A business plan is the written vision for your farm and the roadmap or guide on how to get you where you want to go. Constantly reviewing your Business Plan is critical in monitoring and analysing whether the decisions and direction of the business are on track.
What are the benefits of a business plan?
- A written document helps you clarify your objectives and sets out the plan to achieve them
- Identifies and allocates resources to achieve goals and objectives
- Provides essential information to banks and financiers
- Identifies critical issues and risks and the plans to manage these risks
Business plans generally fall into 2 categories:
- In an existing farm business as a management tool to examine an opportunity or make improvements. This can be as simple as a one-page document.
- Seeking external financial support for your existing business or new opportunity. This plan is more extensive and detailed.
The following topics are considered important in most business plans:
Executive Summary – written last, the Executive Summary includes the vision and mission, what the opportunity or goal is, who is involved and what will be achieved. It should capture the interest the reader and compel them to read on!
Financial Analysis – includes analysis of the farms historical and projected performance. You should include profit & loss, balance sheet and cashflow forecast.
Marketing/Production Plan – what is the primary target market, the product, price projections and who are the competitors.
Risk Management Plan– consider the most likely impacts to your business and how you can best mitigate these. A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) can be a great tool in reflecting on risks and how you can combat them.
Exit Analysis – how will you repay debt, what are the timeframes, what is your Succession plan?
Studies show that a business with a documented plan is more likely to profit, grow and survive.
Your Rural Financial Counsellor can help you with the research, analysis, and development of your farm business plan.