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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.

Agriculture Business Plan Template

Written by Dave Lavinsky

Agriculture Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and farm owners create business plans to start and grow their agricultural companies.

If you’re unfamiliar with creating an agriculture or farm business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a good business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write an agriculture business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is an Agriculture Business Plan?

A business plan provides a snapshot of your agricultural business as it stands today, and lays out your growth plan for the next five years. It is a valuable tool that explains your business goals and your strategies for reaching them. It also includes market research to support your plans.  

Why You Need a Business Plan for an Agriculture Business

If you’re looking to start an agricultural business or grow your existing agricultural company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your farm to improve your chances of success. Your agricultural business plan is a living document that should be updated annually as your company grows and changes.  

Sources of Funding for Agricultural Businesses

With regard to funding, the main sources of funding for an agricultural business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review a comprehensive business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for agricultural companies.

    Finish Your Business Plan Today!

How to write a business plan for an agricultural business.

If you want to start an agricultural business or expand your current one, you need a business plan. A good farm business plan should include 10 sections as follows:

Executive Summary

Company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan. The goal of your executive summary is to quickly engage the reader. Explain to them the kind of farm business you are running and the status. For example, are you a startup, do you have an agricultural business that you would like to grow, or do you have a farming operation that you would like to sell? Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the agricultural industry.
• Discuss the type of farm you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

In your company overview, you will detail the type of agricultural production you are operating.

For example, you might specialize in one of the following types of agricultural businesses:

• Animal feed manufacturing : the production and sale of food formulas for farm animals.
• Agrichemical and seed manufacturing : the production and sale of agrichemicals (e.g., fertilizers, pesticides, and fungicides) and seeds to farmers that support the growth of their crops.
• Agricultural engineering : development, testing, and implementation of new agriculture tools and machinery to improve the process for farmers.
• Biofuel manufacturing : the production of energy from biomass.
• Crop production : the process of growing and harvesting a variety of crops such as fruits, vegetables, and grains.

In addition, the company overview needs to provide information about the business history.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include reaching X number of harvests per year, the number of customers served, or reaching $X amount in revenue.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

In your industry or market analysis, you need to provide an overview of the agricultural industry. While this may seem unnecessary, it serves multiple purposes.

First, researching the agricultural industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies industry trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in this section:

• How big is the agricultural industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your agricultural business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of agricultural business you operate. Clearly, schools would respond to different marketing promotions than corporations, for example.

Try to break out your target market into segments in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target audience. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other farms and agricultural producers.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other types of farmers, wholesalers, and distributors.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What type of agricultural business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you make it easier for your customers to engage with you?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an agriculture business, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of agricultural company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you produce fruit, soy, or vegetable products?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your agricultural company. Document where your company is situated and mention how the site will impact your success. For example, is your agricultural business located on a small or large farm near your customer base? And, will you operate one or multiple locations? Discuss how your site might be the ideal location for your customers.

Promotions : The final part is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Attend farmers markets
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your farm business, including scheduling employees, tracking inventory, accepting orders and payments, and meeting with customers.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to reach your Xth harvest, or when you hope to generate $X in revenue. It could also be when you expect to expand your farm business to a new region.

To demonstrate your potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing agricultural businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing an agriculture business, or owning their own farm.

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, how many pounds of each crop do you plan to yield each season? And what is your sales strategy to grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your farm business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a farm business:

• Cost of farm equipment and supplies
• Operating expenses
• Payroll or salaries paid to staff
• Business insurance
• Other start-up costs (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your farm’s location lease or a list of agricultural equipment and machinery used on your farm.  

Free Business Plan Template for a Farm or Agriculture Business

You can download our farm business plan PDF template here.  

Agriculture Business Plan Summary

Putting together a business plan for your agriculture business will improve your company’s chances of success. The process of developing your plan will help you better understand your target market, your competition, and your customers. You will also gain a marketing plan to better attract and serve customers, an operations plan to focus your efforts, and financial projections that give you goals to strive for and keep your company focused.

Growthink’s Ultimate Business Plan Template allows you to quickly and easily write your business plan.  

Additional Resources for Starting an Agriculture Business

• How To Start a Farm
• Sample Farm Business Plan
• Starting a New Agricultural Business
• Small and Mid-Sized Farmer Resources
• Starting a Sustainable Agriculture Business
• Beginning Farmers and Ranchers Loans
• Business Resources for Those Starting to Farm or for an Existing Farm

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s business plan professional services can help you create a winning business.  

Other Helpful Business Plan Articles & Templates

• Business plans

Farm Business Plan

Used 5,069 times

Farm Business Plan gives an overview of the company, including corporation history, owner backgrounds, creations and more. Use this template to quickly develop your farm company plan.

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Farm Business Plan Template

Prepared by:

​ [Sender.FirstName] [Sender.LastName] ​

​ [Sender.Title] ​

​ [Sender.Phone] ​

​ [Sender.Email] ​

Executive Summary

​ [Sender.Company] is owned and operated by [Sender.FirstName] [Sender.LastName] .

​ [Sender.Company] produces and sells (product types, e.g., produce, pastured animals, herbs, etc.), and we also provide on-farm services including (service types, e.g., apple picking, events, produce stand, etc.).

The target audience for [Sender.Company] 's product will be local consumers and businesses whom we will target directly. To market to this audience, we plan to take advantage of public picking events, farmers' markets, and a roadside farm stand.

Future of the Farm

​ [Sender.Company] plans to turn our XX acres of farmland into a sustainable source of crops, pastured animals, and pollinators. We plan to use regenerative farming practices as much as possible and understand what management techniques work best for our acreage.

Additionally, we will have a large greenhouse and use season extension techniques to get more value out of our farmland.

To build a locally well-known brand and eventually expand our presence across the state.

To sell enough of our product to generate a positive cash flow, support the farm owners and staff, and pay back capital plus 15% interest to our investors.

To preserve and enhance our farmland so that it remains sustainable and we can continue to share the fruits of the land with others.

Follow a thorough 3-year business plan and reassess every year to ensure we remain on track.

Seek funding from our network of contacts and outside funders for start-up costs.

Execute a creative marketing plan that introduces our brand to our target market.

Company Description

Business address and contact.

​ [Sender.StreetAddress] , [Sender.City] , [Sender.State] [Sender.PostalCode] ​

​ [Sender.FirstName] [Sender.LastName] : [Sender.Phone] , [Sender.Email] ​

Principal Members

(Owner.FirstName) (Owner.LastName)

Qualifications/Experience

(number) years of experience as a farm hand at (farm name), plus an additional 5 years of experience as the farm manager

(Education)

(Operator.FirstName) (Operator.LastName)

(Experience)

Legal Structure

​ [Sender.Company] is a sole proprietorship.

Company Details

Our property is zoned for farm use, and we plan to use the land as follows:

X acres for pastured animals

X acres for produce

X acres for agritourism activities and events

Farm Assets

Greenhouse and propagation supplies

Farm stand (planned for 20XX)

Market Research

The demand for locally raised animals and grown produce is climbing at a rate of XX% per year and is expected to reach a total value of $XX billion by 20XX.

Consumer demand for free-range, pasture-raised animals is evidenced by farms like (name competitors) which have grown into valuations of (approximate company values) , respectively.

Regulations

​ [Sender.Company] is a licensed business in the State of [Sender.State] as of the year 20XX. We are in the process of applying for all of the necessary permits for constructing the farm stand, expanding the barn, and hosting on-site visitors to the farm.

Service Line

Product/service.

Services Include:

Pasture-raised animals

Produce cultivation

Public apple picking

Public hay maze

Special event packages

Marketing & Sales

Customer communications.

​ [Sender.Company] will communicate with its customers by:

Interacting with customers in-person via farmers markets, the farm stand, and through the leveraging of networking events.

Building an active social media presence on Instagram and TikTok.

Advertising agritourism activities like apple picking, hay mazes, farm trails, and other events.

Creating SEO-friendly blog posts on the company website to increase online presence.

Establishing listings with the local tourism board and activity guides.

Sales Strategy

​ [Sender.Company] 's product will be sold primarily in the (region) . The farm is located on a road with extensive car traffic, so we plan to build a farm stand on the property to capture attention and drive sales.

We also plan to build a social media presence and leverage local advertising to drive awareness of our brand. We will also attend farmers' markets within the region to meet customers face-to-face and build relationships.

Five-year plan

Year One: 20XX

Create a legal business entity

Apply for necessary licenses and permits.

Finalize farm layout.

Procure additional equipment.

Establish social media profiles.

Build a small farm stand.

Attend farmer's markets.

Year Two: 20XX

(List goals for year two)

Year Three: 20XX

Year Four: 20XX

Year Five: 20XX

​ [Recipient.FirstName] [Recipient.LastName] ​

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Farm Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Farm Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Farm Business Plan

You’ve come to the right place to create your farm business plan.

We have helped over 5,000 entrepreneurs and business owners create business plans and many have used them to start or grow their farms.

Below are links to each section of a small farm business plan template. It can be used to create a vegetable farm business plan, fruit farm business plan, agriculture farm business plans or many other types of rural businesses.

Sample Business Plan For Farms & Agricultural Businesses

• Executive Summary – The Executive Summary is the most important part of your business plan. It is a brief description of your farm, its products and services, potential market opportunity, and competitive advantage.
• Company Overview – Also called the Company Analysis, here, you will provide a detailed description of your agriculture business history, its products and other services, and business structure.
• Industry Analysis – In the Industry Analysis, you will provide an in-depth analysis of the industry in which your farm operates including industry trends, market size and growth, and government regulations.
• Customer Analysis – In the Customer Analysis, you will identify your target market and provide insights into their purchasing habits. You will also create customer segments and discuss your marketing strategy for reaching them.
• Competitive Analysis – In the Competitive Analysis, you will identify your direct competition and provide insights into their strengths and weaknesses. You will also discuss your competitive advantage and how you plan to stay ahead of the competition.
• Marketing Plan – The Marketing Plan includes a discussion of your marketing strategy and tactics along with your pricing strategy. You will also provide a budget for your marketing activities including attending farmers’ markets or advertising a farm stand.
• Operations Plan – In the Operations Plan, you will discuss your farm’s day-to-day operations. You will also provide your business goals that you plan to achieve and a budget for your operating expenses.
• Management Team – In this section, you will provide a brief overview of the farm owners and farm management team, their experience in the agricultural industry, and the organizational chart.
• Financial Plan – In this section, you will provide three-year financial statements for your farm. This will include your income statements, projected balance sheets, and cash flow statements.

Next Section: Executive Summary >

Farm Business Plan FAQs

What is a farm business plan.

A farm business plan is a plan to start and/or grow your farm business. Among other things, a good agriculture farm business plan outlines your business concept, identifies your target audience , presents your marketing plan and details your financial projections.

You can  easily complete your farm business plan using our Farm Business Plan Template here .

What Are the Main Types of Farms?

There are many types of farms. Some have commercial farms that produce crops and agricultural products for sale. Others have cooperative farms owned by people who pool their resources together and share profits among themselves. There are also vegetable farms, dairy, micro, organic, poultry, subsistence, or urban farms.

What Are the Main Sources of Revenues and Expenses for a Farm?

The primary source of revenue for a farm is the sale of its farmed goods such as rice, corn, milk, beef, chicken, depending on the kind of farm a business is.

Some key expenses for a farm are labor expenses, production costs like irrigation, fertilizer, water, and machinery maintenance.

How Do You Get Funding for Your Agriculture Business?

Farm business plans often receive funding from bank loans. Financing is also typically available from grants offered by local and state governments. Personal savings, credit card financing and angel investors are other funding options. This is true for starting any agricultural business.

What are the Steps To Start a Farm Business?

Starting a farming business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

• Develop An Agricultural Business Plan - The first step in starting a business is to create a detailed agriculture business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  It should also include your business goals and mission statement. You can quickly complete your farm business plan using our Farm Business Plan Template here .
• Choose Your Legal Structure - It's important to select an appropriate legal entity for your farm business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your farm business is in compliance with local laws.
• Register Your Agriculture Business - Once you have chosen a legal structure, the next step is to register your farm business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 
• Identify Financing Options - It’s likely that you’ll need some capital to start your farm business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 
• Choose a Business Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 
• Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 
• Acquire Necessary Farm Equipment & Supplies - In order to start your agricultural business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 
• Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your farm business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful farm business and agribusiness planning:

• How to Start a Farm Business

Where Can I Get a Farm Business Plan PDF?

You can download our free farm business plan template PDF here . This is a good farm business plan template you can use in PDF format.

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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Updated On : September 2, 2023

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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.

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Details of a Small Farm Business Plan

• Swarthmore College

• Ohio Wesleyan University
• Brandeis University
• Northeastern University
• Urban Farms
• Planting Guides
• Indoor Gardening

Writing a farm business plan can be a tool for you to plan your farming business. It can also be a requirement of securing grants and loans for your farm business. The process of writing a farm business plan may seem overwhelming and intimidating at first, but if you break it down into its component steps, it becomes much more manageable.

What Is a Business Plan?

A business plan is a roadmap for your small farm . It is both process and product. During the writing of a farm business plan, you'll develop an overall vision and mission for your business. You will think about your short- and long-term goals. You'll define the steps needed to achieve those goals. You'll set the direction for your business to develop over the next five years.

If you're already an established business, your new business plan will show where you're going next. A good business plan should be:

Mission Statement

Your farm’s mission statement is your overarching purpose for your business:

• Why does your farm exist?
• What purpose does your farm serve?
• Where is your farm headed?

This is beyond “make money.” This mission statement is based on your values and your core identity as a small farm.

The goals in your business plan are the specific, measurable “things” you will achieve with your small farm. Short-term goals are defined as those that you will complete within one year. Long-term goals are those that take longer than one year to complete.

SMART Goals are:

• Rewarding, and have a

Background Information

In this section of your business plan, take inventory of what you have right now:

• Where are you located?
• How many acres of land are you farming?
• When did you begin farming?
• How are you currently operating?
• What general practices do you use for such things as conservation, tillage, environmental impact, and marketing?

Farm Strategy

This is where your business plan gets to looking forward. You are going to formulate your farm strategy from now into the next five years or so.

• Gather information and research markets. Make sure that your farm plan fits into the general market in terms of supply and demand. Investigate and analyze industry trends, identify competitors, and define buyers.
• SWOT Analysis. This is an analytical tool that can be used in making decisions. SWOT stands for: strengths, weaknesses, opportunities, and threats. As a business, analyze your internal strengths and weaknesses. Then look externally at what opportunities and threats exist - competitors, new markets, government regulations, economic conditions, and so forth.
• Create alternative strategies. Looking at the information you've gleaned and the analysis you just did, think through options for your farm strategy. Don't rely on price alone; economies of scale are challenging on the small farm level.
• Don't jump to one conclusion immediately. Really spend some time fleshing out the specifics of some of the strategies and looking at their advantages and disadvantages. Try to find options that combine your internal strengths with opportunities in the external environment.
• Look at all your strategies, then reread your mission statement. The ideal farm plan will fit your mission best.
• Write an implementation plan. This is where you write a plan that will make your new strategy happen.

Marketing Strategy and Plan

In the next part of your farm business plan, you develop and outline a marketing strategy for your products and services. This can build on the research you did in the previous step. For each product, include ​the price, placement, and promotion ideas. Consider how you will convey real and perceived value to your customers.

Management Summary

This part of your business plan details your farm business’ structure. Everyone who is involved in the management of the business should be listed here. External resources are listed here as well.

Financial Analysis

In this section, you will need to detail the financial aspect of your farming operation. List your current finances in detail, including all income and operating expenses. Referring to your new strategy, you will forecast what is needed for future growth and to meet the goals you have outlined in terms of capital. Include what your future operating expenses will be.

Pulling It All Together

Writing a farm business plan is a big project. Don’t let that put you off. Your plan can be as simple as it needs to be for right now. Begin with your mission statement and goals. Do your homework by analyzing markets and researching competitors and trends. Have fun brainstorming alternative strategies and let them marinate a while. Take it one step at a time.

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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

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.

10+ Agriculture Business Plan Examples

1. agriculture business plan.

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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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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.

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Kroger and Albertsons Head to Court to Defend Merger Plan Against US Regulators' Objections

(AP) -- Kroger and Albertsons will defend their plan to merge – and try to overcome the U.S. government's objections – in a federal court hearing scheduled to begin Monday in Oregon.

The two companies proposed what would be the largest supermarket merger in U.S. history in October 2022. They say joining together would help them rein in costs and better compete with big rivals like Walmart and Costco.

But the Federal Trade Commission sued to try to block the deal, saying it would eliminate competition and raise grocery prices in a time of already high food price inflation. The commission also alleged that quality would suffer and workers' wages and benefits would decline if Kroger and Albertsons no longer competed with each other.

The FTC is seeking a preliminary injunction that would block the merger while its complaint goes before an in-house administrative law judge. In a three-week hearing set to begin Monday, U.S. District Judge Adrienne Nelson is expected to hear from around 40 witnesses, including the CEOs of Kroger and Albertsons, before deciding whether to issue the injunction.

The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming all joined the case on the FTC's side.

Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith's and Harris Teeter. Albertsons, based in Boise, Idaho, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw's. Together, the companies employ around 710,000 people.

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Government plans to raise import taxes on vegetable oils to help farmers, Report

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Mumbai: India is considering raising import taxes on vegetable oils to help protect farmers reeling from lower oilseed prices, two government sources said on Wednesday.

The move, which is likely to be announced in the coming weeks, could dampen demand and reduce overseas purchases of palm oil, soyoil, and sunflower oil.

"We are exploring all options to help farmers. Increasing import taxes is one of the options," said a government source who asked not to be named in line with official rules.

There is a proposal from the farm ministry, and the Department of Revenue, which falls under the finance ministry, will take a final call, said another government official, who also declined to be named.

In 2022, India, the world's biggest vegetable oil importer, abolished basic import taxes on crude vegetable oils to cool prices. New Delhi still levies a 5.5 per cent tax, known as the Agriculture Infrastructure and Development Cess.

A government spokesman did not immediately respond to a request for comment.

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China’s Bocom Plans Rare Interim Dividend as Profits Slide

• Bank sees drop in first half profit as interest margins narrow
• Bocom is first of China’s biggest banks to report earnings

Bank of Communications Co. , one of China’s largest state-owned lenders, announced its first interim dividend in more than a decade despite a decline in profits.

The Shanghai-based bank, part owned by HSBC Holdings Plc , declared a payout of 13.5 billion yuan ($1.9 billion), or 0.182 yuan a share, according to a filing Wednesday, marking its first semi-annual distribution since 2010. Net income for the six months ended June 30 fell 1.6% to 45.3 billion yuan.

Sri Lanka Advances Climate Resilience with FAO's Initiative on First Climate-Smart Agriculture Investment Plan

COLOMBO (News 1st); In a bid to combat the escalating challenges posed by climate change, Sri Lanka has commenced the formulation of its first Climate-Smart Agriculture (CSA) Investment Plan. 

This landmark initiative, funded by the Green Climate Fund (GCF) and implemented by the Food and Agriculture Organization of the United Nations (FAO) in partnership with the Ministry of Environment and Ministry of Agriculture, aims to develop a comprehensive strategy to safeguard the country's agricultural sector from the adverse impacts of climate change.

Sri Lanka, with its tropical climate, is highly susceptible to the effects of climate change, consistently ranking among the top ten countries at risk of extreme weather events according to the Global Climate Risk Index. Projections indicate significant shifts in weather patterns, including rising temperatures, erratic rainfall, and increased frequency of extreme events, all of which have already begun to diminish agricultural productivity and water availability across the island.

Agriculture in the dry and intermediate zones is particularly vulnerable to the changing and variable climate due to climate change, with research projecting an average 10-12% yield reduction if appropriate interventions are not implemented to mitigate these effects. The CSA Investment Plan is designed to be a strategic and comprehensive blueprint for fostering agricultural development that is resilient to climate change.

Through this plan, FAO specialists, including both international and national experts, will work closely with a wide range of stakeholders—including government bodies, the private sector, and academia—to assess national climate finance priorities and develop innovative investment mechanisms tailored to the unique challenges faced by Sri Lanka’s agricultural sector.

Prabath Chandrakeerthi, Secretary of the Ministry of Environment and representative of the National Designated Authority, highlighted the significance of this initiative, "Sri Lanka's vulnerability to climate change is a pressing concern, particularly for our farmers who are at the frontline of this crisis. The development of a Climate-Smart Agriculture Investment Plan is a timely and necessary step to equip our agricultural sector with the tools and resources needed to adapt and thrive in a changing climate. We are committed to working collaboratively with all stakeholders to ensure the success of this initiative."

This investment plan will bridge the gap between farmers and investors, attract private sector investment for climate-smart interventions, and open new avenues for youth and young entrepreneurs. 

Vimlendra Sharan, FAO Representative for Sri Lanka emphasized the importance of this initiative, "Climate change is not a distant threat—it is a present reality that is already affecting our farmers and our food security. The Climate-Smart Agriculture Investment Plan will be a vital tool in ensuring that Sri Lanka's agricultural sector can adapt to these changes and continue to thrive in the face of adversity."

This workshop marks the first of several consultations planned as part of the CSA Investment Plan's development process, reflecting FAO's commitment to an inclusive, participatory approach that brings together all relevant voices in the fight against climate change.

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BC United government would move forest ministry to Prince George

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BC United leader Kevin Falcon said Tuesday that if his party is elected this fall he will make changes to B.C.’s forestry sector that he says will create jobs, reduce bureaucracy and restore the province’s reputation as a leader in forestry.

This would mean moving the forest ministry's head office to Prince George, with Falcon calling it a way to better ensure employees of forestry-dependent communities would have more of a say in decisions the government makes.

And he would rename "Crown land" to "public land," he said, a move that would involve working with First Nations and carrying out revenue sharing reforms.

“The NDP have failed the forestry sector and the families that depend on it by creating confusion, increasing bureaucracy, and driving investment out of B.C. and our local communities,” said Mike Bernier, BC United MLA for Peace River South. “BC United’s plan will restore confidence in our forestry sector by cutting red tape, restoring industry/community confidence, and ensuring our forests are managed sustainably for future generations.”

Under the plan, a BC United government would address job losses and mill closures “by expediting timber access decisions, eliminating confusion over fibre access, and investing in forest land to ensure a stable, sustainable timber supply," according to the press release.

Falcon said the permitting process is too slow because logging companies are forced to predict the impact of their harvesting operations across a wide spectrum due to regulations imposed by the province.

“We will reduce red tape and cut bureaucracy, adopt outcome-based performance measures, and eliminate regulatory duplication,” said Falcon. “We will also ensure faster permitting, reform BC Timber Sales, adjust stumpage rates to a monthly system, and stabilize policies to give businesses the certainty they need to thrive.”

A BC United government would adopt a wood-first policy for public building projects, with incentives, Falcon said. He also promised more investment in forestry research.

Falcon said the province’s resource tax revenues plummeted $3 billion last year “due to David Eby’s hostility toward resource development.”

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Daiwa plans foray into Australian farm loans and real estate

Daiwa Securities Group is eyeing Australia for its first expansion into the agricultural sector abroad, part of a wider push to boost lending and direct investment in the country’s real estate and renewable energy sectors.

The renewed push in Australia comes as Chief Executive Officer Akihiko Ogino seeks to increase income from outside Japan by about 40% in the next few years, and follows an earlier investment by the Tokyo-based firm into the venture capital arm of Australia’s national science agency.

Japan’s long-standing farm labor shortage has encouraged agricultural industrialization, offering a model for similar technological improvements for fresh produce growers in Australia, Yoshida said. The brokerage could make direct investments in these farms or provide loans.

"If they grow and if we can bring them to Japan, that would be wonderful," Yoshida said in an interview last week following Daiwa’s first Japan equities conference in Sydney and Melbourne. They can "collaborate with Japanese companies and grow further."

The firm wants to continue its focus on lending and advisory in the clean energy space, leveraging its five staff in Sydney and Melbourne, Yoshida said.

Chairman Seiji Nakata told Bloomberg News last year the firm was looking to expand in Australia to take advantage of the country’s strong demographics and fast-growing pension pool.

Through its private investment arm Daiwa PI Partners, the firm backed Main Sequence Ventures, the venture capital arm of Australia’s science agency that has funded companies including plant-based meat maker V2 Food.

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Andhra Pradesh Secures Funding to Complete Polavaram Project by 2027

Andhra pradesh chief minister n chandrababu naidu announced that the polavaram project is scheduled for completion by march 2027. the union government has sanctioned rs 12,157 crore over the next two fiscal years. the project aims to benefit agriculture, hydropower generation, and water supply in the region..

Andhra Pradesh Chief Minister N Chandrababu Naidu announced on Wednesday that the Polavaram Project is scheduled for completion by March 2027. He expressed gratitude to the Union Government for committing Rs 12,157 crore over the next two fiscal years towards the project's development.

Addressing a press conference at the Secretariat, Naidu revealed that Rs 6,000 crore would be allocated in the current fiscal year, 2024-25, with an additional Rs 6,157 crore earmarked for FY26. He described the development as 'joyful' and 'historic,' thanking Prime Minister Narendra Modi, Union Finance Minister Nirmala Sitharaman, and Union Jal Shakti Minister C R Patil for their support.

The Polavaram Project, located on the Godavari River in Eluru district, aims to store 194 tmc of water, irrigate 7.2 lakh acres, supply drinking water to 28.5 lakh people, and generate 960 MW of hydropower. Naidu emphasized that the project will also prevent water wastage into the sea and mitigate potential famine conditions.

(With inputs from agencies.)

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