When applying for funding, grants, or just making management decisions, agriculture producers are asked if they have a business plan. While business plans are very common in the business world, is it really necessary for a farm or ranch?
In short, the answer is yes.
Do you have to have a business plan in order to keep your livestock or produce living? No… but there are numerous benefits of having a written business plan for your agriculture operation.
We have included list of just a few of the benefits of having a written business plan.
Benefits of Having a Written Business Plan
Having a Plan
The old saying, “If you fail to plan, then you plan to fail” is true for many agriculture businesses. If you do not spend the time to write out your goals and make a plan for attaining them, you look up in 5 years and you have made no progress. It is very difficult to improve your operation or have it be sustainable without making progress.
Buy-in from partners
You should always include any individuals that make management decisions in the business planning process. Whether a business partner or a partner in life, they should be considered. For example, if you are planning on increasing your vegetable production in the next year, you will need to include any individuals that it may affect in the planning. If increased production means more work for a business partner or spouse, make those considerations before implementing those practices. Ironing out these details ahead of time is invaluable for relationships and management decisions in the business. Completing
By completing a business plan, you not only get the opportunity to capitalize on additional income, but also look at ways to reduce costs. If you can save money on inputs, it ultimately puts more money in your pocket. Reducing costs and increasing your bottom line insures more sustainability in the long run.
Every grant or financing agency asks for a business plan. If you have a business plan, you have access to additional resources and financing for your operation. The value of a business plan is exponential in this way. Not only are you able to show you have thought out your business and the decisions you make, but you can also more easily calculate the impact additional financing or funds on your operation. Likewise, it will help keep you from making poor financing decisions for your business.
Whether monetarily or through well thought out management decisions, the top benefit of having a business plan is increasing your chances of success. I do not know anyone that starts a business venture not wanting it to succeed. With a written plan, you can adjust for challenges and hardships, capitalize on the successes, and in short be a more successful business.
Putting It Into Action
Now that we have highlighted some of the benefits of having a written business plan for your agriculture operation, how do you actually do that?
I have included some resources for agriculture business planning to help you through the process of writing your own business plan.
Texas A&M AgriLife Extension – Developing Business Plans for Agriculture Operations. Printable worksheets for each piece of the business plan. You can also contact your local AgriLife Extension economist for assistance and feedback.
SARE Building a Sustainable Business. This workbook explains each piece of the business plan and includes worksheets and examples.
AgPlan – Online agriculture business planning guide. It is free to use, you just need to create an account. Includes examples and questions to help you think through each piece.
Cornell Small Farms Program – Business Plan Templates. Compiled list of templates, books, and samples for different types of small farms.
There are numerous other business planning websites and materials, so please use what works best for you and your operation.