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How to Start a Farm: Plan Your Operation
Think about your operation from the ground up and start planning for your business. A good farm business plan is your roadmap to start-up, profitability, and growth, and provides the foundation for your conversation with USDA about how our programs can complement your operation.
Keep reading about planning your business below or jump to a different section of the farmer's journey.
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Why you need a farm business plan.
A comprehensive business plan is an important first 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 . In order 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 . Lenders look closely at business plans to determine if you can afford to repay the loan.
How USDA Can Help
Whether you need a good get-started guide, have a plan that you would like to verify, or have a plan you’re looking to update for your next growth phase, USDA can help connect you to resources to help your decisions.
Your state's beginning farmer and rancher coordinator can connect you to local resources in your community to help you establish a successful business plan. Reach out to your state's coordinator for one-on-one technical assistance and guidance. They can also connect you with organizations that specifically serve beginning farmers and ranchers.
It is important to know that no single solution fits everyone, and you should research, seek guidance, and make the best decision for your operation according to your own individual priorities.
Build a Farm Business Plan
There are many different styles of business plans. Some are written documents; others may be a set of worksheets that you complete. No matter what format you choose, several key aspects of your operation are important to consider.
Use the guidelines below to draft your business plan. Answering these kinds of questions in detail will help you create and develop your final business plan. Once you have a business plan for your operation, prepare for your visit to a USDA service center. During your visit, we can help you with the necessary steps to register your business and get access to key USDA programs.
Are you starting a new farm or ranch, or are you already in business? If you are already in business:
- What products do you produce?
- What is the size of your operation?
- What agricultural production and financial management training or experience do you, your family members, or your business partners have?
- How long have you been in business?
Mission, Vision, and Goals
This is your business. Defining your mission, vision and goals is crucial to the success of your business. These questions will help provide a basis for developing other aspects of your business plan.
- What values are important to you and the operation as a whole?
- What short- and long-term goals do you have for your operation?
- How do you plan to start, expand, or change your operation?
- What plans do you have to make your operation efficient or more profitable ?
- What type of farm or ranch model (conventional, sustainable, organic, or alternative agricultural practices) do you plan to use?
Organization and Management
Starting your own business is no small feat. You will need to determine how your business will be structured and organized, and who will manage (or help manage) your business. You will need to be able to convey this to others who are involved as well.
- What is the legal structure of your business? Will it be a sole proprietorship, partnership, corporation, trust, limited liability company, or other type of entity?
- What help will you need in operating and managing your farm or ranch?
- What other resources, such as a mentor or community-based organization , do you plan to use?
Marketing is a valuable tool for businesses. It can help your businesses increase brand awareness, engagement and sales. It is important to narrow down your target audience and think about what you are providing that others cannot.
- What are you going to produce ?
- Who is your target consumer ?
- Is there demand for what you are planning to produce?
- What is the cost of production?
- How much will you sell it for and when do you expect to see profit ?
- How will you get your product to consumers ? What are the transportation costs and requirements?
- How will you market your products?
- Do you know the relevant federal, state, and local food safety regulations? What licensing do you need for your operation?
Today there are many types of land, tools, and resources to choose from. You will need to think about what you currently have and what you will need to obtain to achieve your goals.
- What resources do you have or will you need for your business?
- Do you already have access to farmland ? If not, do you plan to lease, rent, or purchase land?
- What equipment do you need?
- Is the equipment and real estate that you own or rent adequate to conduct your operation? If not, how do you plan to address those needs?
- Will you be implementing any conservation practices to sustain your operation?
- What types of workers will you need to operate the farm?
- What additional resources do you need?
Now that you have an idea of what you are going to provide and what you will need to run your operation you will need to consider the finances of your operation.
- How will you finance the business?
- What are your current assets (property or investments you own) and liabilities (debts, loans, or payments you owe)?
- Will the income you generate be sufficient to pay your operating expenses, living expenses, and loan payments?
- What other sources of income are available to supplement your business income?
- What business expenses will you incur?
- What family living expenses do you pay?
- What are some potential risks or challenges you foresee for your operation? How will you manage those risks?
- How will you measure the success of your business?
Farm Business Plan Worksheets
These farm business plan worksheets can help gather information for the financial and operational aspects of your plan.
Form FSA-2037 is a template that gathers information on your assets and liabilities like farm equipment, vehicles and existing loans.
- FSA-2037 - Farm Business Plan - Balance Sheet
- FSA-2037 Instructions
Income and Expenses
Form FSA-2038 is part of the farm loan application, and shows you the type of information you should gather when preparing your plan and application materials.
- FSA-2038 - Worksheet Projected Income and Expenses
- FSA-2038 Instructions
Planning for Conservation and Risk Management
Another key tool is a conservation plan, which determines how you want to improve the health of your land. A conservation plan can help you lay out your plan to address resource needs, costs and schedules.
USDA’s Natural Resources Conservation Service (NRCS) staff are available at your local USDA Service Center to help you develop a conservation plan for your land based on your goals. NRCS staff can also help you explore conservation programs and initiatives, such as the Environmental Quality Incentives Program (EQIP) .
Conservation in Agriculture
Crop insurance, whole farm revenue protection and other resources can help you prepare for unforeseen challenges like natural disasters.
Special Considerations for Businesses
There are different types of farm businesses each with their own unique considerations. Determine what applies to your operation.
- Organic Farming has unique considerations. Learn about organic agriculture , organic certification , and the Organic Certification Cost Share Program to see if an organic business is an option for you. NRCS also has resources for organic producers and offers assistance to develop a conservation plan.
- Urban Farming has special opportunities and restrictions. Learn how USDA can help farmers in urban spaces .
- Value-Added Products . The Agricultural Marketing Resource Center (AgMRC) is a national virtual resource center for value-added agricultural groups.
- Cooperative. If you are interested in starting a cooperative, USDA’s Rural Development Agency (RD) has helpful resources to help you begin . State-based Cooperative Development Centers , partially funded by RD, provide technical assistance and education on starting a cooperative.
Special Considerations for Individuals
Historically Underserved Farmers and Ranchers: We offer help for the unique concerns of producers who meet the USDA definition of "historically underserved," which includes farmers who are:
- socially disadvantaged
- limited resource
- military veterans
Women: Learn about specific incentives, priorities, and set asides for women in agriculture within USDA programs.
Heirs' Property Landowners: If you inherited land without a clear title or documented legal ownership, learn how USDA can help Heirs’ Property Landowners gain access to a variety of programs and services
Creating a good business plan takes time and effort. The following are some key resources for planning your business.
- Farm Answers from the University of Minnesota features a library of how-to resources and guidance, a directory of beginning farmer training programs, and other sources of information in agriculture. The library includes business planning guides such as a Guide to Developing a Business Plan for Farms and Rural Businesses and an Example Business Plan .
- The Small Business Administration (SBA) offers information about starting, managing, and transitioning a business.
SCORE is a nonprofit organization with a network of volunteers who have experience in running and managing businesses. The Score Mentorship Program partners with USDA to provide:
- Free, local support and resources, including business planning help, financial guidance, growth strategies.
- Mentorship through one-on-one business coaching -- in-person, online, and by phone.
- Training from subject matter experts with agribusiness experience.
- Online resources and step-by-step outlines for business strategies.
- Learn more about the program through the Score FAQ .
Attend field days, workshops, courses, or formal education programs to build necessary skills to ensure you can successfully produce your selected farm products and/or services. Many local and regional agricultural organizations, including USDA and Cooperative Extension, offer training to beginning farmers.
- Cooperative Extension offices address common issues faced by agricultural producers, and conduct workshops and educational events for the agricultural community.
- extension.org is an online community for the Cooperative Extension program where you can find publications and ask experts for advice.
Now that you have a basic plan for your farm operation, prepare for your visit to a USDA service center.
2. Visit Your USDA Service Center
How to Start a Farm with USDA
Get an overview of the beginning farmer's journey or jump to a specific page below.
Find Your Local Service Center
USDA Service Centers are locations where you can connect with Farm Service Agency, Natural Resources Conservation Service, or Rural Development employees for your business needs. Enter your state and county below to ﬁnd your local service center and agency offices. If this locator does not work in your browser, please visit offices.usda.gov.
Learn more about our Urban Service Centers . Visit the Risk Management Agency website to ﬁnd a regional or compliance office or to ﬁnd an insurance agent near you.
Free Agriculture Sample Business Plan PDF + How to Write
As a farmer, you’re in the business of putting food on the table. Agriculture is one of the world’s oldest professions. Today it accounts for over 5% of U.S. Gross Domestic Product, and 1 in 10 American workers are in agriculture, food, and related industries.
But starting a new agriculture business requires intensive planning and upfront preparation. If you’re looking for a free, downloadable agriculture sample business plan PDF to help you create a business plan of your own, look no further.
Keep in mind that you don’t need to find a sample business plan that exactly matches your farm. Whether you’re launching a larger agricultural business outside a bustling city or a smaller organic operation, the details will be different, but the foundation of the plan will be the same.
Are you writing a business plan for your farm because you’re seeking a loan? Is your primary concern outlining a clear path for sales growth? Either way, you’re going to want to edit and customize it so it fits your particular farm.
No two agriculture farming businesses are alike. For example, your strategy will be very different if you’re a dairy operation instead of a soybean farm. So take the time to create your own financial forecasts and do enough market research for your specific type of agriculture so you have a solid plan for success.
What should you include in an agriculture farm business plan?
Your agriculture business plan doesn’t need to be hundreds of pages—keep it as short and focused as you can. You’ll probably want to include each of these sections:
1. Executive summary
An overview of your agriculture business, with a brief description of your products or services, your legal structure, and a snapshot of your future plans. While it’s the first part of the plan, it’s often easier to write this section last.
2. Business summary and funding needs
Details about your farming operation, including how much capital you will need and the types of funding you’re considering. Include your business history, your current state, and your future projections. It should also cover your business location, the equipment and facilities needed, and the kinds of crops or livestock you plan to raise.
3. Products and services
Provide details on the types of crops, farming methods, and any value-added products you plan to offer, such as finished goods or even agritourism offerings .
4. Marketing plan
Compile your market research findings, including the demand for your products or services, your target customers, and your competitors. It should also outline your marketing strategy—how you plan to attract and retain customers.
5. Financial plan
Your revenue projections, cost estimates, and break-even analysis. This section should demonstrate that your business has a path to profitability.
Building on your farm business plan sample
With a free agriculture business plan template as your starting point, you can start chipping away at the unique elements of your business plan.
As the business owner, only you can speak to aspects of your agriculture operation like your mission and core values. You’re putting in the long hours to start a thriving farm business, so aspects of your mission – like a commitment to sustainable farming practices – will be best explained in your own words. Authenticity will help you connect with a growing market of consumers who value transparency and environmental stewardship in their food sources.
As for more conventional aspects of business planning, you will want to take on things like your marketing and financial plans one at a time. Here are a few specific areas to focus on when writing your business plan.
Invest time in market research
Starting an agriculture operation requires significant startup costs. When you throw in the unique land use considerations involved, it’s crucial to conduct thorough market research before investing hundreds of thousands – or even millions – of dollars into a farm business.
Start by researching the types of farms operating in your locality and wider region, and the specific crops or livestock they specialize in. You will need to understand seasonal trends, including crop yields and livestock productivity. Note the demographics of the local community to understand their buying habits and preference for local produce. Also, be aware of the competitive landscape and how your farm can differentiate itself from others. All of this information will inform your service, pricing, marketing, and partnership strategy.
From there, you can outline how you plan to reach your target market and promote your farm’s offerings.
Craft your agriculture go-to-market strategy
One of the things that makes an agriculture farm business plan different than some other service-based business plans is that you might decide to only work with one or two businesses that purchase your goods.
You may offer different tiers of products to different types of buyers, such as produce for an organic farmers market, and corn for another farm’s animal feed. If that’s the case, make sure you include ideas like setting aside land for organic growth and maintenance.
Discuss your advertising and promotional strategies, emphasizing channels relevant to your target market. Also, consider how partnerships with local businesses, farmers’ markets, and other industry stakeholders can enhance your visibility.
Include your pricing strategy and any special promotions or loyalty programs. Also, consider public relations and media outreach efforts that can raise awareness about your farm and its sustainable practices.
Prepare for unique farming challenges
Running an agricultural business comes with its own set of challenges, including weather-related disruptions and market volatility. Your business plan should identify these potential risks and present contingency plans to address them.
Include a plan to mitigate weather-related risks, such as crop diversification, employing weather-resistant farming practices, investing in appropriate infrastructure like greenhouses or drainage systems, or taking out insurance to cover weather-related losses.
Detail the operational aspects of your business, including land ownership, employee status, farm maintenance, and safety requirements. Also, illustrate your strategies for managing crop production, livestock care, land stewardship, and regulatory compliance.
Plan for the future
Contingency planning is important in all businesses. But the unique challenges in agriculture of changing market dynamics, regulatory changes, and climate impacts make it especially necessary to plan for the future. Detail how you’ll measure success, and how you will be prepared to adapt your offerings if you need to change the focus of the business due to factors outside your control.
Also, be ready to discuss opportunities for scaling your business over time, such as introducing new crops, expanding farm operations, or opening additional locations.
Get started with your farm business plan sample
There are obviously plenty of reasons farm owners can benefit from writing a business plan — for example, you’ll need one if you’re seeking a loan or investment. Even if you’re not seeking funding, the process of thinking through every aspect of your business will help you make sure you’re not overlooking anything critical as you grow.
Download this agriculture farm sample business plan PDF for free right now, or visit Bplans’ gallery of more than 550 sample business plans if you’re looking for more options.
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Sample Business Plans
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- Berries & Grapes
- Biodiversity & Pest Management
- Harvest & Handling
- Herbs & Flowers
- Nursery Crops & Greenhouses
- Tree Fruits & Nuts
- Winter Farming
- Drought, Fire, Flood, Disaster Relief and Resiliency Programs
- Dry Farming Research
- Community Support Agriculture
- Marketing Your Farm
- Meat & Eggs
- Raw Agricultural Products
- Value Added
- Farmers' Markets
- Organic Fertilizer and Cover Crop Calculators
- Hay Production
- Irrigation & Fencing
- Mud & Manure Management
- Nutrient Management
- Pasture and Grazing Management
- Weeds, Poisonous Plants, & Other Pests
- Soil Testing
- Soil Surveys
- Improving Soil Quality & Cover Crops
- Agricultural Composting and Water Quality
- Water & Irrigation
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Below are examples of different farm business plans and a loan application:
Oregon Flower Farm Business Plan Example
Interval Farm Business Plan Sample
Peach Farm Business Plan Sample
USDA FSA Sample Microloan Application
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Farming Business Plan
Agriculture is the one industry that consistently does well, irrespective matter the economic conditions of the world. So, for a stable income and career farming business is a great option.
Are you looking to start writing a business plan for your farming business? Creating a business plan is essential to starting, growing, and securing funding for your business. We have prepared a farming business plan template for you to help in start writing yours.
Free Business Plan Template
Download our Free Business Plan Template now and pave the way to success. Let’s turn your vision into an actionable strategy!
- Fill in the blanks – Outline
- Financial Tables
How to Write a Farming Business Plan?
Writing a farming business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:
1. Executive Summary
An executive summary is the first section of the business plan intended to provide an overview of the whole business plan. Generally, it is written after the entire business plan is ready. Here are some components to add to your summary:
Start with a brief introduction:
Market opportunity:, mention your services:, management team:.
Name all the key members of your management team with their duties, responsibilities, and qualifications.
Call to action:.
Ensure you keep your executive summary concise and clear, use simple language, and avoid jargon.
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2. Business Overview
Depending on what details of your business are important, you’ll need different elements in your business overview . Still, there are some foundational elements like business name, legal structure, location, history, and mission statement that every business overview should include:
About the business:
Provide all the basic information about your business in this section like:
- The name of your farming business and the type of business you are running or will run: organic farming, agricultural farming, dairy farming, commercial farming, or something else.
- Company structure of your farming business whether it is a proprietorship, LLC, partnership firm, or some other.
- Location of your farm and the reason why you selected that place.
Business history:, future goals:.
This section should provide an in-depth understanding of your farming business. Also, the business overview section should be engaging and precise.
3. Market Analysis
Market analysis provides a clear understanding of the market in which your farming business will run along with the target market, competitors, and growth opportunities. Your market analysis should contain the following essential components:
Market size and growth potential:, competitive analysis:, market trends:, regulatory environment:.
Some additional tips for writing the market analysis section of your business plan:
- Use a variety of sources to gather data, including industry reports, market research studies, and surveys.
- Be specific and provide detailed information wherever possible.
- Include charts and graphs to help illustrate your key points.
- Keep your target audience in mind while writing the business plan
4. Products And Services
The product and services section of an agriculture business plan should describe the specific services and products that will be offered to customers. To write this section should include the following:
List the products & services:
- List the products you will produce or sell, such as crops, fruits, flowers, livestock, or value-added products like cheese or jams.
- Describe each product: Explain the features of your products, such as their quality, variety, and uniqueness. Also, discuss how your products will be packaged and marketed.
Emphasize safety and quality:
Overall, the product and services section of a business plan should be detailed, informative, and customer-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.
5. Operations Plan
When writing the operations plan section, it’s important to consider the various aspects of your business operations. Here are the components to include in an operations plan:
By including these key elements in your operations plan section, you can create a comprehensive plan that outlines how you will run your farming business.
6. Management Team
The management team section provides an overview of the individuals responsible for running the farming business. This section should provide a detailed description of the experience and qualifications of each manager, as well as their responsibilities and roles.
Organizational structure:, compensation plan:, board of advisors:.
Describe your company’s key personnel and highlight why your business has the fittest team.
7. Financial Plan
When writing the financial plan section of a business plan, it’s important to provide a comprehensive overview of your financial projections for the first few years of your business.
Profit & loss statement:
Cash flow statement:, balance sheet:, break-even point:, financing needs:.
Remember to be realistic with your financial projections, and to provide supporting evidence for all of your estimates.
When writing the appendix section, you should include any additional information that supports the main content of your plan. This may include financial statements, market research data, legal documents, and other relevant information.
- Include a table of contents for the appendix section to make it easy for readers to find specific information.
- Include financial statements such as income statements, balance sheets, and cash flow statements. These should be up-to-date and show your financial projections for at least the first three years of your business.
- Provide market research data, such as statistics on the size of the agriculture industry, consumer demographics, and trends in the industry.
- Include any legal documents such as permits, licenses, and contracts.
- Provide any additional documentation related to your business plans, such as marketing materials, product brochures, and operational procedures.
- Use clear headings and labels for each section of the appendix so that readers can easily find the information they need.
Remember, the appendix section of your farming business should only include relevant and important information that supports the main content of your plan.
The Quickest Way to turn a Business Idea into a Business Plan
Fill-in-the-blanks and automatic financials make it easy.
This farming business plan sample will provide an idea for writing a successful farming business plan, including all the essential components of your business.
After this, if you are still confused about how to write an investment-ready agriculture business plan to impress your audience, then download our farming business plan pdf.
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Frequently asked questions, why do you need a farming business plan.
A business plan is an essential tool for anyone looking to start or run a successful farming business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your farming business.
Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your farming business.
How to get funding for your farming business?
There are several ways to get funding for your agriculture business, but one of the most efficient and speedy funding options is self-funding. Other options for funding are!
- Bank loan – You may apply for a loan in government or private banks.
- Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
- Crowdfunding – The process of supporting a project or business by getting many people to invest in your farming business, usually online.
- Angel investors – Getting funds from angel investors is one of the most sought options for startups.
- Venture capital – Venture capitalists will invest in your business in exchange for a percentage of shares, so this funding option is also viable.
Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.
Where to find business plan writers for your farming business?
There are many business plan writers available, but no one knows your business and idea better than you, so we recommend you write your farming business plan and outline your vision as you have in your mind.
What is the easiest way to write your agriculture business plan?
A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any farming business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.
About the Author
Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more
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19+ Farm Business Plan Templates – Word, PDF, Excel, Google Docs, Apple Pages
To develop a viable farm business plan , it will take a great idea. During the writing of a farm business plan, you will develop an overall vision and mission for your business. You can add the short and long term goals you have for your farm in the plan. In planning for your next bean of the farm business, deciding on the suppliers, making the deduction of the selling point or shop expansion plan, templates will always inspire a thoughtful plan for you.
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Creating a Farm Business Plan:
Step 1: Goals and Objectives
Step 2: background information, step 3: market research, step 4: strategy and marketing plan, step 5: budget, step 6: review, agriculture farm business plan.
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General faqs, 1. what is a farm business plan, 2. what is the purpose of a farm business plan, 3. what should be included in a farm business plan.
- Gather information and research markets
- SWOT analysis
- Alternative strategies, if any
- Add one or more conclusion
- Add your strategies and reread your mission statement
- Implementation plan to reach your goals
- List of resources and materials needed, budget , etc.
4. What is a good Farm Business Plan?
5. how to make a farm business plan.
- Take stock of the crops growing on your farmland
- Assess how long does it take to grow a certain crop
- Write the mission statements
- Design your business plan
- Action plan to get over any unexpected/expected crisis
- Budget for each crop and their sale values
- Salaries for workers, etc.
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Agricultural Business Plan Template
Written by Dave Lavinsky
Agricultural Business Plan
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their agricultural companies.
If you’re unfamiliar with creating an agricultural business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write an agricultural business plan step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your agricultural business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start an agricultural business or grow your existing agricultural company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your agricultural business to improve your chances of success. Your agricultural business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Agricultural Businesses
With regards to funding, the main sources of funding for an agricultural business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for agricultural companies.
Finish Your Business Plan Today!
How to write a business plan for a agricultural business.
If you want to start an agricultural business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your agricultural business plan.
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of agricultural business you are running and the status. For example, are you a startup, do you have an agricultural business that you would like to grow, or are you operating an established agricultural business you would like to sell?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overview of the agricultural industry.
- Discuss the type of agricultural business you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategy. Identify the key members of your team.
- Offer an overview of your financial plan.
In your company overview, you will detail the type of agricultural business you are operating.
For example, you might specialize in one of the following types of agricultural businesses:
- Animal feed manufacturing: the production and sale of food formulas for farm animals.
- Agrichemical and seed manufacturing: the production and sale of agrichemicals (e.g., fertilizers, pesticides, and fungicides) and seeds to farmers that support the growth of their crops.
- Agricultural engineering: development, testing, and implementation of new agriculture tools and machinery to improve the process for farmers.
- Biofuel manufacturing: the production of energy from biomass.
- Crop production: the process of growing and harvesting a variety of crops such as fruits, vegetables, and grains.
In addition to explaining the type of agricultural business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include reaching X number of harvests per year, the number of customers served, or reaching $X amount in revenue.
- Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry or market analysis, you need to provide an overview of the agricultural industry. While this may seem unnecessary, it serves multiple purposes.
First, researching the agricultural industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your agricultural business plan:
- How big is the agricultural industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your agricultural business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your agricultural business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, schools, families, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of agricultural business you operate. Clearly, schools would respond to different marketing promotions than corporations, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.
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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other agricultural businesses.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other types of farmers, wholesalers, and distributors.
For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
- What types of customers do they serve?
- What type of agricultural business are they?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you make it easier for your customers to engage with you?
- Will you offer products or services that your competition doesn’t?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a agricultural business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type of agricultural company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you produce fruit, soy, or vegetable products?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.
Place : Place refers to the site of your agricultural company. Document where your company is situated and mention how the site will impact your success. For example, is your agricultural business located on a small or large farm near your customer base? And, will you operate one or multiple locations? Discuss how your site might be the ideal location for your customers.
Promotions : The final part of your agricultural marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Advertise in local papers, radio stations and/or magazines
- Reach out to websites
- Distribute flyers
- Engage in email marketing
- Advertise on social media platforms
- Improve the SEO (search engine optimization) on your website for targeted keywords
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your agricultural business, including scheduling employees, tracking inventory, accepting orders and payments, and meeting with customers.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to reach your Xth harvest, or when you hope to generate $X in revenue. It could also be when you expect to expand your agricultural business to a new region.
To demonstrate your agricultural business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing agricultural businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing an agricultural business, or owning their own farm.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, how many pounds of each crop do you plan to yield each season? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your agricultural business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a agricultural business:
- Cost of farm equipment and supplies
- Payroll or salaries paid to staff
- Business insurance
- Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your farm’s location lease or a list of agricultural equipment and machinery used on your farm.
Writing a business plan for your agricultural business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the agricultural industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful agricultural business.
Agricultural Business Plan Template FAQs
What is the easiest way to complete my agricultural business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily write your agricultural business plan.
How Do You Start an Agricultural Business?
Starting an agricultural business is easy with these 14 steps:
- Choose the Name for Your Agricultural Business
- Create Your Agricultural Business Plan
- Choose the Legal Structure for Your Agricultural Business
- Secure Startup Funding for Your Agricultural Business (If Needed)
- Secure a Location for Your Business
- Register Your Agricultural Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Agricultural Business
- Buy or Lease the Right Agricultural Business Equipment
- Develop Your Agricultural Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Agricultural Business
- Open for Business
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Other Helpful Business Plan Articles & Templates
THE FARM ONE-PAGE BUSINESS PLAN TEMPLATE
Reading time: 9 minutes.
Hey there, thanks for joining me again this week.
So business planning is the focus this week. Now, what do people usually say is the first thing you need before going into business? They say a business plan, right? Doesn’t matter if it’s your mom, your brother, a banker or someone you meet in the coffee shop. They all drink the same Kool-Aid and start chanting, you need a business plan, you need a business plan.
On the surface, it makes sense that we’re told to create a business plan. Because real businesses have business plans, and we want to run a real business, right? But, have you ever seen a comprehensive business plan? Have you written a business plan? And, be honest…do you have a written business plan for your farm?
I’m not saying that planning isn’t necessary, even helpful. But “traditional” business planning is overemphasized, in my view. Just as a college education (usually) is.
And, listen, I’ve written and reviewed a ton of business plans. Many of them well over 100 pages long, full of internal and external analysis, capital allocation plans, key performance goals, market analysis, financial projections, contingency plans, human resources and marketing plans, SWOT analysis, Gantt charts and so on. And you also see a lot of emphasis on exit strategies, which not many new farmers are interested in. Which is too bad. Not because they should necessarily aspire to sell their farm businesses. But because they should build and run them as if they would. That way, they’d be much more successful.
But back to the point about business plans. Why did I create these plans, and were they useful?
Well, most of them I created because I had to. I worked in a Fortune 500 company and we had to create plans to persuade a board of directors, lenders and investors, to make capital allocations.
Later when I founded my own business, I had to create the plans to facilitate funding from venture capitalists, angel investors and banks.
But the key phrase here is “I had to”. So, I did. But what happened to the plans after I created them?
They got filed away, in the old days. Later as technology took over, they got stuck in a digital folder. But in both cases, they collected physical and digital dust.
In the corporate world, the business plans were useful for upper management to admonish me if I missed projections. They could say, “here’s what you said you’d do” and point to any gaps that existed. Fortunately, that was rarely the case for me, but that was how the plan was used.
When dealing with lenders, especially banks, with my own business, the business plan supposedly established that I was serious about my business—because I had obviously put a great deal of thought into my strategy.
Of course, my financial projections always looked exactly like everyone else’s. In other words, like a hockey stick. Hockey stick financial projections . A hockey stick financial projection is one that shows a slow or flat start, and then magically rockets up for future years just like the blade of a hockey stick.
We all do this. Entrepreneurs can’t help themselves. We’re too optimistic. We create spreadsheets, make projections of how we’re going to add customers every month, every quarter, and add new products or raise prices.
So we’ll continually sell more and earn more. Then, when we look at it and say, “that’s too good to be true,” we create additional models.
“I’ll create a conservative, a realistic and an aggressive projection,” we tell ourselves. So we do.
And then we get on to running our businesses.
And find that, almost always, our plans were flat out wrong.
These over-the-top business plan templates may be helpful if your business is raising capital. Or if you’re seeking serious lending, I’m sure your lender will require it. But, for 90% of us, at least, they are a waste of time.
So, today, I’m going to walk you through a simple planning guide that will help you answer everything that’s important, and chart your farm down a successful path. And, get this—you only need to answer eight questions! That’s it, 8 questions and you’ll have your business strategy laid out.
But before I walk you through those questions and the one-page business plan, let me go through a few reasons for why I don’t think you need to waste time on traditional business planning.
- The first reason is that focusing on a business plan may interfere with you ever having a business. Why? Because spending too much time planning can lead to paralysis by analysis . I’ve seen LOTS of folks who wanted to start a business, farm or otherwise. So they set to writing a business plan, usually with one of countless business plan templates. Then the would-be entrepreneur writes a first pass, and edits, tweaks, tweaks, tweaks and basically falls into a loop of ready, aim, aim, aim, aim, aim, aim—and they never get started . And you want to avoid anything that impedes your ability to start with your business. So, do you think I’m saying you shouldn’t plan a strategy for your business? Of course not! What do you think I am, crazy? No, you should have a plan. But it should be a very simple, actionable guide more than a plan, and I’ll walk you through exactly what you need in a moment.
- Another reason you don’t want to waste time on a long, drawn-out business plan is that businesses NEVER go as planned. You know that. You win, you lose—you have big advances and big setbacks. So you pivot, make adjustments and figure things out as you go. Look—businesses are dynamic and ever-changing. But business plans are static in nature and lack flexibility. So what the hell good are they unless you’re gonna go in and change them every week? And if you are, what do you need the plan for anyway? Just make the necessary changes to your business and get on with it.
So, if you don’t need a traditional business plan, what do you need? In football, you need a game plan, of course. For your farm, I think you want to start with a one-page business plan. If you’re part of the Small Farm Nation Academy , you’ve no doubt seen my lesson on this and have probably created your own.
Read my book on Amazon, the 1-Page Strategic Plan, a step-by-step guide to building a profitable and sustainable farm business .
For now, let me just describe the process. And I’ll dispense with all the gobbledey gook and business jargon. Let’s just concentrate on the EIGHT key questions that I think you need to answer.
These 8 questions make up the grid of the one-page business plan. Picture a 3X3 grid. The 8 questions fill those boxes, surrounding you in the center box in the grid and your ultimate competitive advantage.
So here are the 8 questions you want to ask yourself.
- Why are you farming? This is your mission. You want to ask yourself, what am I passionate about? What are my goals? What do I hope to accomplish with my business? WHY is this important? Your personal answers to these questions will galvanize into your mission. When you answer them clearly and honestly, you’ll know exactly why you want to start your business.
- Who will care and why? These are your customer segments, the folks who will buy from you and support you. Here’s what you want to answer. Are you targeting a local, regional or national market? If you’re targeting a niche, what niche are you targeting? And rather than thinking of an ideal customer, what do your target customer segments have in common? What do they each want from you? Is your customer the end user…the consumer? Or is it a wholesaler, distributor or retailer? Do your target customers need education…in other words, do they already know they have a need for what you’ll offer, or do you need to make them aware and educate them?
- How will you go to market? As a farm business, you’ll have many options. Will you sell via farmers markets, a farm stand, online with e-commerce, via distributors, to restaurants, via a CSA or buying club, or what? Importantly, is your distribution channel aligned with your chosen competitive advantage? We’ll get to that in a moment.
- What will you sell? These are your revenue streams; your products. So, you want to answer, what products will I sell? How will I price them? How does my pricing strategy compare to competitors and alternatives? Will I have one fixed price per product or product unit (per pound, for instance)? Or will I offer discounted prices for larger orders?
- What is your cost structure? Here you want to ask yourself, what are the critical costs in my model? What are the most important metrics? How will I measure those metrics daily/weekly/monthly? What key resources could increase in cost that I have no control over? Feed costs, for instance. How can I respond if costs increase? What are my fixed costs that I can’t reduce or eliminate? What variable costs can I manage?
- What alternatives are there to you? This is where you assess the competitive landscape. Ask yourself, how do I define my marketplace? Who else offers what I will offer in my marketplace? Those are your direct competitors. It could be a grocery store, even though your farm business looks nothing like a grocery store. Also ask yourself, who are the indirect competitors—the alternative choices my customers have? Who are the potential new competitors that could emerge?
- What determines your success? These are your critical success factors. Here you’ll want to answer, how can I effectively attract customers? Will customers pay the prices I need? Can I navigate regulatory hurdles? Do I have the necessary legal structure, accounting and insurance in place to protect myself? Can I produce a product consistent with the quality I’m promoting? Do I have access to contingency and funding resources should I fail to achieve projections?
- How is your farm business unique? This is your defensible competitive advantage. This is really important and I want you to address this before ever starting a business. Choose your desired advantage, then execute to make it a reality. Here you’ll ask, what is my defensible competitive advantage? By defensible I mean just that. What advantage can you create over competitive forces that you can DEFEND. For example, if you start a local pastured poultry business and offer fresh, pasture raised chickens, can you defend that as an advantage? I’d say, NO, you can’t. Because what’s to stop someone else from popping up and doing the same the moment they see how successful you are. You also want to ask yourself, “am I executing a value strategy (high price, differentiated offering) or a cost strategy (low price, low costs). That’s a hugely critical question because you must choose between the two. Finally, ask yourself this. Why will customers choose me over competing alternatives (other farms, supermarkets, growing their own food, etc)? Why? When you answer these questions, you’ll know your competitive advantage and why you’ll be successful, even before you start. And if you can’t answer them, you’re not likely to succeed.
So, those are the 8 questions. And you can answer each of them and all the sub-questions I just listed on a one-page business plan like the one I’ve created for you.
This plan is important…kind of like the blueprint to your house. It doesn’t mean you can’t refine it later, but I can’t think of anything more important to the success of your farm business than thinking through these key questions and arriving at how you will achieve your competitive advantage.
Again, if you’d like to watch a video of me taking you through this exercise, and get your own free one-page farm business plan template, just hop over to smallfarmnationacademy.com and sign-up for the FREE training series.
I hope you sign up and get it. This one-page business plan will simplify your business strategy and force you to focus on what’s really critical to your success.
Grab it now at smallfarmnationacademy.com , and position yourself to get growing.
Thanks for Listening!
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- PLEASE LEAVE A REVIEW for Small Farm Nation on iTunes .
Thanks for listening. Until next time!
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