Building a Business Plan for Your Farm: Important First Steps
This paper provides some detail to assist managers and other stakeholders in taking what many consider to be the first steps of putting together a formal business plan. Referring to my example business plan outline (available on the web at www.agmanager.info), this paper basically covers the “description” section and sets the stage for the remainder of the process. Remember, the business plan is intended to be a written summary of what the organization hopes to accomplish, and how it intends to accomplish those dreams. Given that, one of the first considerations in beginning to formalize a business plan is the principle audience for the plan.
Different “stakeholders” may have an interest in the business plan of a particular organization for very different reasons. Certainly, for the management team itself the most comprehensive version fo the plan provides a blueprint or roadmap to help in accomplishing the goals and objectives of the organization. Debt providers (bankers) are interested in a demonstration of the ability of the business to pay principle and interest, and a demonstration of the organization’s strategy for dealing with financial risk. Equity providers (investors) look for the plan to demonstrate an ability to generate acceptable profit levels (return on their investment) over time. Finally, there may be incentives available, or regulations in place associated with the development of “nutrient management” plans, “water quality protection plans”, or a wide variety of very specific documentation of production practices. Government and other regulatory agencies may be interested in those aspects of the overall plan. The interests of all potential stakeholders may be addressed in a very comprehensive master business plan. It may, however, be appropriate to develop audience specific versions of the overall business plan to better meet the needs of particular stakeholders. Keep the primary audience in mind as the overall plan, or variants of the plan are developed.