Business Plans For Farms

A common misconception that people have is that a business plan is just for financing. If you were to ask a random group of people whether or not they have a written business plan, many would answer “I don’t need one, I am not applying for a loan.” A written business plan should be a written guide for your business, almost like an owners manual. It should contain your short term and future goals and how you intend to implement them. No matter how big or small your business is, “if you fail to plan you plan to fail.”

There are several steps in writing your business plan. Essentially though the business plan can be broken in 4 main parts. 

·        A description of the business

·        Marketing

·        Finances

·        Management

 An outline for a basic business plan would be as follows.  After your main title page this is the order your plan should follow.

1.      Executive summary 

2.      Table of contents

3.      Vision 

4.      Mission 

5.      Business strategy 

6.      Core competencies and challenges

7.      Market opportunities 

8.      Marketing strategy including product & sales strategy 

9.      Financials 

10.  Appendices And Exhibits

Executive Summary

Following your title page you will have what is called the “Executive Summary”. Your executive summary is considered the most important part of the business plan. Is should capture the readers attention right away if you are planning to present it for any sort of financial application. In this section you outline who the owners of the business are, what they offer to the business and how it is structured.

In a nutshell, it should briefly summarize everything that is within the remainder of the business plan. It tells the reader who you are and what you want. Even though this is the introduction to your business you should probably do this part last. The reason being that the other parts of the plan can be used to put this summary together. The goal is to be clear and concise in this part of the plan. You need to have a good handle on who you are and where you are going and what your business concept is. The business concept consists of what market will you serve, what you will be offering for services and why your business will be successful.

You should let the reader know whether you have previous experience in the industry and if you do, be sure to outline it. If you have hired someone who has a track record in the industry that should be noted.

Basic financial information such as projections of sales needs to be touched on in this section also. State what you need in terms of financial funding, if anything, and where the business is now.

Table of Contents

The table of contents simply outlines the major headings, so a reader can easily navigate the plan.

Vision Statement

The vision statement is one sentence that clearly states what your main dream is and how you will benefit the industry. It should be a focused statement that is a future goal, for your business. A example for the horse industry would be “Dream catchers stable envisions, providing a top quality horse haven for all riders to enjoy”.

Mission Statement

The mission statement is a single sentence that outlines how you plan to achieve your vision. This has to be stated in a measurable manner, using achievable goals. An example of this would be. “Dream catchers stable’s mission is to become the industry leader in top quality care.”

Business Strategy

Business Strategy section should be around 3 to 4 pages long. It will describe how you will put your marketing strategy to work. The business strategy includes an outline of your business model.

Cost and revenue strategies. What your profit margin and market share strategy are. Your location strategy. And what your strategies for growth are. In this section you should describe what your plans for growth and expansion are. Milestones should be outlaid including descriptions and timelines. What your strategy for implementing these should be described.

Core competencies and challenges

This is where you need to list your strengths and weakness’. Every business, like every person, has them. It is an important exercise for every manager to identify these. You can use this section to really show how you have a competitive advantage. You can also use this to address the obvious questions potential financial instructions will wonder about before you are asked them. Address all potential problems with achievable strategies for dealing with them in this section.

Market Opportunities

In this section you need to outline

1) A description of the market,

     Who are your customers and what is the current and past market like.

2) A description of the customers,

What are the industry statistics like for your market base? How many customers would be in your market area?

3) Current products and services that are offered

What is the current price for your type of service, what sort of services does that price  include.

4) A description of your competition.

 Who is your current competition. How many barns are in your area? What do they  charge and what do they offer.

You can present this information in a paragraph form or in well organized bullets. This is important and you are presenting how viable your business is and that you have taken the time to research this. It must be well thought out and thorough.

 Marketing Strategy

 In this part of your plan you will outline what your main product or service is and what you will be offering. This also needs to touch on how what you are offering will give you a competitive edge. Will you offer packages, or will there be extras for certain things?

What is your is your pricing strategy, how will your fix your prices? And what is your sales strategy, will you advertise in trade magazines, newspapers, forums? Also in this area you need to list about 5 of your nearest competitors, growth trends, what your competitions strength and weakness’ are. What is your competitions, pricing like and how do they advertise their business’s.

This is another area that needs to be well thought out and presented in an easy to read manner. You are selling your plan of attack.

Financials 

The financials section includes your current and past financial performance, (if applicable) as well as you future goals. Depending on what stage you business is in, new or existing this section should include, some or all of the below:

1)      Revenue projections 

2)      Income statement projection 

3)      Income statement current

4)      Income statement past

5)      Balance sheet current

6)      Cash flow projections  

Optional information you can provide, if it is needed, is a break-even analysis. A list of loan applications with justifications for loan applications if you are presenting the plan for financing. You may also want to include a list of needed supplies or equipment you may need for your operation.

Appendices And Exhibits

At the end of your business plan there should be a section dedicated to Appendices And Exhibits. This is where you attach any supporting documentation for your business. Examples would be photographs of your farm, marketing research studies any legal agreements like partnership agreements. Any pertinent information for your business should be attached in this section.

Although this may seem like a huge, daunting task putting your business plan onto paper is important. It is easy to get caught up and lose track of what your goals are if you don’t have a clear written plan that you refer to regularly. The horse industry is a difficult industry at the best of times to have a profitable business, but with a lot of careful planning and research it is possible. Remember to keep your goals attainable and your timeline reasonable. When doing your financial plan it is important to ensure that your forecasts are honest.

Happy planning.

Megan Dykeman- 2006 (c)

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