Writing a farm business plan shouldn’t seem like a mountain to climb. You know your business better than anyone else, all it takes is to just make a start. Put pen to paper and scribble down some notes, or add them to the notes app on your phone as you think about them. Putting your ideas or goals for the future down somewhere is all it takes to begin, and eventually you will have the bones to begin putting together your business plan.
A business plan can help you outline the direction of the business and the actions that will help you to achieve it. It can also be used to help secure financing and investment. Unfortunately, business plans aren’t a set and forget kind of thing, and you will need to continue to review and update it on a regular basis, as your business changes and evolves.
Your business plan can be as complex or as simple as you like, adding in as much detail as makes sense for your farm. It can be a one-page document or you can go into great detail and really think about what steps you are going to take, assign some key performance indicators to your goals and develop an extensive strategy for your farm business. Neither options are incorrect, but the intended use of your business plan will help to define how detailed it needs to be.
We have put together some of our top tips on writing a business plan, and some of the things you might need to think about for your business.
- Vision and goals – identify your business vision and goals. Ask yourself – “Where do I see myself in 5, 10, 20 years time? Where do I see my business?” Do you want to grow a large farm with multiple enterprises and a large asset base? Or do you want to have a farm business which allows you the flexibility to spend more time with your family? Are you planning on handing the farm over to your children one day in the future? Write down what you want to see for the future of your business, and use that to help define your vision and goals. You could also draw a picture of what your farm will look like. Stick figures acceptable!
- Think about your passions – What is it about farming that you are most passionate about? Where do your interests lie? Does your business reflect what you care about the most? Identifying the parts of farming you love can help you reflect on what direction you want your business to go in.
- Conduct a SWOT analysis – use a SWOT analysis to help identify where your business’s strengths and weaknesses lie, what are some opportunities to grow and what are some of the threats which could have an effect on your business. Sometimes it can be hard to recognise some of the pitfalls of your business when you are so close to it, or what some of the threats to your business might be. Having conversations about this with other people in the business or members of the family is a good way to identify these.
- Keep good financial records – profit statements, cash flow budgets and balance sheets help to analyse the performance of your business, and trading accounts need to be kept accurate.
- Use your projected budget to help inform decisions – when putting together a projected budget think of the best, most likely and worst case scenarios which can happen to your business. This gives you a critical way of looking at decisions you make for your farm, and is known as informed decision making.
- A marketing strategy or plan doesn’t need to be complicated – what is the product/s you are producing and where are you selling it? A SWOT analysis can help with identifying any gaps or anything that is not working well in your marketing plan.
- The business environment doesn’t mean the location of your farm – business environment isn’t referring to geographical environment, it refers to the external factors which have an effect on your business. These are often out of your control, but you need to think critically about how these factors can and will impact on your business.
There are an abundance of templates available online to help you set out your business plan, but they may not work specifically for you. You don’t need to completely stick to a template. Find one which best suits your business and edit it from there. Some suggested topics to include in your business plan are:
- Business structure/outline
- Vision & goals
- People management
- Business environment
- SWOT analysis
- Risk management
- Marketing strategy
- Financial analysis & projected budgets
Business Victoria have a short animation on How to write a business plan
Using a decision tree can help you make a decision that you might be on the fence about.
Thinking about succession planning can help you thinking about succession if your vision and goals have identified that as something to think about for the future
Tips on approaching the bank has some great tips if you are looking to use your business plan to secure finance.