business plan

Farming Cheat: Draw up a business plan for your farm

Whether your farming business is new or existing, drawing up a business plan is a task that should be taken seriously. Start by thinking about who is going to read it and what you are trying to communicate.

For example, if you’re presenting to a financier, you must focus on what you have as collateral, how you plan to repay the loan, your farming experience and your history of income.

If you’re submitting the plan to attract investors, it is best to concentrate on growth potential, how you plan to create value and how the rates of return on the investment will increase over time.

However, what any plan should show is that the farming business is sustainable, viable and responsible (both socially and environmentally) – these factors have become important in a time when the emphasis has moved away from pure shareholder capitalism to stakeholder activism.

So remember that your plan needs to demonstrate how the farm’s key natural resources like land and water will be used responsibly and remain productive over time.

The numbers in your business plan should shed light on the following key pieces of information:

■ Your skills and experience as a farmer, as well as those of key personnel, must be discussed in detail to show the depth you have in your management team.

■ The value of current and long-term assets, with estimated increases by way of new purchases.

■ Any planned purchases of land or equipment must be detailed, and the impact of interest on financing must be discussed.

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