Importance of Developing a Strong Ag Business Plan
Having a clear and concise business plan is an extremely important step in having a successful business. Creating a business plan is normally done in two parts. The first is creating the plan; the second is implementation. The more specific and detailed your plan is, the easier it is to implement and utilize to build your business.
What is a Business Plan?
A business plan is a document that explains the goals of your business, the methods or processes that will be used to attain those goals, and the time-frame needed to successfully achieve those goals. It is essentially a road map for how your business will operate and the direction it will take to get there.
Writing Your Business Plan
Before writing a business plan, extensive research should be done and evaluated to help prove your business’s viability and vitality. Benjamin Franklin’s famous quote, “If you fail to plan, you are planning to fail” is solid advice when developing a strong business plan. Having a better understanding of your competition, consumer trends, potential obstacles and other pitfalls will help establish goals for your operation.
Matt Goerdt, Vice President of Lending for Community Savings Bank explains, “Each proper business plan should have some goals. Some well-defined goals can help define the success of an operation and determine if the operation is moving forward.”
Whether performing personal research or gathering information from trusted sources, collecting information is a crucial step for a thorough business plan. Strong business plans are very precise when describing their goals and processes.
Goerdt also adds, “Don’t be afraid to add some detail to your business plan. It can be a mistake to assume that the person reading the plan will have the same ideas and understanding of the operation.”
Your plan should be easy-to-read and easily understood without using jargon and undefined terms from your specific niche and/or industry. Establish clear sections to cover all relevant topics involving your business. Make sure to write out each stage and process of your business from starting to managing operations.
Many rural businesses focus on moving up in the supply chain to take advantage of profit potential and establishing closer consumer connections. Success of these operations are based on their ability to have connections and contracts in place with users and to deliver on those commitments. Your business plan should have a strong, strategic marketing plan and specific objectives for your operation.
Questions to Answer, Length of Your Plan & Your Audience
Rural agriculture encompasses a variety of businesses including manufacturing, processing, and direct sales. With such great diversity in the agricultural sector, business plans will differ depending on the nature and complexity of your business, stages of development, and your financial need. Strong ag business plans will answer the following questions and ensure the best quality of your plan:
- Who are we?
- What do we do?
- What do we have to offer?
- Why will someone pay for our product or service?
- What resources do we have?
- Why will we be successful?
- Why would someone participate/invest?
- How will we measure performance/success?
Strong business plans will focus more on the content and subject matter of the plan; not length. Strive for your plan to be clear, concise, complete, and adequately cover all necessary topics. Developing a well thought out, strong marketing strategy is vital to your plan and your operation’s success long term.
A strong ag business plan will also be adaptable to different purposes. One purpose is to be used as a way to showcase your company. Adapting your business plan based on your target audience, such as investors, suppliers, potential employees, and customers will be beneficial to your business’s success. Keep in mind that each audience will have different priorities when reading your business plan that you will have to address. For example, investors look for growth potential, while customers will look at your business’s stability and service.
Developing a strong business plan is only the first step. Actually implementing the processes within your business plan is equally as important. Having a clear and concise business plan will make it easy to perform the tasks that are required, reach goals, and keep your business sound and healthy.
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