business plan for agricultural sector

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Agribusiness Planning: Providing Direction for Agricultural Firms

Introduction

Future outcomes are a function of today's decisions. Although there is a high degree of randomness and uncertainty associated with the future, you can increase the probability of a successful outcome by planning ahead. This is true in nearly every aspect of our lives, both personal and professional. For those who operate their own businesses, planning becomes increasingly important because the personal and professional aspects become more difficult to untangle. In agricultural businesses, planning may be even more vital because of the inherent uncertainty associated with agricultural production. Some important sources of uncertainty include production risk, price risk, financial (or interest rate) risk, and changes in government programs.

This publication discusses the importance of business planning for agricultural firms—from input suppliers to producers to processors—and describes the steps required to prepare a thorough business plan. The general process of business planning is the same for each type of firm. However, each may have differing individual aspects that affect its plan's contents. Regardless, we present a recommended format that should be useful for all types of agricultural firms as they develop written business plans. We use examples from the wide variety of agribusinesses to provide a broad context to the general theme of business planning.

About the Business Plan

One of the most important documents for any business is their business plan. It is common practice for consultants, lenders, potential business partners, and other business-associated individuals to request a business plan to make a more informed decision concerning their relationship with a business. However, business plans have many more direct benefits for the business owner. The planning process forces owners to systematically consider all facets of the business. In so doing, they become more knowledgeable of the business, the industry, and the market environment in which their business operates. The process also helps to define business goals and to assess the impact that uncertainty may have on future business outcomes. Perhaps most importantly, the written plan provides a well-defined direction for the business. Therefore, it can be used to keep all employees moving toward the common goals established within it.

Completing a business plan can be a time-consuming activity, but well worth the effort. Because businesses operate in an ever-changing environment, the plan should be revisited periodically to be sure that the business is headed in the proper direction or to formally alter the firm's course if circumstances dictate that this is necessary. Again, the systematic review of the business plan forces the owner, and potentially others, to look at the business as a whole and make better-informed decisions.

We provide an example format for you to use as a guide in developing your plan. Notice that there are several topics that should be addressed, corresponding to the four functional areas of management: marketing, production, finance, and human resources. By developing a section for each of these topics, the plan will be easy to follow as you revisit it or as others review it. You should take some liberty as you develop your plan; feel free to customize it in a way that will fit your specific circumstances.

SWOT Analysis

Performing a SWOT analysis , which stands for strengths, weaknesses, opportunities, and threats, lays the foundation for the business plan. Four separate SWOT analyses should be performed, each related to one of the four functional areas of management: marketing, production/operations, finances, and human resources.

When assessing strengths and weaknesses, the focus should be internal. Opportunities and threats, on the other hand, should reflect external factors. For example, proximity to a major market, such as a large city, may provide an opportunity to market processed dairy products directly to a restaurant. Threats may take the form of new competitors or changes in agricultural production or environmental policy.

 Performing SWOT analyses is relatively easy. Simply divide a piece of paper into four quarters, label the quarters appropriately, and begin to write your thoughts down.

Example Marketing SWOT Analysis for Carl's Custom Crop Scouting

• Only specialized scouting operation in the county
• 3,700 acres under contract
• No full-time sales person

Opportunities

• Expand operations to include planting and harvesting
• Partner with firm that only plants and harvests crops.
• Genetically modified corn kills insects. Scouting for those pests no longer important.

Because this is the foundation on which the planning process is based, be sure to take a broad perspective. In addition to incorporating the views of at least the owners and managers of the operation, it also might be a good idea to allow all employees, or at least a subset, to provide their perspectives. Some firms may also benefit from allowing professional advisors (such as veterinarians, bankers, nutritionists, etc.) to provide input. Although the top management should develop the plan, you should tap many sources of information. Finally, the raw results of the SWOT analyses might best be presented in an appendix, rather than in each of the four sections related to the functional areas. In the individual sections, a summarized version will suffice.

Example Business Plan Format

The format presented here represents one way to structure the business plan.

Sections of Business Plan

Marketing management, production/operations management, human resources management, financial management.

As noted, it covers the four managerial functional areas. We present the example structure and provide some ideas for what you will want to include in each section. Creating a thorough document the first time through is important. This will make follow-up revisions easier to implement.

The introductory section gives a broad overview and background of the business. Several subsections (outlined below) should be included to provide a thorough overview. However, if there's something that you feel isn't applicable to your business, feel free to omit it from your plan.

The first page should give the name of the document, the firm's name, and the names of all those involved in developing the plan. Dating the plan so that you can remember when it was developed or updated is also wise.

Executive Summary

This section, while appearing at the front of the business plan, is actually the last piece developed. Here you should present the most important information, which may include the firm's goals and objectives and associated target dates. Basically, the executive summary provides a concise overview of the business plan.

Table of Contents

The table of contents should provide the titles of all section headings in the plan and the page numbers on which the sections begin.

Vision and Mission Statements

These relatively brief statements tell the reader why the business is in operation and where the management team, or owner(s), plans to be in the future. The vision statement should tell the reader what business the firm is in, or plans to enter, and what the most important business goals are. That is, it should tell where the firm is going.

We have provided a few example vision statements for you to use as a guide when developing yours:

Example Vision Statements

Agchoice farm credit.

AgChoice Farm Credit will be the first choice for financial services that help customers succeed.

To build the world's first truly global securities market. ... A worldwide market of markets built on a worldwide network of networks ... linking pools of liquidity and connecting investors from all over the world ... assuring the best possible price for securities at the lowest possible cost.

Northwest Airlines

To build together the first choice airline and global alliance network with the best people each committed to exceeding our customers' expectations every day

Whenever dairy farmers have a need they should think first of DeLaval. We aim to always be there, always be available, always work on their behalf.

Note that some are from very different industries. Regardless, they present a common theme of what their respective companies want their firms to be.

The mission statement provides a succinct overview of the firm's operation, including its collective values, its unique circumstances or industry position, what product(s) it sells, and why it is in business. As the business evolves, the mission statement can be adapted to reflect the changing face of the firm.

The mission statement can provide more detailed information than the vision statement. We have provided some example mission statements that allow you to see how other firms— although maybe very different in nature—have defined their missions.

Example Mission Statements

Agway cooperative.

AGWAY is a farmer-owned business dedicated to improving the profitability of its members. We achieve profitability for our members by being the most effective partner on every farm we serve, by adding value to what farmers produce, and by using our capabilities to win non-farm customers.

Land O' Lakes

We are a market- and customer-driven cooperative committed to optimizing the value of our members' dairy, crop, and livestock production.

To enable people and businesses throughout the world to realize their full potential.

To help practically anyone trade practically anything on earth.

Some are more specific than others. At a minimum, the mission statement should tell the reader why you are in business.

Business Organization

Briefly describe how the business is legally organized (for example, proprietorship, partnership, or corporation). Include the names and titles of the firm's managers (or board of directors). This section should be quite short.

Overview of Current Business

In general, the business plan is concerned with the firm's future. Here, however, you should review the firm's past and fully describe its present position. Although a business start-up may not have much to reveal, documenting the present situation is important. In doing so, it will be easier to document the firm's history as you revise the plan.

An overview of the firm's past helps to set the context of how the firm has evolved into its current form. This may be particularly useful if the plan is to be used to secure financing because the past reveals something about how the firm has been managed over time. A structured chronology can serve as an outline for this subsection.

Example Firm Chronology

“Hanks' Harvesting" formed as partnership between Jerry and Ed Hanks.

Harvested 4,300 acres of corn for grain and chopped 2,200 acres of corn silage.

Purchased a new combine and a used chopper.

Harvested 8,700 acres of corn for grain and 5,300 acres of corn silage.

January 2002

Contracted for 10,500 corn grain acres and 7,800 corn silage acres for fall 2002.

Began to investigate custom planting services as a possible expansion of current operations.

The narrative in this section should also provide an overview of how the business has been financed. Furthermore, discuss how profits, equity, and other important financial measures have changed over time.

Next, describe the present situation of the firm. You should provide information related to business location (include pictures if you like), current sales, assets, inventories, geographic market area, number of employees, and any other information you feel is appropriate in describing your current business. Upon reading this section, one should have a snapshot picture of your firm's current status.

This and the three sections to follow provide the meat of the plan. These give the reader a thorough understanding of the firm's present and future. In the marketing management section, you should address several key factors, each in its own subsection.

Marketing SWOT Analysis

Provide a brief overview of the main results of the Marketing Management SWOT analysis. Let the reader know what the most important results were.

Products and/or Services Produced

Here, describe your product(s) or service(s) specifically. If you are in the custom heifer raising business, for example, your statement may be something similar to “We raise heifers for dairy producers." If you are operating a dairy farm, your statement may be much more detailed because it is recommended that you include both the products you produce and the products you sell, listed separately. For example, you may produce corn silage, but may not sell it. Remember also that you sell bull calves and cull cows. These may not be your major enterprise, but should be listed as products sold.

Remember that differentiating your product may be an important aspect of your marketing strategy. While this is difficult to do with a commodity, it's not impossible. For example, maybe you feed for high-butterfat percentage to increase the price received for your milk. It's also possible that you operate an organic turkey farm in an attempt to extract higher market prices. There are also those who market kosher meats and dairy products. These types of efforts should be included here as part of your marketing efforts.

Industry Overview and Position of Firm

Describe your industry and how you fit into it. This may not be too difficult to write if you operate under contract production because this is specified in the contract. It may also be relatively simple for anyone producing a commodity and selling it by the typical means (such as selling corn to a grain elevator or hogs to a pork processor). A custom business operator may have a more difficult time defining the industry and describing how the firm fits. However, this section is important for at least two reasons. First, it forces the planner to analyze the industry and determine the firm's relative position in terms of competitive advantages. Second, it provides important evaluative information for “outsiders" to better understand the business and its relationship with the industry.

In describing the industry, include as much information as you feel is necessary to define the firm and the market. Consider including the following: volume sold (in production units -- this may be, for example, hundredweights if describing the dairy industry, head if describing beef, or acres scouted if describing a custom crop scouting operation), total annual sales in dollars, trends in industry sales, competitors, new marketing opportunities, prevailing prices, and how prices are determined (for example, cash market, contract price, cost-plus). Also, describe the customer. Who is purchasing your product? What type of person is likely to buy your product? Again, those selling an undifferentiated commodity may have little to write. Those selling custom services or, even more importantly, those engaged in marketing agricultural products directly to the consumer may need to more thoroughly describe the customer base. This will help you better define your target market.

Managerial Expertise

Here, take stock of the total managerial expertise used by the firm. What marketing-related special knowledge do the managers possess? Is there one manager who has particular expertise in marketing? Thinking beyond the organization is wise; those in production agriculture have other sources of knowledge that may exist outside of the firm. For example, consultants may be available to provide information related to the current economic situation and outlook. Also, the Extension system and the USDA provide a great deal of information and data on agricultural prices and marketing.

Marketing Strategy

This is where you lay out your plan and future expectations, which are founded on all of the preceding information in this section. Here, you should describe any marketing opportunities you face and how you plan to take advantage of those. What advertising or promotional programs will you undertake? How will you distribute your product? How will you determine if your marketing plan is successful? For this, you should have clearly defined targets. For example, “We will market at least 2.5 million pounds of milk each year." You may also want to set targets for number of customers, market share, or any other measure(s) that you might use to determine whether your firm has been successful in marketing.

Finally, be sure to employ any appropriate risk-management tactics. In marketing, you will want to manage risks associated with input and output prices. Can you contract for some inputs to lock-in a particular price? If processing on the farm, have you contracted with a retailer or wholesaler to be sure that someone will take your product? In production agriculture, the farm owner or manager should understand and analyze futures and options markets as tools to manage price volatility. You should also understand any relevant government programs such as Loan Deficiency Payments (LDPs) that affect your price.

(We differentiate “production" and “operations" based on whether the firm's product is a good or a service. However, in many cases, we use “production" to denote either case.)

Through the production of goods and services the firm generates profits. Therefore, assessing the production/ operations process and making plans for the future is vitally important. This may be particularly important in cases where a farm is planning to expand or where a change in business enterprises is to occur.

Production SWOT Analysis

Provide a summary of the SWOT analysis for production/operations. This may be the most important area to gather input from employees, who are likely the ones most closely associated with daily production. Therefore, their insights could provide a valuable additional perspective.

Overview of Productive Assets

Outline what productive assets are necessary to make your product or provide your service. The following deserve particular attention:

• Other Facilities (particularly if on-farm processing is involved)
• Equipment and Machinery
• Materials and Supplies

Focus on what the firm currently owns, the quality of those assets, and how others will be obtained, if needed. Only discuss the resources needed. Save any discussion of financing these assets for the Financial Management section.

Here again, note the special expertise held by management in the area of production/operations. For example, is the herdsman on a dairy farm trained in dairy science? Does the crops manager have a background in agronomy, soil science, or other related field? How many years of experience in this type of position does this person have?

Production/Operations Performance

Describe your current production practices. How much do you produce? When do you produce it? You may want to develop a visual approach to help tell this story. A time line could help to describe when products are made or services are sold. The more complex the business is, the more useful a visual might be.

Regulatory Considerations

Government regulations affect production in many industries. This is particularly the case in production agriculture. If producing agricultural products, be sure that you are complying with all relevant regulations. These include, but may not be limited to:

• Manure management
• Soil conservation
• Worker Safety
• Inspections of the product and of the production facilities

You can gain information on relevant policies and regulations from business consultants, Penn State Extension, agricultural cooperatives, and government agency Web sites.

Production/Operations Strategy

Now that you have laid out your current production practices and defined some firm and industry trends as they relate to some important benchmark measures, it is time to describe your production- or operations-related plans. As you do this, be sure to set specific production goals, outline potential changes in enterprises or production practices, and describe how you plan to locate and purchase inputs. The following list of questions may be useful to you as you develop this section. Again, not all are relevant for all types of operations. Also, you may think of others that should be addressed.

• How long will your current productive assets be of use? When do leases on land and equipment expire? How soon can you expect to replace important machinery and equipment?
• Where can you find other inputs, such as feed, in the future—particularly if you are expanding your operation?
• Should you consider hiring a custom operator to perform a portion of the production tasks?
• Are there new production practices or machinery you should consider adopting?
• How many units of product do you want to sell over your planning period? Provide specific targets and a time line, if appropriate.
• Do you need to develop a nutrient management plan or update an existing one? Are there other environmental plans that should be developed?
• If expanding, how will new construction or other changes affect output? How will these changes affect your resources? Will you be able to operate in a timely manner without affecting the quality of your product(s)?
• Are there new enterprises that should be explored?

One of the most important—yet most often overlooked—inputs is labor. The competency of your human resources may dictate how successfully your business will perform. Use this section to outline your current human resource (HR) policies, how these may change over the planning period, and what you or other managers may need to do to improve HR management.

Human Resources SWOT Analysis

Provide the reader with the summarized results of the human resource management SWOT analysis. This is another point at which the insights of the employees may be particularly useful. Their perception of your HR policies could be substantially different from yours.

Organizational Chart and Related Information

Begin by providing a current organizational chart. When doing so, you should follow very distinct guidelines. However, our example chart (Figure 1) should provide enough guidance to help you if you've not yet developed one. If your organization is particularly large, you may lump several individual positions into one box, as long as the box describes those positions. In Figure 1, for example, the three parlor operators might be represented by only one box if their job descriptions are the same.

The organizational chart allows the employees to see their position in the firm. Also, the chart should show that each person has only one immediate supervisor. We cannot stress this point enough. Defining the managerial structure so that employees directly answer to only one person is very important. Often the partners who own the farm tend to supervise employees together. This results in a situation in which the employee may get conflicting directions. If the employee has only one direct supervisor, this situation can be avoided.

Overview of Current Policies

Whether formalized or not, your firm has HR policies. While we encourage you to formalize those if they are not already, you should complete this section with the most accurate information you have at your disposal. Think about the following individual points as you consider what you would like to include in this section. Also, remember to include information regarding all employees of the business, including the management team.

• Compensation and Benefits (Incorporation of this information may dictate that a portion of the plan be labeled as confidential. Thus, only certain members of the ownership or management team would have rights to view this type of information. you are trying to hide information.)—How much do you pay your employees? At what intervals are they paid (for example, weekly or monthly)? What sort of benefits package is offered? Does the package differ by type of employee? Do you have an incentive plan for employees? Are owner/ operators paid a salary or do they capture retained earnings?
• Job Descriptions and Recruiting — Does each position have a written job description? Are these used to assess the suitability of potential employees? How do you recruit new workers/managers? Provide written copies of job announcements and descriptions in an appendix.
• Training and Standard Operating Procedures —What training is provided for new employees? What training is provided when employees assume new responsibilities? Are common task sequences documented with written standard operating procedures (SOPs)?
• Performance Evaluation and Performance Feedback —Is there a formal mechanism for evaluating workers' performances? If so, how frequently is performance assessed? How does the employee receive the manager's assessment? Are salaries or wages based at least partially on these evaluations?

Penn State Extension provides materials to help develop job descriptions, SOPs, and other important HR documents. Business consultants with expertise in HR management should also be used in many instances to help the business owner develop the best HR policies possible for that particular business.

Human Resource Strategy

Once you have outlined your production and marketing plans, you must evaluate the ramifications of those plans for the firm's human resources. Will the plan require any shift in HR policy? If so, how? For example, an expanding custom heifer grower may need to hire a full-time nutritionist to be sure that the heifers are receiving a properly balanced ration as they develop. The best way to reflect these changes may be to provide one or more additional organizational charts showing how the organization is expected to change over time. In the text, be specific as to what changes are to be made and when.

Also, be sure to describe any changes you plan to make in your HR management. If you don't have formal job descriptions, standard operating procedures, or evaluations, for example, you should consider putting those in writing. Also indicate if the plan will require additional training of existing and new employees. Finally, if expanding, describe where you might find potential employees.

This section is the most crucial from a potential lender's perspective. Here, you should tie together the details in the rest of the plan in terms of how they affect the firm's financial performance. Ultimately, operating a business is about making money. Therefore, this section needs to allow the reader to assess where the firm is and where it intends to go over the planning horizon. Although you should provide current and projected future (“pro forma") financial statements with the plan, they might be best presented in an appendix. This section should be mostly a verbal explanation of the business's finances, with perhaps a few tables to highlight important information.

Because this section is so important, especially if financing is being pursued, we highly recommend that you work with a business consultant, accountant, or other financial advisor to develop it.

Financial SWOT Analysis

Perform a SWOT analysis of the firm's financial position. Unlike some other areas, your frontline workers may not have as much to provide in this analysis. However, depending on the firm's “culture," (the accepted values and norms under which it operates. Some firms may be quite “laid back," allowing employees a good bit of decision-making authority. Others might be more “straightlaced" following a well-established set of rules, whether written or unwritten) you may still want to invite their input.

Review of Current Financial Situation

Here you should highlight the important points of your financial statements (income statement, balance sheet, and statement of cash flows). Focus on the positive aspects, while not ignoring the negative. You do not want to provide a potential lender with an impression that you are trying to hide information. It might help if you work with a financial advisor to develop this narrative.

Provide a table of current outstanding debt. Include the terms of the debt, the lender(s), the principle amount(s), your payment amount(s), how frequently you make payments, and how many payments remain. Furthermore, a table of financial ratios would be useful in providing a snapshot view of the firm. You will want to provide measures of profitability, financial efficiency, liquidity, and solvency. Although your financial advisor may have some specific advice, we provide a few commonly used measures, which are defined in the glossary:

Commonly Used Financial Measures

Profitability.

• Rate of return on assets
• Rate of return on equity
• Profit margin

Financial Efficiency

• Asset turnover ratio
• Operating expense ratio
• Current ratio
• Working capital to value of production ratio
• Leverage ratio
• Debt to asset ratio

Provide other sources of managerial decision-making input. For many farm owners, this is the most difficult facet to monitor. Using a business consultant, a CPA, or some other financial advisor may increase farm profits as you allow some of these individuals to help analyze financial data and make recommendations for you to review.

Financial Strategy

At this point, you need to set forth your plan for financing the firm's operations over the planning period. Where will you get money when you need to purchase a new truck or replace your barn, for example? Present the highlights of the pro forma financial statements as discussed earlier. Also, you should relate your financial plan to your production, marketing, and human resources plans. A time line relating events planned in the other sections to financing may help to clarify this section's message for the reader.

In your discussion, be sure to let the reader know how you will assess financial performance. As in other sections, be specific. Will you require that net income grow at 8 percent per year, for example? Set goals for the measures you have used previously to describe the health of the business. Therefore, you should aim for specific values for your selected measures of profitability, financial efficiency, solvency, and liquidity. Also, do not forget that an information management system should be in place so that the financial data you gather is accurate. (An information management system (IMS) is any system that you can use to track important information regarding financial performance, in this case. Actually, you should have a system of information management that provides high-quality information for each of the four facets of management. This might include a production record-keeping system (DHIA for dairy farms), an accounting system, an inventory list, employee time sheets, and so forth.)

You should be realistic with your plans, yet push yourself. Stated differently, you should plan to succeed, not just survive. If your business is to be viable over the long term, then you should generate returns to grow the business, grow equity, improve your credit-worthiness, and otherwise improve the odds of operating this business well into the future. If the plan covers a major shift in the business's operations, such as a large expansion, then special care is needed to discuss how cost overruns might be handled, when production will begin in a new facility, when debt repayment will commence, and so forth. Although the planning process should reduce the amount of uncertainty associated with such a change, it can never eliminate uncertainty. Therefore, it should be noted that insurance may be used to protect the firm against financial losses that may be associated with operating a business. Be sure to define your insurance needs in this section of the business plan.

Uncertainty should also be accounted for in your financial forecasts. Let the reader know what assumptions you have made when developing the proforma statements. Also, some sensitivity analyses would be useful to show how your statements would change if output or input prices were different from your projections. If appropriate, set forth some contingency plans to be enacted if certain undesired outcomes are realized. For example, if milk production suffers from a hot, dry summer, you should have a contingency plan in place to help cash flow the business until production increases. For example, such a plan might include a revolving line of credit with the local bank.

The body of your business plan should have a final section in which you again tell the reader the highlights of the plan. Highlight the most important features of your plan. Restate your most important goals and briefly mention how you will achieve them. Here again, a time line might help to state what your goals are and when your firm expects to reach them. Remember, you have already provided many details, so keep this section relatively brief, referring the reader to earlier material where necessary.

In this section, draw focus on what your plan means for future profitability, efficiency, liquidity, and solvency. That is, all of your plans will likely affect the farm's financial status. Because this is a business plan, and businesses continue to operate only when profitable, this should be the major thrust. However, remind the reader of what may happen if your assumptions, particularly those related to input and output prices and quantities produced, are not realized. Refer to your contingency plans and sensitivity analyses.

If the business is a family-run operation, as many farms and other small agricultural businesses are, then you may want to include some family goals in your plan. Although you should try to separate family issues from business issues to the extent possible, completely divorcing the two is not always possible. Highlight where business success coincides with success in meeting the family's goals.

Finally, a concluding paragraph should draw the plan together and reinforce for the reader that your firm is committed to working collectively toward the plan's goals. Leave no doubt in the reader's mind that, barring detrimental outside influences, the goals of the plan will be reached.

Throughout this publication, we have pointed out some things that you may want to include in appendices. For example, one appendix might contain your financial statements, both actual and proforma, to which you refer in the Financial Management section. You may also want to include the formal job descriptions you have prepared. Use appendices as you feel appropriate. If you would like to include something that may not be relevant for the body of the manuscript to further describe your operation, then include it as an appendix. To differentiate them, give each new appendix a unique name such as, “Financial Statements" or “SWOT Analysis Results."

One of the most important things you can do to ensure success is to plan for the future. The planning process may take many hours to complete, especially if it is to provide a thorough representation of the firm. However, it will be a valuable asset as it forces a review of the firm and the industry, unites the collective labor force of the firm to work toward a set of common goals, and allows outsiders to gain a detailed understanding of the firm's past, present, and future.

Business planning is not applicable only to large firms. Smaller agricultural businesses, which are often family owned, stand to benefit at least as much from planning as do larger firms. In agriculture, especially agricultural production, the small compete directly with the large. Business planning will help firms of all sizes to better understand their relative positions in the agricultural industry. It will also help the owner to set goals and devise strategies for reaching those goals.

Asset Turnover Ratio

The percentage of total assets earned as gross income. A higher number is generally associated with higher profits. Mathematically, this equals gross income divided by average total productive assets.

Balance Sheet

A financial statement that shows total assets, total liabilities, and owners' equity at a specific point in time. The liabilities and owners' equity represent claims on the firm's assets.

Business Planning

The process of analyzing the firm's strengths, weaknesses, opportunities, and threats, using that information to develop organizational goals, and crafting strategies to reach those goals.

Competitive Advantages

Refers to particular strengths of the firm relative to those of other firms. Some examples are being the first firm in an area to provide custom heifer raising, having a manager with strong direct-marketing skills, or having superior land for growing crops.

Contingency Plans

These are strategies for dealing with potential outcomes that differ from those assumed in the initial planning process. These are most frequently associated with unfavorable outcomes.

Contract Production

Refers to any situation in which the farmer grows crops or livestock for a specific firm under terms negotiated in a contract.

The system of offices located around individual states that provides information and education to farm managers and other individuals. In Pennsylvania, this is Penn State Extension.

Current Ratio

Measures the ability of the firm to pay its current liabilities with its current assets. A ratio greater than one indicates that the firm is liquid and able to cover its current liabilities. Mathematically, this is equal to current assets divided by current liabilities. Current assets include cash and other assets that will be converted to cash or used up within one year. Current liabilities are those that are payable within one year.

Custom Business

Any firm offering to perform services for a farm that would replace those already provided by the farm's labor. Some examples include crop scouting services, custom planting and harvesting, or custom heifer growing.

Debt to Asset Ratio

Indicates the percentage of total assets owned by creditors. For example, a debt to asset ratio of 0.5 means creditors own 50 percent of the farm's assets. Mathematically, this is total debt divided by total assets.

Income Statement

Provides a review of revenues and expenses over a given period of time, often a year. This may also be referred to as a profit and loss statement, earnings statement, or an operating statement.

Leverage Ratio

This represents total farm debt as a percentage of equity. If this ratio is greater than one, for example, then the business is financed by debt more than by equity. Mathematically, this is total debt divided by equity.

Mission Statement

Provides a summary of why the business is in operation. This may include the firm's common values, an overview of products or services, target markets, or other information to provide a clear picture of the firm's purpose.

Represents the difference between gross income and total expenses. Mathematically, this equals gross income minus total expenses. A positive number means that the business is making enough to cover expenses and either reinvest in the company, pay debt more quickly, or increase owner incomes.

Operating Expense Ratio

Represents the percentage of gross income used in operating expenses (those expenses on inputs used in the current period). Mathematically, subtract interest expenses from operating expenses and divide the result by gross income.

Organizational Chart

A graphical representation of the formal chain of command for a firm. It shows who the supervisors are and over whom these have authority.

This indicates that the financial statement is a projection of the future. These should be based on the best possible estimates at the time they are put together.

Profit Margin

This shows the percentage of gross income resulting in profits for the firm. Mathematically, find the value of net income plus interest expense minus the value of operator and unpaid operator labor and divide that value by gross income. Interest expense is added back to net income because it represents a return to the debt-financed assets. Removing the value of operator and unpaid operator labor shows that returns must be enough to cover this value.

Rate of Return on Assets

This shows the return to all assets employed in the business as a percentage of the total assets employed. Mathematically, it is found by dividing the numerator of net income plus interest expense minus the value of operator and unpaid operator labor by the denominator of average total farm assets. Interest expense is added back to net income because it represents a return to the debt-financed assets. Removing the value of operator and unpaid operator labor shows that returns must be enough to cover this value.

Rate of Return on Equity

This shows the returns to equity assets employed in the business as a percentage of the equity assets. Mathematically, it is found by dividing the numerator of net income minus the value of operator and unpaid operator labor by the denominator of average total equity assets. Removing the value of operator and unpaid operator labor shows that returns must be enough to cover this value.

Revolving Line of Credit

A type of credit account in which the borrower has a given credit limit which can be borrowed at any time. A credit card or standing account with an equipment dealer are examples of revolving credit lines.

Risk Management

Refers to any attempt to avoid the possibility of unfavorable outcomes under uncertainty. Insurance and buying on futures and options markets to lock in input or output prices are good examples of tools used in risk management.

Sensitivity Analyses

Refers to using alternative assumptions to determine what the outcome of a financial analysis will be if different outcomes are realized. For example, if developing a proforma income statement, using a range of assumptions associated with output prices helps to show how projected net income will change if prices differ from the base assumption.

Standard Operating Procedures (SOPs)

These are written sequences of steps required to perform a specific task. Milking a cow, for example, requires many steps. A written SOP allows the milker to perform this task in the same way every time the cow is milked.

Statement of Cash Flows

This shows cash income and cash expenses over a specified period of time, often a year. These receipts and payments are typically broken into three categories associated with operations, investments, and financing.

A systematic review of the firm's strengths, weaknesses, opportunities, and threats. This is used to draw focus on what the firm does well and what it may be able to do to take advantage of emerging market opportunities.

Vision Statement

Provides a summary of the firm's most important goals. Firms differ with respect to how specific they state these goals in their business plans. We recommend being as specific as you can comfortably be.

Working Capital to Value of Production Ratio

This represents working capital as a percentage of gross income. Working capital is equal to current assets minus current liabilities. Current assets include cash and other assets that will be converted to cash or used up within one year. Current liabilities are those that are payable within one year.

Additional Resources

See the Penn State Farm Management website for other resources that may be useful as you develop your agribusiness plan.

Prepared by Jeffrey Hyde, assistant professor of agricultural economics, and Sarah Cornelisse, extension associate.

The authors would like to thank Todd D. Davis, extension economist at Clemson University, and Richard Stup, senior extension associate with Penn State Dairy Alliance, for their helpful reviews of an earlier draft of this publication.

• Value-added agriculture
• Agricultural entrepreneurship
• Value-added dairy entrepreneurship
• Value-added dairy foods marketing
• Online marketing and sales
• Social media
• Direct marketing
• Farm and ag business management
• Business planning

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12: Business Plans

What is a business plan.

A business plan is a document that helps you to organize and succinctly summarize the vision you have for your business. The plan contains the operational and financial objectives of a business, the detailed plans and budgets showing how the objectives are to be realized.

A good business plan will contain the following:

• Your business vision, mission statement, key values, and goals
• Description of the product(s) you intend to produce
• Strengths, Weaknesses, Opportunities and Threats the business may experience are described
• Production plans
• Marketing plans
• Estimated start-up costs
• Information on your legal structure and management team
• Current financial statements or projected financial statements.
• Resume or brief explanation of your background and relevant experience
• Less than 10 total pages so that people actually read it

Helpful Publications for Writing a Business Plan

General Business Resource Publications:

• Starting an Ag-Business? A Pre-Planning Guide http://publications.dyson.cornell.edu/outreach/extensionpdf/2004/Cornell_AEM_eb0408.pdf
• Business Transfer Guide: Junior Generation http://publications.dyson.cornell.edu/outreach/extensionpdf/2016/Cornell-Dyson-eb1605.pdf
• Producing a Business Plan for Value-Added Agriculture http://publications.dyson.cornell.edu/outreach/extensionpdf/2007/Cornell_AEM_eb0708.pdf
• Business Planning for the Agriculture Sector: A Guide to Business Plan Development for Start-up to Mid-size Operations http://publications.dyson.cornell.edu/outreach/extensionpdf/2010/Cornell_ pdf
• Building a Sustainable Business (Sustainable Agricultural Research Education (SARE)Publications) sare.org/publications/business.htm 280 pages of education and practical exercises to guide you through the financial, management, and interpersonal skills needed to start a successful farm business. Order hard copy for $17 or download PDF online for free.

Cornell Cooperative Extension Publications for Specific Commodities:

• Landscape Business Planning Guide http://publications.dyson.cornell.edu/outreach/extensionpdf/2003/Cornell_AEM_eb0313.pdf
• Writing a Business Plan: A Guide for Small Premium Wineries http://publications.dyson.cornell.edu/outreach/extensionpdf/2002/Cornell_AEM_eb0206.pdf
• Writing a Business Plan: An Example for a Small Premium Winery https://ageconsearch.umn.edu/bitstream/122203/2/Cornell_AEM_eb0207.pdf

Getting Help Writing a Business Plan

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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, get an overview of the beginning farmer's journey , or jump to a different section of the farmer's journey.

On This Page

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.

Business History

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

The Farm Business Plan Balance Sheet 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

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.

Disaster Recovery

Special Considerations

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

Business Planning

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 .

Training Opportunities

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.

Sample Farm Business Plan

Writing a business plan is a crucial step in starting a farm. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring farm business owners, having access to a sample farm business plan can be especially helpful in providing direction and gaining insight into how to draft their own farm business plan.

Download our Ultimate Farm Business Plan Template

Having a thorough business plan in place is critical for any successful farm venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A farm business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The farm business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your farm as Growthink’s Ultimate Farm Business Plan Template , but it can help you write a farm business plan of your own.

Farm Business Plan Example – GreenAcres Harmony

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

At GreenAcres Harmony, we are embarking on an ambitious journey to revolutionize the way Bostonians experience farm products. Based in the heart of Boston, our mission is to provide the community with fresh, sustainably grown produce that not only nourishes the body but also supports the environment. By harnessing innovative farming techniques and a commitment to sustainability, we aim to establish a strong connection with our customers, offering them a taste of what truly fresh, quality produce can be. Our farm is not just a place of business; it’s a beacon for environmental stewardship and a testament to the power of community engagement in fostering a healthier, greener future.

Our journey to date has been marked by significant accomplishments and a clear set of success factors that underscore our potential for growth. Our dedication to sustainable farming practices has not only set us apart in the industry but has also fostered a deep sense of trust and loyalty among our customers. Our strategic location in Boston provides us with direct access to a vibrant and growing market of health-conscious consumers. Furthermore, our team’s expertise in both agriculture and business management has been instrumental in navigating the complexities of the market and positioning GreenAcres Harmony as a leader in the sustainable agriculture space. These factors, combined with our commitment to quality and sustainability, lay a solid foundation for our future success.

The agricultural industry, particularly the segment focusing on sustainable and locally grown produce, is experiencing a significant surge in demand. This trend is driven by an increasing awareness of environmental issues and a growing commitment among consumers to support practices that are beneficial to the planet. In Boston, this shift is particularly evident, with more individuals seeking out farm-to-table experiences and prioritizing the freshness and sustainability of their food. This evolving market landscape presents an opportune moment for GreenAcres Harmony, as our core values and business model align perfectly with the current consumer trends. Our focus on sustainability, coupled with the high quality of our produce, positions us to capture a substantial share of this growing market.

Our target customers are health-conscious individuals and families residing in Boston who prioritize quality, freshness, and sustainability in their food choices. These consumers are typically well-informed about the benefits of locally grown produce and are willing to invest in products that support their health and environmental values. Additionally, we cater to local businesses, such as restaurants and cafes, looking to enhance their menus with fresh, high-quality ingredients. Understanding the preferences and values of our target customers enables us to tailor our offerings and marketing strategies to meet their specific needs, fostering a loyal customer base committed to supporting local, sustainable agriculture.

Top Competitors: – Local Organic Farms: Offering a similar range of fresh, organic produce. – Big Agriculture: Competing on price and scale but lacking in local and sustainable practices.

Competitive Advantages: Our competitive edge lies in our unwavering commitment to sustainability and the quality of our produce. Unlike big agricultural companies, we focus on local, sustainable farming practices that resonate with our target market. Additionally, our direct engagement with the community through farm-to-table events and partnerships with local businesses sets us apart, creating a unique brand experience that cannot be replicated by our competitors.

Our marketing strategy emphasizes the exceptional quality, sustainability, and community focus of our products and services. By leveraging a robust online presence, including social media and a user-friendly website, we aim to connect with our customers on a deeper level, sharing our story and the benefits of sustainable farming. Our promotional efforts extend beyond the digital realm, with community engagement initiatives, participation in local farmers’ markets, and partnerships with local restaurants and cafes playing a crucial role in building our brand and expanding our reach. These efforts are complemented by public relations campaigns and sponsorships of community events, all designed to enhance our visibility and reputation in the market. Through a combination of online marketing, community engagement, and strategic partnerships, we aim to position GreenAcres Harmony as the go-to source for fresh, locally grown produce in Boston.

Our operations are centered around ensuring the highest quality and sustainability of our farm products. Key operational processes include sustainable farming practices, efficient supply chain management, and effective quality control measures. Milestones to be accomplished involve expanding our product range, increasing our market reach through partnerships, and achieving specific sustainability certifications that further validate our commitment to environmental stewardship. These operational strategies and milestones are designed to optimize our farm’s productivity and impact, ensuring that we not only meet but exceed our customers’ expectations.

Our management team comprises seasoned professionals with extensive experience in agriculture, business management, and sustainability. This diverse skill set ensures a holistic approach to running GreenAcres Harmony, from the day-to-day farm operations to strategic business planning and sustainability initiatives. Our team’s passion for sustainable agriculture and commitment to our community’s well-being are the driving forces behind our farm’s mission, guiding us towards achieving our goal of becoming a leader in sustainable farming in Boston.

Welcome to GreenAcres Harmony, a novel agricultural endeavor situated in the heart of Boston, MA. As a newly established farm, we pride ourselves on being a local source of high-quality produce and farm products. Recognizing the scarcity of premium local farms in our area, we have stepped up to fill this vital gap, aiming to serve the residents of Boston with the freshest and finest agricultural goods.

At GreenAcres Harmony, our offerings are diverse and cater to a wide range of dietary and culinary needs. Our product line includes a variety of fresh produce, ensuring that our customers have access to vegetables and fruits that are not only local but also surpass conventional quality standards. In addition to produce, we provide an assortment of dairy products, eggs, and meat products, all sourced from our farm where ethical and sustainable farming practices are paramount. Our apiary also allows us to supply honey, a natural sweetener and a kitchen staple for many of our customers. Our commitment to quality and freshness sets us apart and ensures that every item we sell is of the highest standard.

Located in the bustling city of Boston, MA, GreenAcres Harmony is strategically positioned to serve the local community efficiently. Our presence in Boston enables us to maintain close relationships with our customers, ensuring that we remain attuned to their needs and preferences. This proximity to our customer base is not just a logistical advantage but also fosters a sense of community and mutual support, which is central to our ethos.

Our confidence in the success of GreenAcres Harmony is grounded in several key factors. Firstly, our founder brings invaluable experience from previously running a successful farm, equipping us with the knowledge and skills necessary for our venture. Moreover, we stand out from our competitors by offering fresher and superior quality produce, dairy, eggs, meat, and honey. This commitment to excellence is what we believe will endear us to our customers and ensure our longevity in the market.

Since our inception on January 4, 2024, as a S Corporation, we have achieved several milestones that underscore our potential for success. Notably, we have developed a distinctive logo and company name that reflect our brand’s ethos and values. Additionally, we have secured an ideal location that not only facilitates our farming operations but also enhances our accessibility to customers. These accomplishments, while early in our journey, are indicative of our strategic approach and our dedication to establishing GreenAcres Harmony as a cornerstone of the Boston community.

The Farm industry in the United States is a significant sector of the economy, with a market size of over $400 billion. This industry includes a wide range of activities such as crop production, livestock farming, and agricultural services. The market size of the Farm industry is expected to continue growing steadily in the coming years, driven by increasing demand for food products, technological advancements in agriculture, and government support for the sector.

One of the key trends in the Farm industry is the growing popularity of organic and sustainable farming practices. Consumers are becoming more conscious of where their food comes from and are increasingly seeking out products that are produced in an environmentally friendly and socially responsible manner. This trend bodes well for GreenAcres Harmony, as a new Farm serving customers in Boston, MA, that focuses on sustainable farming methods and offers organic produce to its customers.

Another trend in the Farm industry is the increasing focus on local food production and distribution. Consumers are showing a preference for locally grown and sourced products, as they are perceived to be fresher, healthier, and better for the environment. GreenAcres Harmony, being located in Boston, MA, is well-positioned to take advantage of this trend by providing locally grown produce to its customers and establishing strong relationships with local restaurants, markets, and consumers.

Below is a description of our target customers and their core needs.

Target Customers

GreenAcres Harmony will target local residents in Boston, MA, who are increasingly seeking fresh, locally-sourced produce for their daily nutrition needs. This customer segment values sustainability and is willing to pay a premium for food that is grown in an environmentally friendly manner. By offering a range of organic fruits, vegetables, and other farm products, GreenAcres Harmony will cater to this growing demand among health-conscious consumers.

The farm will also attract families looking for fresh, high-quality ingredients to prepare their meals. Parents concerned with the nutritional value of their children’s diet will find GreenAcres Harmony’s offerings particularly appealing. The farm will tailor its product range to include kid-friendly options, making it easier for families to incorporate healthy eating habits into their routines.

In addition to serving individual consumers, GreenAcres Harmony will target local restaurants and small grocery stores seeking to differentiate themselves by offering locally-sourced, organic produce. Establishing partnerships with these businesses will not only expand the farm’s market reach but also strengthen the local food ecosystem in Boston, MA. This strategy will enable GreenAcres Harmony to become a key player in the community’s sustainable food movement.

Customer Needs

GreenAcres Harmony caters to the growing demand for high-quality fresh produce among Boston residents. Customers can expect a range of farm-fresh vegetables and fruits, harvested at the peak of their ripeness, ensuring maximum flavor and nutritional value. This emphasis on quality meets the desires of health-conscious consumers looking for nutritious food options.

In addition to fresh produce, GreenAcres Harmony provides a variety of dairy products, eggs, meat products, and honey, satisfying a broad spectrum of dietary preferences and needs. Customers appreciate the convenience of accessing a wide array of farm-to-table essentials under one roof. This variety ensures that households can enjoy fresh, wholesome meals, contributing to a healthier lifestyle.

Furthermore, GreenAcres Harmony understands the importance of ethical and sustainable farming practices in today’s environmentally aware society. Customers can trust that the products they purchase are produced with respect for the environment and animal welfare. This commitment not only fulfills the need for responsible consumption but also aligns with the values of many Boston residents, making GreenAcres Harmony a preferred choice for discerning shoppers.

GreenAcres Harmony’s competitors include the following companies:

Wilson Farm is known for its wide range of produce, including fresh fruits, vegetables, meats, and bakery items. They operate on a large scale and their products are available at competitive price points, making them accessible to a broad customer base. Wilson Farm is located in Lexington, MA, and serves the Greater Boston area, attracting customers looking for high-quality, locally-sourced food products. One of their key strengths is their reputation for quality and freshness, as well as their ability to offer a wide variety of products year-round. However, their size and focus on a broad market can sometimes lead to a less personalized shopping experience for customers seeking niche or artisanal products.

Meadow Mist Farm specializes in grass-fed meats, free-range eggs, and a selection of dairy products, including artisanal cheeses. They are based in Lexington, MA, and cater to customers prioritizing ethically raised and organic products. Their products are priced at a premium, reflecting the quality and sustainable farming practices used. Meadow Mist Farm serves a niche market of health-conscious consumers and those interested in supporting local, sustainable agriculture. Their key strength is their commitment to environmental stewardship and animal welfare, which resonates well with their target customer segment. However, their focus on a specific range of products and higher price points may limit their appeal to a broader audience.

Pakeen Farm, located in Canton, MA, offers a unique blend of products and services, including a pick-your-own operation for fruits like apples and pumpkins, a Christmas tree farm, and a farm stand selling a variety of local produce and goods. They serve customers in the Greater Boston area looking for family-friendly agricultural experiences as well as high-quality, locally-grown produce. Pakeen Farm’s pricing is competitive, especially for activities and experiences, which attracts a diverse customer base. Their strength lies in their ability to provide a multifaceted farm experience that combines retail with agri-tourism. However, their seasonal operations and dependence on weather conditions can be seen as a weakness, as it may affect their revenue and customer flow outside of peak seasons.

Competitive Advantages

At GreenAcres Harmony, we take pride in offering fresher and better quality fresh produce, dairy products, eggs, meat products, and honey compared to our competitors. Our commitment to sustainability and eco-friendly farming practices not only ensures the health and safety of our customers but also contributes to the preservation of our planet. We utilize organic farming techniques that enhance the nutritional value and taste of our products, making them superior in every aspect. Our close proximity to Boston allows us to deliver our products fresh, ensuring that our customers enjoy the full flavor and benefits of our offerings. This direct farm-to-table approach minimizes the time between harvest and consumption, which is a key factor in maintaining the freshness and quality of our products.

In addition to our premium product offerings, our innovative business model incorporates a customer-centric approach that sets us apart. We engage with our customers through community-supported agriculture (CSA) programs, farm tours, and educational workshops that foster a deeper understanding and appreciation for sustainable farming practices. By doing so, we not only build a strong, loyal customer base but also create a sense of community around our brand. Our dedication to transparency and ethical farming practices resonates with consumers who are increasingly conscious of the environmental and social impact of their purchasing decisions. Furthermore, our use of technology and data analytics allows us to optimize our operations and tailor our offerings to meet the specific needs and preferences of our customers, providing us with a significant competitive advantage in the Boston market.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

At the heart of GreenAcres Harmony’s offerings is a wide range of fresh produce, encompassing everything from leafy greens to succulent fruits and crisp vegetables. This diverse selection caters to the needs of health-conscious consumers seeking nutrient-rich options. Prices for their fresh produce generally range from $2 to $4 per pound, reflecting both the quality and freshness that the farm prides itself on.

In addition to fresh produce, GreenAcres Harmony provides a variety of dairy products. Their range includes fresh milk, cheese, and yogurt, all produced from cows and goats raised in a natural and healthy environment. The prices for their dairy products are competitive, with milk selling for around $4 per half gallon, cheese priced at $6-$10 per pound depending on the variety, and yogurt at $5 per quart. These products are not only a testament to the farm’s commitment to quality but also to their dedication to sustainable farming practices.

Eggs are another staple at GreenAcres Harmony, offering consumers the choice of purchasing eggs sourced from chickens that roam freely in pastures. This free-range approach ensures that the eggs are not only fresher but also richer in nutrients compared to those from caged birds. The average price for a dozen eggs is set at $5, which is a reflection of their quality and the ethical farming practices employed by GreenAcres Harmony.

For those interested in meat products, GreenAcres Harmony offers a selection of beef, pork, and poultry. All their livestock are raised in a stress-free environment, allowing them to grow at a natural pace without the use of growth hormones or antibiotics. This results in meat that is not only healthier but also more flavorful. The prices for their meat products vary, with beef priced at around $10 per pound, pork at $8 per pound, and poultry at $6 per pound. These prices are indicative of the farm’s commitment to providing high-quality, sustainable, and ethically raised meat to the community.

Finally, GreenAcres Harmony produces honey, a sweet addition to their product lineup. Their honey comes from bees that pollinate the very crops and flowers on the farm, ensuring a product that is pure and of high quality. A 12-ounce jar of honey is priced at approximately $8, offering a natural sweetener option that supports local agriculture and promotes the health of the local ecosystem.

Overall, GreenAcres Harmony’s range of products and services is designed to meet the growing demand for locally sourced, sustainable, and ethical food choices. Their pricing strategy reflects their commitment to quality, sustainability, and the support of local agriculture, making them a valued addition to the Boston community.

Promotions Plan

GreenAcres Harmony embarks on an ambitious journey to captivate the hearts and palates of Bostonians with its array of fresh, sustainably grown farm products. Recognizing the vast potential and the competitive nature of the market, the farm employs a multifaceted promotional strategy designed to create a strong brand presence, foster community engagement, and drive sales. At the core of these efforts lies a robust online marketing strategy, complemented by a variety of other innovative promotional tactics.

Online marketing emerges as a pivotal component of GreenAcres Harmony’s promotional arsenal. The farm will leverage the power of social media platforms like Instagram, Facebook, and Twitter to connect with potential customers, share the farm’s story, and showcase its products through visually appealing content and engaging stories. Email marketing campaigns will serve as a direct channel to communicate with subscribers, offering them exclusive insights, promotions, and updates on the farm’s offerings. Furthermore, a user-friendly website will act as the digital storefront for GreenAcres Harmony, featuring an online shop where customers can conveniently purchase products, learn about sustainable farming practices, and stay informed about upcoming events and workshops.

Yet, online marketing is just the beginning. GreenAcres Harmony will also invest in community engagement initiatives to build meaningful relationships with local residents and businesses. Hosting farm-to-table events, workshops, and tours on-site will invite the community to experience the farm’s operations firsthand, fostering a deeper connection with the brand. Partnerships with local restaurants and cafes to supply fresh produce will not only expand the farm’s reach but also underscore its commitment to supporting local economies and sustainability.

To further amplify its visibility, GreenAcres Harmony will participate in local farmers’ markets and food festivals. These events offer invaluable opportunities to engage directly with customers, receive immediate feedback, and increase brand recognition through face-to-face interactions. Offering product samples and showcasing the quality and freshness of its produce will help GreenAcres Harmony stand out in a crowded marketplace.

Additionally, public relations efforts will play a crucial role in boosting the farm’s profile. Crafting press releases and working with local media outlets to feature stories about GreenAcres Harmony’s initiatives, achievements, and contributions to the community will enhance its reputation and credibility among consumers. Sponsoring local community events and initiatives will further demonstrate the farm’s commitment to giving back and supporting the well-being of its community.

In conclusion, GreenAcres Harmony’s promotional strategy is a comprehensive blend of online marketing, community engagement, participation in local events, and public relations efforts. By effectively implementing these tactics, GreenAcres Harmony expects to attract a loyal customer base, increase its market share, and contribute positively to the sustainability and health of the Boston community.

Our Operations Plan details:

• The key day-to-day processes that our business performs to serve our customers
• The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of GreenAcres Harmony, there are several key day-to-day operational processes that we will perform.

• Monitoring and Adjusting Crop Health: We continuously monitor the health of our crops, using both traditional methods and modern technology. This includes checking for pests, diseases, and ensuring optimal soil conditions. Any issues are addressed immediately to prevent crop loss.
• Harvesting and Post-Harvest Handling: Daily assessments determine which crops are ready for harvest. We then follow strict post-harvest handling protocols to ensure the produce remains fresh and high-quality until it reaches the customer.
• Order Fulfillment and Delivery: We process customer orders promptly, organizing and packing produce for delivery. Our delivery system is optimized for efficiency, ensuring customers in Boston, MA, receive their orders in a timely manner.
• Customer Service and Feedback: We maintain open lines of communication with our customers for inquiries and feedback. This helps us improve our services and resolve any issues swiftly.
• Inventory Management: We manage our inventory closely, tracking produce availability and supply levels to meet customer demand without overproducing. This process includes forecasting demand based on historical data and current trends.
• Quality Control: Every batch of produce undergoes quality control checks to ensure it meets our high standards. This includes visual inspections and, if necessary, taste tests.
• Financial Management: Daily financial transactions are recorded and analyzed. This includes tracking income from sales and managing expenses such as labor, seeds, and equipment maintenance.
• Equipment and Infrastructure Maintenance: Regular maintenance checks and repairs of our farming equipment and infrastructure ensure that operations run smoothly and efficiently without unexpected disruptions.
• Marketing and Promotions: We engage in daily marketing activities to promote our farm and its products. This includes social media updates, email newsletters, and participation in local food markets.
• Compliance and Sustainability Practices: We ensure all farming practices comply with local regulations and strive for sustainability. This involves water conservation, using organic farming methods, and reducing waste.

GreenAcres Harmony expects to complete the following milestones in the coming months in order to ensure its success:

• Secure the Farm Location: Finalize the acquisition or lease of agricultural land within a reasonable distance from Boston, MA, ensuring that the land is fertile and suitable for the types of crops and livestock GreenAcres Harmony intends to produce.
• Obtain Necessary Permits and Licenses: Navigate through local, state, and federal regulations to acquire all necessary permits and licenses required for farming operations, including but not limited to environmental, health, and business operating permits.
• Build and Prepare Farm Infrastructure: Develop the necessary farm infrastructure, including irrigation systems, greenhouses, livestock enclosures, and storage facilities, ensuring that all structures are built to meet or exceed industry standards for sustainability and efficiency.
• Launch Our Farm: Officially start farming operations by planting the first crops and/or acquiring the first batch of livestock. This launch includes initiating marketing efforts to build brand awareness within the target market of Boston, MA.
• Establish Distribution Channels: Forge relationships with local markets, restaurants, and food distributors in the Boston area, as well as setting up an online sales platform, to ensure that GreenAcres Harmony has multiple avenues for selling its products directly to consumers and through B2B sales.
• Implement Sustainable Practices: Fully integrate sustainable and eco-friendly farming practices into daily operations, such as composting, organic farming, water conservation techniques, and renewable energy use, to not only mitigate environmental impact but also to appeal to eco-conscious consumers.
• Reach $15,000/Month in Revenue: Achieve the financial milestone of generating at least $15,000 in monthly sales from the sale of produce and livestock. This goal is critical for demonstrating the farm’s viability and supporting further growth and investment.
• Develop a Loyal Customer Base: Through quality products, excellent customer service, and community engagement, build a loyal customer base that not only regularly purchases GreenAcres Harmony products but also advocates for the brand within their networks.
• Evaluate and Expand Product Lines: Based on customer feedback and market demand, periodically evaluate the farm’s product offerings and consider expanding into new crops, livestock, or value-added products such as jams, cheeses, or meats to diversify income sources and meet market needs. Completing these milestones will position GreenAcres Harmony for long-term success by ensuring operational efficiency, regulatory compliance, market presence, and financial stability.

GreenAcres Harmony management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Chloe King, President

Chloe King, President, brings a wealth of experience to GreenAcres Harmony, backed by a proven track record of success in the agricultural sector. Having successfully managed a farm previously, Chloe possesses a deep understanding of the operational, financial, and strategic facets of running a sustainable agricultural business. Her leadership skills, combined with her hands-on experience in farm management, position her perfectly to steer GreenAcres Harmony toward achieving its mission of sustainable farming and community engagement. Chloe’s ability to navigate the challenges of agricultural business, from crop production to market strategies, makes her an invaluable asset to the team and a key player in ensuring the long-term success of GreenAcres Harmony.

To reach our growth goals, GreenAcres Harmony requires significant financial investment. This funding will be allocated towards expanding our farming operations, enhancing our marketing efforts, and further developing our sustainability initiatives. Our financial plan outlines the need for capital investment to support these areas, ensuring that we can continue to provide our customers with high-quality, sustainable produce while also expanding our reach and impact within the community.

Financial Statements

Balance sheet.

[insert balance sheet]

Income Statement

[insert income statement]

Cash Flow Statement

[insert cash flow statement]

Farm Business Plan Example PDF

Download our Farm Business Plan PDF here. This is a free farm business plan example to help you get started on your own farm plan.  

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How to Create an Agricultural Business Plan

Blog > how to create an agricultural business plan, table of content, introduction, executive summary, company description, market analysis, product/service description, marketing and sales strategies, operational plan, swot analysis, financial projections, funding and investment, risk management, sustainability and environmental impact, legal and regulatory compliance, timeline and milestones, our other categories.

• Company Valuation
• Pitch Deck Essentials
• Raising Capital
• Startup Guide
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Reading Time : 16 Min

Business plan 101.

Starting an agricultural venture is an exciting and rewarding journey, but it requires careful planning and a well-crafted agricultural business plan. This document serves as a roadmap for your agricultural business, outlining your goals, strategies, and financial projections. In this comprehensive guide, we will walk you through each step of creating a robust agricultural business plan to set your venture up for success. Whether you’re planning to start a small family farm or a large-scale agricultural operation, this guide will help you make informed decisions and navigate the challenges of the agricultural industry.

The executive summary is the first section of your agricultural business plan, but it is typically written last. This section provides a concise overview of your entire plan and should capture the reader’s attention. Include the following elements in your executive summary:

• Example: ABC Farms is a sustainable agriculture venture committed to providing organic, locally sourced produce to health-conscious consumers in the region. Our mission is to promote eco-friendly farming practices and support local communities while delivering premium-quality products.

Stellar Business Tips: Keep your executive summary clear, compelling, and focused. Highlight the unique selling points of your agricultural business and how it addresses market demands.

In this section, provide a comprehensive description of your agricultural business. Include the following details:

• Example: ABC Farms was founded in 2010 by John and Jane Smith, who have a combined experience of over 20 years in sustainable agriculture. The business started as a small family farm and has since expanded to a 50-acre organic farm with a diverse range of crops, including vegetables, fruits, and herbs.

Stellar Business Tips: Share your business’s background, founders’ expertise, and growth trajectory. Emphasize your passion for agriculture and commitment to environmental and social responsibility.

Conduct a thorough market analysis to gain insights into the agricultural industry, market trends, and potential opportunities. Consider the following factors:

• Example: The organic produce market has been steadily growing at a rate of 10% per year, driven by increasing consumer awareness of health benefits and environmental concerns. Local restaurants and grocery stores are eager to source fresh, organic produce from nearby farms.

Stellar Business Tips: Use data and statistics to support your market analysis. Identify target customers and potential gaps in the market that your agricultural business can address.

Detail the agricultural products or services your business offers. If you are into crop farming, describe the crops you plan to grow, their varieties, and their uses. If you are into livestock rearing, specify the types of animals and breeds you’ll raise. If you offer agricultural services, describe them in detail.

• Example: ABC Farms specializes in heirloom vegetables, such as tomatoes, peppers, and cucumbers, renowned for their exceptional flavor and nutritional value. We also raise heritage-breed livestock, including free-range chickens and pasture-raised pigs, to provide ethically sourced meat products.

Stellar Business Tips: Highlight the uniqueness and quality of your agricultural products or services. Emphasize your commitment to sustainability and responsible animal husbandry if applicable.

Outline your marketing and sales strategies to reach and attract your target customers. Consider the following aspects:

• Example: ABC Farms utilizes social media platforms to showcase our farm-to-table journey and engage with customers. We actively participate in farmers’ markets and local food events to promote our brand and build personal connections with consumers.

Stellar Business Tips: Utilize digital marketing tools, such as social media and email marketing, to create brand awareness and engage with customers directly. Explore partnerships with local businesses to expand your reach.

The operational plan outlines how your agricultural business will function on a day-to-day basis. It includes the following details:

• Example: ABC Farms employs a team of experienced farmers who follow sustainable farming practices, including crop rotation and integrated pest management, to ensure soil health and minimize environmental impact. We have invested in modern irrigation systems and machinery to optimize productivity and reduce labor costs.

Stellar Business Tips: Detail the specific practices and technologies you’ll use to enhance efficiency and sustainability. Showcase your commitment to ethical and responsible farm management.

Conduct a SWOT analysis to evaluate your agricultural business’s internal strengths and weaknesses, as well as external opportunities and threats. Use this analysis to make informed decisions and develop effective strategies.

• Example: Strengths: ABC Farms has established a strong reputation for premium-quality produce, garnering repeat customers and positive reviews. Weaknesses: We currently face limited storage facilities for harvested crops, which may affect our ability to meet peak demands.

Stellar Business Tips: Be honest about your agricultural business’s strengths and weaknesses. Address how you plan to capitalize on opportunities and mitigate potential risks.

The financial projections section provides a detailed forecast of your agricultural business’s financial performance over the next 3-5 years. Include the following financial statements:

• Example: Sales Forecast: We anticipate steady growth in sales, with a projected increase of 15% annually due to expanding customer base and diversified product offerings.

Stellar Business Tips: Use realistic and data-driven estimates for your financial projections. Include contingency plans for unforeseen financial challenges.

If your agricultural business requires funding or investment, outline your funding requirements and sources of financing. This section should include:

• Example: Funding Requirements: ABC Farms seeks a capital investment of $200,000 to expand farmland, install greenhouses, and upgrade equipment to meet the growing demand for our organic products.

Stellar Business Tips: Clearly explain how the investment will be used to drive the growth and success of your agricultural business.

Identify potential risks and challenges that your agricultural business may face and develop risk management strategies to mitigate their impact. Consider the following risk categories:

• Example: Market Risks: Fluctuations in commodity prices and changes in consumer preferences may impact our sales revenue. To address this, we will diversify our product offerings and explore new markets.

Stellar Business Tips: Demonstrate your proactive approach to risk management. Provide solutions for handling potential challenges to reassure stakeholders.

As the importance of sustainable farming practices grows, customers and investors increasingly value agricultural businesses that prioritize environmental stewardship and social responsibility. In this section, highlight your commitment to sustainability:

• Example: ABC Farms is committed to regenerative agriculture practices, including cover cropping and no-till farming, to enhance soil health and sequester carbon. We actively participate in local conservation programs to protect natural habitats and biodiversity.

Stellar Business Tips: Showcase your efforts to contribute positively to the environment and local community. Share success stories of how your sustainable practices have made a difference.

The agricultural industry is subject to various laws and regulations, such as agricultural zoning laws, environmental regulations, labor laws, and food safety standards. In this section, address the legal and regulatory aspects of your agricultural business:

• Example: ABC Farms complies with all local, state, and federal regulations for organic certification and food safety. We conduct regular inspections and maintain accurate records to ensure full compliance.

Stellar Business Tips: Emphasize your commitment to adhering to legal requirements and ensuring transparency in your agricultural operations.

Develop a timeline for your agricultural business’s key milestones and achievements. This section should include:

• Example: Milestone Timeline: Year 1 – Acquire additional farmland; Year 2 – Expand greenhouse production; Year 3 – Launch an online farm-to-table store.

Stellar Business Tips: Set realistic timelines for achieving your milestones. This will help you track progress and stay on course.

In conclusion, creating a well-structured and comprehensive agricultural business plan is crucial for your venture’s success. It provides a roadmap to guide your agricultural business towards its goals, while also attracting investors and other stakeholders. Remember that the agricultural industry is dynamic and continually evolving, so your business plan should be flexible enough to adapt to changing market conditions and opportunities.

By following the steps outlined in this guide and incorporating sustainable practices, your agricultural business can thrive in an increasingly competitive landscape. At Stellar Business Plans , we are dedicated to supporting the success of agricultural entrepreneurs like you. Our team of experts can assist you in crafting a tailored business plan that aligns with your vision and values. Let’s cultivate growth together and create a sustainable future for agriculture!

Remember, agricultural business success is not only about financial gains but also about nurturing the land, supporting local communities, and providing consumers with nutritious and ethically sourced products. Let your passion for agriculture and dedication to sustainability shine through every aspect of your business. Together, we can sow the seeds of a thriving agricultural future.

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Farm and Agriculture Business Plans

Agri-tourism business plans.

• Vineyard Bed & Breakfast Business Plan
• Agritourism Business Plan

Agriculture Consulting Business Plans

• Agricultural Consultants Business Plan

Agriculture Products & Retail Business Plans

• Butcher Shop Business Plan
• Feed and Farm Supply Business Plan
• Garden Nursery Business Plan
• Garden Products Recycling Business Plan
• Horse Reseller Business Plan
• Recycling Waste Materials Business Plan

Farm Business Plans

• Agriculture Farm Business Plan
• Agriculture Fruit Farm Business Plan
• Horse Training Business Plan
• Hydroponics Farm Business Plan
• Peach and Apricot Farm Business Plan
• Produce Farm Business Plan

Farm Machinery Business Plans

• Farm Machinery Manufacturer Business Plan

Farming and agriculture are complicated businesses. To be successful, you need more than a green thumb and the willingness to get your hands dirty. You need to know how to operate your agricultural enterprise efficiently and not just forecast your crop rotations, but your cash position and revenue. To do that, you need a business plan.

How can a business plan help your farm or agriculture business?

A good business plan will help your farm or food production business grow. It can improve your chances of receiving government grants or loans, help you manage your business through hard times, and identify additional forms of revenue like tourism or consulting. Most lenders or investors require a business plan before they even consider funding a project. When you add in the numerous elements of running an agricultural business, and the factors like weather and government regulations that are often beyond your control, a business plan becomes an essential tool for effective management, strategic planning and communication across all the key stakeholders in your business.

Find the right agriculture business plan template for your business

If you’re not sure where to begin, check out our farms, food growers, food production facilities, and other agriculture-related sample business plans for inspiration.

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Agriculture Business Plan: Step-by-Step Guide to Start Agri-Business

• Malti Chaudhary
• May 24, 2023
• Business Loan , Finance

Agriculture has long been the foundation of economies all across the world, supplying communities with food, resources, and income. With the agricultural sector employing more than 80% of the world’s labour force, it is obvious that this sector is crucial to the prosperity of any nation’s economy. 

For an entrepreneur, there are numerous opportunities in this sector. Whether you want to start a successful farm business, or you are looking for government assistance in the form of loans and subsidies. In this article, we’ll cover all the topics.

Let’s understand what are different factors to consider in Agriculture business plans.

The Importance of Agriculture in India

• Over 60% to 70% of the Indian population relies on agriculture and related industries.
• Almost 52% of the labour force in the nation is employed in the agriculture industry.
• About 18.3% of India’s GDP (2022-23) (Gross Domestic Product) is attributed to agriculture. ( PIB )
• India’s GDP from agriculture increased to 6934.75 INR billion in the 4th quarter of 2022 from 4297.55 INR billion in the 3rd quarter.
• The Indian agriculture industry is projected to grow by 3.5% during the fiscal year 2022-2023.[ Source ]

Agriculture Business Plan  

A solid plan may make your agriculture business successful. Therefore when writing one, consider all the elements that constitute an excellent agriculture business plan. Also, take inspiration and incorporate key elements from already existing businesses. 

Purpose of Agriculture Business Plan 

• A strong agriculture business plan helps you understand the teams and make key business decisions to accomplish desired goals.
• It also helps you get investors for your business. Investors could be bankers or any other venture capitalists who would be willing to raise funds for your agribusiness. 
• It helps determine if you can get the business going in a set direction and also allows you to estimate the costs required for founding the business.
• A good business plan clearly defines your corporate objectives.

Elements of an Agriculture Business Plan

While creating a strategy for your agriculture business, use a step-by-step procedure and include a comprehensive list of all the necessary components. Of course, your business strategy will determine whether you are a startup or an established firm. In any case, you must ensure that your business plan is inclusive, succinct, detailed, and grounded in reality.

Planning to create an Agriculture Business plan? Here’s what you should include:

1. Purpose and Objectives

The goal of the company is expressed in its objective statement. It dictates why you want to start the business and what you hope to achieve. Also, it identifies the other companies or entities your business will work with.

Thus, your company’s mission statement must incorporate information about your brand and core values.

2. Business Details 

Illustrate every important component of your business, including its location, the size of its property, the date it began operations, its current status, and the sector it operates in. This section could also address other subjects, like marketing and sustainability.

3. Market Analysis

The majority of businesses begin by researching their industry. So, it would be great to implement the same idea in your agricultural business.

You can start by learning about the needs and compiling as much data as possible on supply and demand, market trends, rivals, and customers.

4. SWOT Analysis

A SWOT analysis is a way to determine your agribusiness’s internal strengths and weaknesses. The outside world may teach you about your possibilities, threats, skills, and shortcomings. For example, new markets, competitors, governmental limits, laws, and current economic conditions could all be opportunities or dangers.

By conducting a SWOT analysis, you can know the strengths and weaknesses of your agribusiness on the inside. Besides strengths and weaknesses, you can also learn about opportunities and threats from the outside. Opportunities and threats could include new markets and competitors, government regulations and restrictions, and prevailing economic conditions.

5. Business Strategy

Create a marketing plan corresponding to your mission statement and goals, the products and services you want to sell. The information you gathered during the research and analysis phases can provide ideas for this.

While creating a marketing plan, be sure to take into account all aspects, including pricing, location, and promotion. Consider how your products or services could help your clientele as well. Customers should be made aware of your product’s benefits. Then and only then will your business thrive in today’s competitive marketplace.

6. Finances

One of the most important sections of any agriculture business plan is the financing portion. You should assess your current financial condition and future prospects.

Depending on your financial status, you can decide whether a business loan is necessary for your agribusiness. Determine your current financial status and the money required to build your agriculture business.

7. Management Summary

The management summary, which comes last in your agricultural business plan, is where you highlight your successes and showcase them to potential investors.

Show them your financial projections and reassure them that investing in your business is a smart move. Doing this can bring in more potential investors for your agricultural business.

Steps to Draft an Agriculture Business Plan

• Step 1: Before getting started you need to first make up your mind about the type of agriculture business you want to start.
• Step 2: Narrow down land and secure the boundaries of it. Make sure you close the lease agreement.
• Step 3: Do deep research on the market to identify the requirements you need to cater to.
• Step 4: Do a calculation of different aspects of your agribusiness. This could include the economic viability of the business, commodities you are going to trade or what role you need to take up in order to tap into future opportunities.
• Step 5: When you are done with the above steps, now is the time to identify the resources you need to for the production.
• Step 6: Register your business
• Step 7: Make a strategy to secure the credit for your business. Unless you have a strong foundation of credit, it is very difficult to kickstart an agribusiness.

Agriculture loans in India

An agribusiness loan is a type of overdraft that can be used for farming and other agriculturally related operations that require working capital. 

Farmers in India can typically apply for low-interest agricultural loans. Repayment conditions for agricultural loans vary from lender to lender. The loan can be repaid in monthly, yearly, or biannual payments.

Uses of Agribusiness loans

• Purchasing agricultural and irrigation machinery
• Buying cattle and livestock
• Purchase of agricultural land
• Storage and warehousing expenses
• Marketing expenses
• Transportation costs
• Managing day-to-day operations

Eligibility Criteria for an Agriculture Business Loan

• The primary applicant must be aged between 18 – 70 years old.
• Applicant should use the loan credit for the cultivation of the farmland.

Documents required to avail of an Agriculture Loan

• ID proof – PAN card/ Aadhar card/ Ration card/ Driving license/ Voter ID
• Address proof – Bank statement/ 3 months utility bill/ Ration card/ Driving license/ Passport
• Land ownership proof.

Let’s see what are the different components of an Agriculture Business Plan.

Closing Words  

It should go without saying that planning your farm business is a major task. But, don’t let it deter you. 

When drafting the plan, your mission statement and goals should come first. After that, go on to strategy creation and market research. You can then describe how you’ll carry out your plan after that. You will market your products to your customers in this manner. You must identify your target customers at this point in your agriculture business strategy. 

Hence, when creating a plan for your farm business, go step by step. And ensure that you don’t miss anything. Just follow the steps mentioned in this article. Happy Farming!

What business can I start with agriculture?

Every business in agriculture holds a key to profits. If you are not sure which business to start with then, here’s a list of businesses you can consider:  1. Organic Farming 2. Organic Fertilizer 3. Poultry Farming 4. Dairy Farming 5. Garlic Farming 6. Lavender Farming 7. Gourmet Mushrooms Farming 8. Flower Business 9. Fertilizer Distribution 10. Mushroom Farming 11. Sunflower Farming 12. Hydroponic Retail Store Business 13. Bamboo Farming 14. Willows Farming

Which agriculture business plan example is most profitable?

When we talk about profitability, Dairy farming has an exceptional potential to become most profitable. Its not just the milk but other products like manure are in high demand.

How to start an agriculture loan application process?

You can start your agriculture loan application process by duly filling out all the details and submitting the application form to the bank while attaching all the necessary documentation. 

What is the online application procedure for agriculture loans?

When applying for a loan online, you must fill out the application form and upload it along with the required documents on the bank’s website.

Who can be categorized as small and marginal farmers?

Any farmer who owns less than 2.5 acres of irrigated land or 5 acres of non-irrigated land falls under the small and marginal farmer category.

Can women avail of agriculture loans in India?

The Indian government encourages women to avail of agriculture loans by offering special schemes for women borrowers.

Who is eligible to apply for an agriculture loan in India?

All categories of farmers, including small and marginal farmers, tenant farmers and sharecroppers, are all eligible to apply for agriculture loans.

How do you write an agricultural business plan?

You just need the follow the below-mentioned steps to make an agricultural business plan

Step 1: Business statement 

Start with a mission statement. The why should be clear. This includes what your business is all about and what it will do. Include the business identity and values.

Step 2. Details of your business

Highlight all important details of your business. Everything right from the location to the date when you’ll start operations.

Step 3: Competition Analysis

Analyse the market. It will help you to strategize better. Gather information about your competitors. Do a SWOT analysis. 

Step 4: Business Strategy

Create a marketing strategy, that aligns with your business statement and values. 

Step 5: Finances

Assess your financial standing and project future. Based on that apply for a loan

Step 6: Management Summary

Highlight your business achievements. 

How do I start my own agricultural startup?

It’s pretty straightforward to start an agricultural startup in India. Follow the below-mentioned steps:

Step 1: Competition Analysis 

Do a proper competition analysis. This will help you to make a good business plan.

Step 2: Arranging the Funds

Consider taking a loan or arrange the funds to kickstart the business.

Step 3: Register your Business

It is the first and foremost step that you should take. Registering your business will help you to take advantage of various government initiatives or schemes.

Step 4: Marketing your Business

Mow market your business. Make a marketing strategy and stick to it. It will reap results for you.

Suggested Reads:

• Best 30+ Business Ideas for Women Entrepreneurs in India
• What is SSI? Small-Scale Industries Explained
• What is Loan Resource App: Benefits, Comparison & How to Apply
• 70+ Best RBI Approved Loan Apps In India [2023]
• Fake loan app list: 500+ apps you should avoid at any cost
• MSME Advantages and Disadvantages: Unlocking the potential of MSMEs in India

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Small Business Trends

50 small agricultural business ideas.

Our Methodology to Choose the Best Agricultural Business Ideas

This structured approach allows for a comprehensive assessment of agricultural business ideas, ensuring that entrepreneurs make informed decisions that align with market needs, personal goals, and sustainability practices.

Agricultural Business Ideas

Urban agriculture, farmer’s market vending, herb growing.

Herbs like basil, parsley and mint can make for great agriculture products. So you can grow it at your home or farm with little space required and sell it at a profit.

Vegetable Farming

Livestock feed manufacturing, fruit growing, field crop farming.

Soybeans, cloves and other types of crops require a fair amount of field space to grow. But if you have the land, you can harvest specific crops to sell to food producers.

Nursery Operation

Dairy farming, poultry farming, fish farming, rabbit raising, snail farming, mushroom farming.

You could also start a farm where you focus specifically on growing various types of mushrooms. These grow quickly and can be sold at high profits.

Honey Production

Beeswax processing, soy production, food delivery.

If you grow or process food items, you can also build a business around delivering fresh food items to local consumers who want to buy local products.

Bulk Foodstuff Wholesaling

Weed killer production, fruit canning, jam production, juice production, meat packing, hatchery operation, florist business, spice production.

There are also plenty of different plants you can grow that will allow you to create various spices that you can process and sell.

Nut Processing

Organic gardening, sustainable farm consulting, agricultural equipment rental, worm farming.

Compost can be a useful tool for food growers. So you can make compost to sell to farmers and gardeners by starting your own worm farm.

Goat Rentals

Christmas tree farming, firewood production, tree seed supply, oil production.

There are also various types of plants that you can use to produce oil for cooking or other purposes. So you can process that oil process to sell.

Potted Plant Sales

Butterfly farming, wool production, pet food production, planting service.

If you don’t have your own farm but still want to build a business centered around planting crops, you could start your own planting service and work with other farmers or growers in your area.

Farm Sitting

Corn maze operation, petting zoo operation, educational farming, trail ride service, agrotourism.

You could also offer a whole tourist experience at your farm where people can come visit and maybe even stay as part of a bed and breakfast type of experience.

Fee Hunting

Nurturing agricultural entrepreneurship: beyond the fields, agrotourism ventures.

Agrotourism ventures not only diversify your revenue streams but also foster a deeper appreciation for agriculture among the public while promoting rural economies.

Agriculture’s Timeless Resilience

Cultivating innovation across boundaries.

One of the defining characteristics of modern agriculture is its remarkable adaptability and openness to innovation. Urban agriculture is a prime example, proving that farming can flourish even in the heart of the city or within the confines of a suburban backyard. It is a testament to human ingenuity, illustrating our capacity to find solutions and adapt to constraints, no matter how limited the space.

Indirect Contributions to Agriculture

Nursery operations, often overshadowed, are the silent contributors to the verdant landscapes that surround us. By cultivating and selling various plants, from ornamental shrubs to fruit trees, they enrich our surroundings and provide essential resources for gardeners and landscapers.

Exploring Specialized Agricultural Niches

Harvesting earth’s bounty: crop-centric ventures.

Crops have always formed the foundation of agriculture, and today, they continue to shape the industry. Field crop farming, focusing on crops like soybeans and cloves, requires substantial acreage but provides raw materials essential to food production. Soy production, on the other hand, showcases the versatility of this legume, with applications ranging from tofu to biofuels.

Local Impact, Global Reach: The Essence of Agriculture

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How to Write a Business Plan for Agricultural Projects to Secure Funding

Deyana mincheva, operations & sustainability director at natural capital associates.

In the realm of agriculture, a robust business plan is essential for securing the necessary funding to bring your agricultural project to fruition. Whether you’re aiming to modernize farming practices, introduce novel technologies, or launch a sustainable agriculture initiative, a well-structured business plan serves as a roadmap for success.

Here’s a comprehensive guide on how to craft a compelling business plan explicitly tailored for agricultural projects, enabling you to unlock funding and drive agricultural innovation forward.

Step 1: Define your business model

A powerful tool that I always recommend to entrepreneurs is the Business Model Canvas, available for free. This simple exercise consists of filling the 11 building blocks of the canvas. The order I would recommend is:

Value Proposition:  What products or services do you plan to offer? How do they differentiate or improve upon those of competitors?

Customer Segments:  Which groups of people or companies are willing to pay for your offerings?

Customer Relationships:  How will you raise awareness of your products among potential customers? Will you reach out to them directly? Will they discover you via social media or your website? How can they place orders with you? How will they communicate with you after orders are delivered?

Channels:  How will you deliver your products or services? Will you handle it internally, or will you require the assistance of a distributor?

Revenue Streams:  This is perhaps one of the most crucial questions for a financially viable project. How will you generate income? Will it come from product sales? How often are there value-added services you can offer?

Social & Environmental Benefits:  Does your project benefit more than just you and your company? Are you creating new jobs? Are you combating deforestation or participating in reforestation efforts? Are you implementing sustainable agricultural practices?

Key Activities:  What tasks must you perform to deliver your value proposition? Will you be cultivating your products? Will you handle processing, storage, packaging, and distribution? Do you require accounting and marketing assistance?

Key Resources:  What resources are necessary to carry out your activities, such as land, storage and processing facilities, irrigation, seeds, pest control products, insurance, labor, and machinery?

Partnerships:  Who must you collaborate with for your project to succeed?

Cost Structure:  How much will your activities and resources cost? What will be your ongoing expenses? What capital expenditures do you need to invest in? What are your project’s associated environmental and societal costs, such as land conversion and water usage?

Completing this exercise independently or, ideally, with your team will prompt you to consider all aspects of your business and provide a solid foundation for developing a business plan.

Step 2: Prepare your financials

Develop realistic financial projections that encompass starting costs, operating expenses, revenue streams, and profitability milestones. Consider factors such as seasonality, market volatility, and production cycles when forecasting sales and cash flow. Provide a breakdown of funding requirements, including capital expenditures, working capital needs, and contingency reserves.

Investors and lenders pay close attention to the financial projections section to assess your business’s economic viability and potential return on investment. Include detailed forecasts of your revenue, expenses, cash flow, and profitability over a specific period, typically three to five years. Base your projections on realistic assumptions and explain any significant variances or assumptions. Although some free templates are available online, such as this one, I would highly recommend getting professional advice on this.

If your business has been running for a while, gather any historical data to highlight your past performance.  

Step 3: Start Writing Your Business Plan

Executive Summary:  A good business plan always begins with a one-page executive summary. In the executive summary, you must answer the following key questions: Who are you? What do you do, or what do you intend to do? Why do you think this is a good idea (necessity/market demand/need you are addressing)? What is your timeline (when would you like to start/when do you foresee generating revenues)? What do you need from the person reading it, and how much (Funding for a processing facility? Trade finance? etc.)?

Pro tip: Although the executive summary is the first part of the document, I recommend writing it last.

Introduction:  Explain your motivation for starting this project.

Value Proposition:  Describe the products or services you plan to offer in detail.

Market Analysis:  Keep it concise and to the point. For example, if it is a project about growing onions in the Niari Region of Ghana to be sold in the local market, there is no point in including the global market value and forecast. Rather, it is more interesting to explain who you intend to sell to (your customer segments), what the current trends are (seasonality, availability), what the prices are for similar products or services, and how you would position your products (are you offering premium products for a premium price, or positioning yourself as the cheapest on the market?).

Operational Plan:  Provide details about your operational processes, production methods, supply chain management, and resource allocation. Discuss your organizational structure, key personnel, and operational milestones. Investors want to see that you have a clear plan for executing your business strategy and delivering on your promises.

Key Resources:  What are your key resources? What do you currently have (i.e., land, machines, storage), and what would you need in the future?

Financial Information:  Include a comprehensive summary of your financials and financial projections.

Management Team:  Introduce your management team, highlighting their relevant experience, skills, and qualifications. Investors place significant emphasis on the strength and capabilities of the management team, as they play a critical role in the business’s success. Showcase your team members’ expertise and track record to instill confidence in investors.

Social and Environmental Impact:  What social and environmental value is your business creating?

Pro tip: Is there something about your business that aligns with the sustainability goals of your potential lender (i.e., if you are applying for a grant through a government program, are the program objectives to contribute to food security, create employment for youth and women, increase mechanization)?

Risk Analysis and Mitigation:  Identify potential risks and challenges that could impact your business’s success, such as market competition, regulatory changes, operational risks, social and environmental risks, or financial constraints. Discuss your strategies for mitigating these risks and contingency plans for addressing unforeseen events. Investors appreciate transparency and proactive risk management strategies.

Appendices:  Include any supplementary materials or supporting documentation, such as resumes of key team members, market research reports, financial statements, legal documents, soil analysis, yield assumptions, and historical data. While not always necessary, appendices provide additional context and credibility to your business plan.

Contact Information:  Always include a page with your contact details. Sometimes, your business plan can be circulated to other interested parties, and it would be a shame if they couldn’t contact you!

Conclusion:

Writing a business plan can be hard work and feel overwhelming initially, but it is essential for accessing the necessary funding.

You can consider various other approaches and structures for your business plan. No matter your choice, I recommend breaking it down into simple steps. Feel free to seek assistance in areas where you need clarification. I’m happy to try to help, and numerous consultants and non-profit organizations are willing to lend support!

Specialising in promoting sustainable agriculture, Deyana has a proven track record of implementing and managing projects aimed at improving agricultural practices while fostering environmental conservation and community development in Sub-Saharan Africa and the Indian Ocean regions. In recent years, Deyana has been actively involved in capital raising for the development of value chains within the agricultural sector, fostering collaboration with local communities to create sustainable and inclusive supply chains that benefit both producers and consumers. Certified by the Global Reporting Initiative (GRI) with a strong emphasis on Sustainability Governance and reporting, she ensures adherence to international standards and best practices in sustainability management.

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[Pdf Sample] Crop Farming Business Plan Docx

In today’s agricultural landscape, having a well-structured business plan is essential for the success of any crop farming venture. A business plan serves as a roadmap, guiding farmers through various stages of planning, implementation, and growth.

[Pdf Sample] Crop Farming Business Plan Proposal Docx

To write a business plan , here is a breakdown of how it should be structured and what should be in each category. After this instruction, I will provide you with a sample of one I wrote for my farm , let us go:

Executive Summary

The executive summary acts as an overview of your crop farming business plan. It highlights the key points, objectives, and strategies of your venture, providing a concise snapshot of your business.

Business Description

In this section, you’ll delve deeper into the details of your crop farming business . Discuss the type of crops you plan to cultivate, the size of your farm, and any unique selling propositions that differentiate your farm from others. It is crucial to outline your vision, mission, and core values, showcasing your commitment to sustainable and ethical farming practices .

Read Also:  [Pdf Sample] Palm Oil Farming & Production Business Plan Docx

Market Analysis

Read Also:  [Pdf Sample] Poultry Farming Business Plan In South Africa Docx

Products and Services

Describe the specific crops you intend to grow , highlighting their nutritional value, market demand, and potential profitability. Discuss any value-added products or services you plan to offer, such as organic produce or agritourism activities. Emphasize the quality and uniqueness of your products to attract potential customers.

Marketing Strategy

Read Also:  [Pdf Sample] Farm Business Plan Example Docx

Operational Plan

Management and organization.

In this section, outline the management structure of your farm and introduce key personnel responsible for various aspects of the business . Highlight their qualifications and expertise, demonstrating their ability to contribute to the success of your crop farming venture. Additionally, discuss any plans for employee training and development to ensure a skilled workforce.

Read Also:  [Pdf Sample] Business Plan For Farming In South Africa Docx

Financial Plan

Risk assessment and mitigation.

Every business faces risks, and it is essential to identify and mitigate them effectively. Discuss potential risks associated with crop farming , such as adverse weather conditions, market fluctuations, or pest infestations. Outline risk mitigation strategies, such as crop insurance, diversification, or implementing sustainable farming practices . Demonstrating your ability to manage risks will instill confidence in potential investors or lenders.

Here Is a Download Link to the Crop Farming Business Plan Proposal Prepared By Agrolearner.com

Business Model for Agrolearners.com’s Crop Farming Business:

Key partnerships:.

Technology Providers: Partner with online learning platforms, video production companies, and website developers to ensure seamless delivery of educational resources.

Read Also:  [Pdf Sample] Business Plan For Cattle Farming In South Africa Docx

Key Activities:

Content Development: Create comprehensive and interactive courses, webinars, videos, and articles that cover all aspects of crop farming , from theory to practical application.

Platform Management: Maintain and update the Agrolearners.com website, ensuring a user-friendly experience and smooth access to educational resources.

User Support: Provide customer support through various channels, including email, chat, and forums, to address inquiries, provide guidance, and resolve any technical issues.

Value Proposition:

Comprehensive Agricultural Education: Agrolearners.com offers a wide range of resources, including structured courses, webinars, videos, and articles, covering all aspects of crop farming, from beginner to advanced levels.

Flexibility and Accessibility: Our online platform allows learners to access educational resources at their convenience, from any location, enabling them to learn at their own pace and according to their individual schedules.

Community and Networking: Agrolearners.com creates a community of like-minded individuals, allowing learners to connect, share experiences, and collaborate with other aspiring farmers and industry experts.

Customer Segments:

Existing Farmers: Farmers who want to enhance their knowledge, adopt sustainable practices, and explore new crop varieties to improve the productivity and profitability of their farms.

Agricultural Students: Students pursuing agricultural studies who wish to supplement their formal education with practical insights and hands-on experience in crop farming.

Customer Relationships:

Interactive Webinars and Q&A Sessions: Conduct live webinars and interactive sessions with agricultural experts, allowing learners to engage, ask questions, and receive personalized guidance.

Community Engagement: Foster an online community where learners can connect, share experiences, and learn from each other, fostering a sense of belonging and support.

Revenue Streams:

Webinar Registrations: Offer specialized webinars and charge participants a registration fee to attend live sessions with agricultural experts.

Advertising and Partnerships: Collaborate with agricultural suppliers and other relevant businesses to offer targeted advertising opportunities on the Agrolearners.com platform.

Cost Structure:

Content Development: Allocate resources to create high-quality course materials, videos, and articles.

Technological Infrastructure: Invest in website development, hosting, and maintenance, ensuring a seamless user experience.

Operational Expenses: Cover ongoing expenses such as personnel salaries, customer support, and administrative costs.

Key Resources:

Expertise and Knowledge: Engage agricultural experts and educators to develop content and provide guidance.

Content Creation Tools: Invest in video production equipment, e-learning software, and other tools required to develop high-quality educational materials.

Marketing and Analytics Tools: Utilize digital marketing tools, analytics platforms, and customer relationship management (CRM) systems to track performance and optimize marketing efforts.

Is it necessary to create a business plan for a crop farming venture?

Yes, a business plan is crucial for the success of any crop farming business. It helps in defining goals, strategies, and financial projections, and serves as a roadmap for your agricultural endeavor.

How can I assess market demand for specific crops?

Conduct market research, analyze consumer trends, and engage with potential buyers or distributors to understand the demand for your chosen crops.

What financial aspects should I consider in my business plan?

How can i mitigate risks in crop farming.

Identify potential risks such as weather fluctuations, pests, or market volatility, and develop strategies to mitigate them. This may include insurance coverage, diversification, or implementing sustainable farming practices .

Can I modify my business plan as my farm grows?

Yes, your business plan should be a dynamic document that evolves with your farm . Regularly review and update it to reflect changes in the market, technology, or your business goals.

Conclusion:

With a comprehensive business plan , a dedicated team, and a strong marketing strategy, we are confident in the success of Agrolearners.com in the agricultural education sector.

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Author: adewebs, you may also like:, [pdf sample] business plan for pig farming docx, starting a poultry farm with limited resources in ghana: a comprehensive guide for new farmers, how to register agribusiness company in kenya (see full guide), starting a poultry farm with limited resources in nigeria: guide for new farmers, leave a reply cancel reply.

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Agriculture Business Plan

It has been raining enough times, and the sun is high up in the sky. It’s almost growing season. Most farmers count off the days and look forward to this time. Despite that, there is another essential thing that you should prepare ahead of time. It has nothing to do about crops, chickens, or cattle and has everything to do with business documents. That said, compose an agriculture business plan before that season kicks off.

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What Is an Agriculture Business Plan?

An agriculture business plan is a necessary document that farmers write to increase the success rate of their business. This form details both their short-term and long-term  business goals . As well as the methods they will employ to attain their desired results. Most business ventures, especially the new ones, mostly have a business plan at their disposal.

How to Generate a Dependable Agriculture Business Plan

Planning is a process. It involves several steps that require you to brainstorm about a lot of items. The farming business has a lot of factors that can positively and negatively affect its profitability. That said, in composing this plan, you need to think about the essential elements that make up an impressive business plan.

1. Compose Your Mission and Vision Statement

When business professionals make decisions regarding their business, they use their organization’s mission and vision as a guide. This procedure will help them in setting the direction of their business goal setting . These statements will also convey the purpose and the objectives of your business venture to your prospects. In addition, it will also reflect your organization and the staff involved. 

2. Devise a Marketing Strategy

To maximize the gains of your business, you need to devise a marketing strategy . This process will help you spread awareness and reach a wider variety of clients. There are multiple ways to promote your services and organic vegetables and livestock products. If you want to implement the traditional tactics, you can print then post or hand out business flyers and posters. On the other hand, if you opt to employ a digital marketing strategy, you should look into effective social media strategies.

3. Research Your Target Market and Competitors

Running a target market analysis will give you an idea of the current trends of your clients. This activity could help you tailor your business techniques to fit your market’s demands. Another thing is to conduct a competitor SWOT analysis . By doing this, you can gain data that would be useful in strategizing on tactics to make your agriculture business stand out amongst them. 

4. Set Your Price List

Setting your price list for your services and products will include a lot of calculations of the financial costs and other factors that contributed to the process of growing and taking care of your crops and livestock. This task is a critical step because if you make your agricultural products too expensive or too cheap, they can directly impact your farm budget and the health of your business. 

Why is the agriculture business important?

Agriculture business or agribusiness, in short, is essential in maintaining the economy of various countries. It is because it serves as one of the sources of food. Aside from that, it also provides raw materials to people and other businesses. In addition, this business venture also offers employment to several people. The number comprises more of the workers in the rural areas.

What are examples of careers in agriculture?

People who took up the agriculture program have a lot of business and opportunities they can explore. Considering that people in agriculture have several skill sets, they can work on labor jobs, engineering jobs, and selling products. Aside from that, they can work as the operator of agriculture equipment and crop growers. In addition, they can also get a job as an agent that purchases farm products.

What is a farm SWOT analysis?

When you get into the agriculture business, you will need to generate a farm SWOT analysis . This framework will provide you with the details regarding your strengths, weaknesses, opportunities, and possible threats to your farm. This data will help you in constructing and tailoring your action plan for various circumstances.

You plant seeds and get fully grown crops after nurturing them. The same applies when doing business. You make a business plan ahead of time and get a booming business in return. People with green thumbs like you have a natural talent for growing plants, but you can make your life greener by earning plenty of dollar bills. Craft your agriculture business plan well and be the cream of the crop in the agribusiness.

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What Is Agribusiness?

Understanding agribusiness, agribusiness market forces, use of new technology, the bottom line.

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Agribusiness Explained: What It Is, Challenges, and Examples

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

Agribusiness encompasses the economic sectors for farming and farming-related commerce. It involves all the steps for getting agricultural goods to the market, including production, processing, and distribution. The industry is a traditional part of any economy, especially for countries with arable land and excess agricultural products for export.

Key Takeaways

• Agribusiness is a combination of the words “agriculture” and “business,” and it refers to commerce in farming and farming-related activities.
• Agribusiness covers the production, processing, and distribution of farm-based goods.
• Companies in the agribusiness industry comprise all aspects of food production.
• Climate change has amplified the pressure on many agribusinesses to adapt to large-scale shifts in weather patterns.

Investopedia / Sydney Burns

Agribusiness, as a sector, is all the different aspects of raising agricultural products as an integrated system. Trading farm goods is among the oldest human undertakings, but advances in the last century have made it a high-tech industry. Farmers raise animals and harvest fruits and vegetables with the help of sophisticated harvesting techniques, including using GPS to manage their operations. Manufacturers have developed increasingly automated machines that require very little labor. Processing plants are constantly renewing how they clean and package livestock to make production cleaner and more efficient.

While consumers don't see each part of this industry, we rely on the sector's efforts to remain sustainable while aiming for lower food prices.

Market forces, such as changing consumer attitudes, and natural forces, such as changes in the earth's climate, significantly influence agribusiness.

Changes in consumer taste alter what products are grown and raised. For example, shifting away from red meat might cause demand —and therefore prices—for beef to fall, changing how thousands of acres of farmland are used. Increased demand for produce may shift the mix of fruits and vegetables that farmers raise, requiring investments in irrigation systems and other ways of boosting production. Businesses unable to rapidly change with domestic demand often first look to export their products. If there's no market, they may be unable to compete and remain in business without pivoting to other crops.

Climate change has increased the pressure on the need for sustainable practices in the industry, just as it's already adjusting to vast differences in worldwide weather patterns. But even short-term changes in weather patterns can have dramatic effects: an early frost in a citrus-growing region could cause a severe drop in that year's crop while less snowfall in a mountain region could mean a spring drought in surrounding valleys that depend upon the melted water for crop growth.

The regulatory environment also influences the agribusiness industry. Changes in approved chemicals and procedures or other legislation can cause market fluctuations.

Agribusiness Challenges

Countries with a large farming sector face constant pressure from global competition. Products such as wheat, corn, and soybeans are commodities that are similar wherever they are grown, making one area's product easily replaceable by another's if it can get to market at a lower price. There are many other challenges faced by farmers:

• Global agricultural products prices can change rapidly, making crop planning complicated.
• Farmers may also have less arable land to work with as suburban and urban areas expand into the farm regions.
• Remaining competitive requires agribusinesses to operate more efficiently, often involving investments in new technologies, new ways of fertilizing and watering crops, and new ways of bringing goods into the global market.
• Climate change is perhaps the greatest common challenge for agribusinesses worldwide. It is one of the industries most affected by and also involved in propelling climate change.
• Agribusiness worldwide accounts for about 17% of the world's greenhouse gas emissions, helping to drive the rise in global temperatures, creating pressure on the sector to reduce emissions.
• Agribusiness is also heavily impacted by the volatility in average temperatures and rainfall, as well as extreme weather. Heat waves, droughts, extreme storms, and wildfires—all exacerbated by climate change—can cause damage to crops and threaten livestock. Rising temperatures can threaten growing conditions for crops and could limit production in many regions, while the growing global population is increasing the demand for food.

All this represents a major challenge for agribusinesses, which face pressure to adopt more sustainable production methods. Finding ways to reduce emissions and adapt to a changing climate will be key to future success.

The use of new technology is vital to remain competitive in the global agribusiness sector. Farmers need to reduce crop costs and increase yield per square acre to stay competitive.

Some farmers have adopted bee vectoring technology. This involves raising bees and using them as a delivery method for biocontrol agents, which can help protect plants from pests, fungi, and diseases.

Bees are key to agriculture, but populations have dropped in recent years. Almost half the honeybee colonies in the United States died between April 2022 and April 2023. This new technology can encourage more beekeeping and promote the growth of more colonies, while improving crop yields and fighting disease.

Electronic drones have also played a greater role in agribusiness in recent years. Farmers have used drones for tasks like scouting for pests and diseases, monitoring water stress, screening plants, locating stray livestock, and gathering data for flood risk modeling.

Robotics, GPS technology, and moisture sensors also help farmers improve worker safety and apply pesticides and fertilizers more easily across closely-targeted areas, and reduce wasted water.

Agribusiness Examples

Agribusiness is a broad industry with a vast range of companies and operations. Agribusinesses include small family farms and multinational conglomerates in food production on a global scale.

Some examples of agribusinesses include farm machine manufacturers, such as Deere & Company ( DE ); seed and agrochemical manufacturers, such as Bayer; food processing companies, such as Archer-Daniels-Midland Company ( ADM ); farmer's cooperatives; agritourism companies; and makers of biofuels , animal feeds, and other related products.

What Is an Example of Agribusiness?

Agriculture is the practice of raising crops, livestock, fish, trees, and other living organisms for food or other products. Agriculture has a long history—it is widely believed that humans began practicing agriculture at the end of the last ice age.

What Are the Three Main Categories of Agribusiness?

Agribusiness can be split into three major categories—agriculture, livestock, and forestry.

Agriculture includes activities like planting and harvesting crops. Livestock concerns raising animals for products like milk, eggs, or meat. Forestry involves planting, growing, and harvesting trees for construction, papermaking, and other purposes.

What Is the Most Profitable Agribusiness?

According to the United States Department of Agriculture, the top five products in the U.S. are corn, cattle, soybeans, dairy products, and broilers (chickens raised for food). The most profitable agribusinesses are likely involved in producing, processing, and marketing these products.

What Is the Future of Agribusiness?

Agribusiness will likely evolve because of the effects of climate change. Other changes underway include the rise of genetically modified crops and industry consolidation.

Agribusiness is one of the world's oldest industries, with human agriculture beginning millennia ago. It is highly diverse and includes everyone from scientists developing new plants to industrial workers building farm equipment to laborers planting and harvesting food.

Though the industry is facing major changes and challenges, largely because of climate change, it will continue to evolve as people's food needs change.

The World Bank. " Agribusiness Trade as a Pillar of Development: Measurement and Patterns ."

United Nations Environment Program. " Climate Risks in the Agriculture Sector ."

Mohapatra, Shurti, et al. " Climate Change and Vulnerability of Agribusiness: Assessment of Climate Change Impact on Agricultural Productivity ." Frontiers in Psychology , vol. 13, 2022.

Lynch, John, et al. " Agriculture's Contribution to Climate Change and Role in Mitigation Is Distinct From Predominantly Fossil CO2-Emitting Sectors ." Frontiers in Sustainable Food Systems , vol. 4, February 2021.

Shipp, Les, et al. " Effect of Bee-Vectored Beauveria Bassiana on Greenhouse Beneficials Under Greenhouse Cage Conditions ." Biological Control, vol. 63, no. 2, November 2012, pp. 135-142.

Bee Informed Partnership. " United States Honey Bee Colony Losses 2022–23: Preliminary Results From the Bee Informed Partnership ."

National Institute of Food and Agriculture. " Using Drones in Agriculture and Natural Resources ."

National Institute of Food and Agriculture. " Agriculture Technology ."

U.S. Department of Agriculture. " Farm Income and Wealth Statistics, Cash Receipts by State ."

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Business planning for agribusiness

2018, Business planning for agribusiness

Main benefits of developing a Business plan are listed in this work, with a specific focus on agribusiness. The sections contained in a business plan would differ to a certain extent in view of the purpose of the plan, but most business plans have the same components. These can be grouped into two main sections, of which a detailed explanation is offered in this paper. Business overview, Industry overview, Competition analysis, Technology Plan, Marketing Strategy, Production (or outsourcing) Plan, Organizational Structure, Operational Plan, Financial Plan and Revenue Management techniques are addressed through this work with a step by step approach. Specific business examples from the agribusiness sector are also mentioned, to help better address the topic.

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Acta Agraria Debreceniensis

Tünde Zita Kovács

Agricultural businesses operate in a complex and dynamic environment, with many challenges and opportunities. It is therefore essential for these businesses to have a strategic plan. It is a critical process that helps businesses navigate in a complex and uncertain environment and achieve long-term goals and objectives. In this article, we have conducted a bibliometric analysis of academic journals to investigate the extent to which strategic planning is a researched topic in agribusiness enterprises. We found that there is no concentrated research, with only three keywords appearing in the literature with at least five repetitions. Even of the two repetitions, only 22 were found. The clustering of keywords helps to identify research directions. The results of a survey of 134 enterprises were then presented. The majority of enterprises do not have a long-term plan or even a written vision. We found that SWOT analysis is still the most common planning method among the companies surve...

Vincent Amanor-Boadu

Antenor Roberto Pedroso

Ronilo Gepiga

American Journal of Agricultural Economics

Steven Sonka , M. Boehlje

International Journal of Agricultural Invention

Shoji Lal Bairwa

Agribusiness is a fast emerging industrial sector and becomes a most important sector of Indian economy due to boosting up the economy and taking care of global opportunities of trade. Nowadays, agriculture has achieved commercial importance and status is changed from subsistence to commercial farming, import oriented to export oriented, supply driven technology to demand driven technology due to agribusiness sector. Agribusiness is a complex and comprehensive system of industry chain, which is playing a vital role in Indian economy. Generally, Agribusiness is difficult to understand due to its elusive and complex nature while understanding the concept, system, structure, and components of agribusiness is essential to understand the whole agribusiness environment. Agribusiness is made of various sectors like input sector, production sector, processing sector and marketing service sector, in which the main value-added sector concentrated on the post-production sectors. The agribusine...

Nicola Shadbolt

The purpose of the research is to provide information to assist in policy development for the New Zealand agribusiness sector. This project investigated business models and performance indicators for agribusiness firms, exploring the relevance and applicability of these models particularly for small and medium-sized enterprises (SMEs). The project has issued interim reports at several milestones in this year-long project. The first report reviewed the literature, both national and international on business models of development and their associated suite of indicators. The second report reviewed the indicators currently used in agribusiness, including governmental statistics and industry data. This report examined success models specific to agriculture and brought together the research from the prior report on general business models and the research specific to agriculture to identify the important information gaps. The third report presented the results of fieldwork collected thro...

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