesses are factors internal to the farm while opportunities and threats are factors external to the farming business.
Farming Information and Business Plans
A farming business plan should provide some background information.
This requires the farmer to provide an overview of where the farm is situated and the size of the land. Add a farm map showing boundaries and water points if available.
Background information should also state when farming was started and provide information on general practices regarding aspects such as environment, soil health, animal husbandry, marketing and so forth.
Also, give an overview of the farm’s business structure and a list of everyone who is involved in the management of the business. This could include external resources such as consultants or agricultural advisors.
List the farm’s current finances in detail. Provide all current income and expenses but also estimate future operating expenses.
Marketing and Business Plans
Farmers want to sell their products. In order to do so, it requires researching possible offset points and buyers, investigate industry trends and identifying competitors.
When identifying potential markets, find out the requirements for entrance into that market.
Ensure that your farm’s business plan fits into the general market in terms of supply and demand. For each product, include the ​price, packaging units (e.g. 5kg bags or 1-litre glass bottles), seasonality as well as ideas for promotion.
By Marinda Louw