A farm operation is a business, and any business, big or small, new or old, needs a well-thought-out plan as a jumpstart to the next step. A business plan will not only set you up with the vision and tools you need to fulfill your own goals, but it is often required by financial institutions for you to secure a loan.
The more realistic your plan is, the better chance you have of fully understanding your business scenarios, opportunities, and challenges, all of which is necessary to secure the funding you need. This is especially important if you’re starting out fresh in farming without any prior history in the industry.
Getting Started
It can be overwhelming trying to figure out everything you need in your business plan. You should start by doing your research, reading examples, and discussing it with an experienced and qualified financing expert.
Your business plan should include things like your objectives and strategies for the future, how your farm is going to be managed and staffed, where you’re going to plant your crops, whom you are selling your crops to, financial projections, and marketing tools for your business.
If you need a template to get started, MSU Extension provides that resource here, or ask your financial services officer. Most financial institutions, like GreenStone, have sample business plan templates and staff with years of experience working with customers on this exact opportunity.
Checking In
Any business plan is a living, breathing document. It shouldn’t be created just to sit in a drawer and collect dust.
You should review your business plan at least every few years, if not more, to make sure you’re meeting your goals and staying on track. It’s also okay to adjust your business plan as you go depending on the state of the market.
Outside of checking your business plan regularly, you should also review your finances and make sure your projected profit numbers are close to your actual numbers. This review should happen at least every few months.
If your actual numbers don’t align with your projected numbers, this is a good opportunity to step back and look at your shortcomings and how you can edit your business plan to potentially bring in more income.
Where new business owners go wrong
Sometimes when developing a business plan for the first time, new business owners shoot a little bit too high for the moon. History has shown that businesses that don’t pan out usually have unreasonable financial goals and operate under the assumption they will have a much larger income than they end up with.
This happens when little research is done on the market ahead of time. You should spend time researching the market to make sure your business is positioned to be in it for the long haul.
Surround yourself with support
From day one on the drawing board, to several years down the road, you need a team of mentors and industry leaders to support you. Your team can help take your business plan from a piece of paper to a booming business.
GreenStone is happy to be a part of that team. We will come sit down at your dinner table and help you map out a business plan before you even apply for a loan. We believe the earlier we can get to know you, the better we can serve you.
Through our CultivateGrowth program, we can help young, beginning and small farmers apply for grants and mentorship programs that can help with the early stages of developing a business plan.
Reach out to one of our experienced financial services officers today!
