Whether you're a seasoned farmer or rancher, an aspiring farmer looking to venture into farming or ranching, or a farm business owner who wants to have a strong plan as they transition into another farm business, it’s helpful to know how to write and use a business plan. This will allow you to maximize your time, understand where you need to focus, engage with the right people, and nail your marketing strategy.
Farming is like any business, it pays to have a solid plan to work from so you know where you're headed. In this article, we cover how to write a business plan for your farm, what it should include, some examples, why a business plan is important, and how to find help if you need it.
Why Do You Need a Farm Business Plan
A farm business plan is a road map that helps you identify goals, strategies, and resources to succeed. It is the WHAT, HOW, and WHY that drive your business. It can help you test your business idea, reduce risk, and make informed decisions. For a farm, it can also help you come up with a budget, projections for the next few years on income and expenses, create a core marketing strategy, and build a solid foundation. These things are so important to understand as you start your farm business.
Key Takeaways from this Article:
A farm business plan will clarify your ideas
Spot potential issues and challenges
Give you a plan of action and goals
It can help you get funding if you need it
Why Have a Business Plan?
Here are 5 reasons why having a farm business plan can make your farm dream succeed.
Business Planning is Proven to Help Grow Your Business
According to the Harvard Business Review, entreprenuers who write down their business plans are 16% more likely to achieve viability than entrepreneurs who didn't plan. And with the staticis of 50% or more of businesses failing in their first 2 years, any little bit helps.
Gives Visibility into your Milestones and Budgeting
Having a farm business plan helps keep your business on track by helping you together your budget, goals and milestones that you see for your business.
Helps Find Funding
If you need to find funding they will most likely require you to have a business plan. If you already have the plan, it shows that you've done your due diligence and planning. It also shows commitment, professionalism, and organization.
Reduces Risk and Liability
By having a farm business plan you can verify if your business idea will succeed. A business plan will ask you to come face to face with some hard questions about if your business will succeed. It's better to have these conversations upfront.
Estabilish your Vision and Goals
You know that old saying about a dream without a plan is just a wish. Having a firm plan gives that dream a fighting chance. Writing down the how, what and why of your plan is vital to your success.
Things They Don't Tell You About Business Plans
You don't have to have a business degree to write a business plan. We've been helping farmers for a long time, and we see that everyone does business a little differently. But the ones that we see succeed have a solid plan and keep going. We've added some tips below to show you what most articles forget to tell you about business plans.
What It Looks Like
Just so we're all on the same page, there is no wrong way to write a business plan. It doesn't need to be a specific length, and you can take the examples and cut and paste to make it your own. This is just a place to start. If you have an outline for your business plan, that's better than nothing. Jot it down, come back to it, and revise. Play around with ideas and make this business realistic and yours.
Your Business Plan Can Change
The market might change around you. For example, let's say that the seeds that you could find easily before are harder to find and much more expensive now. That could be good or bad for your business. You might decide to raise the seed yourself the next year and sell locally. This pivot in your business may be more lucrative than selling the original plant. But this will depend on your market, who you can sell to, how much property you have to grow, whether you have the infrastructure already, and whether you have sellers lined up. There are a lot of questions to answer. Those questions are what you work out in your business plan. It's the place to ask - and answer - all the hard questions. This isn't supposed to be a painful exercise but instead one in which you ask yourself the hard questions before you invest time and money.
Your Dream (Farm) Becoming Reality
When it's all said and done, the real work of business is getting up every morning and making your dream come true. Your business plan should be the breath you breathe into your business. Go ahead and dream, pour your idea on this paper, but make sure to back up your idea with a plan, facts, and data that show this plan will work, and what obstacles and help you need on the way.
Farm Business Plan Ideas
Whether you are planning to raise cattle, sheep, pigs, or oysters, or grow corn, vegetables, or flowers, having a business plan can help you keep you organized and remind you where to go next. If you are organic farming, planning to raise beef cattle, or even urban farming, knowing how to plan a farm business is vital. Setting up a solid business starts with a business plan.
The 5 C's of a Farm Business Plan
A business plan is not a document that you write once and then never look at it again. It can help keep you on track, it can help you remember what you started out doing and how you planned on doing that. It doesn't need to stay the same, either. This can evolve as your business evolves.
There are 5 Cs of a business plan. Concept, Company, Customers, Competition, and Cashflow
All of these aspects are vital to the health of your business. Your business plan just helps you understand them better.
Farm Business Outline
This is a farm business plan outline. Print this out, copy and paste it, and add to it, but more than anything, make this your own.
Executive Summary:
In this area, you will talk about what business you plan on starting. This can also be an add-on to your current business.
Business Concept:
Clearly state the type of crop or livestock you will raise. Is it beef cattle, dairy cows, pigs, sheep, goats, poultry, etc? What are the primary products you will sell (meat, milk, eggs, wool, etc.)?
Mission Statement:
Define your farm's purpose and values, including your niche, which includes any focus on sustainability or ethical practices.
Financial Highlights:
Briefly summarize projected revenue, expenses, and profitability.
Company Description/Business Overview:
This describes your business in detail.
Business Structure:
Specify your legal structure (sole proprietorship, partnership, LLC) and ownership details. (It's a great idea to have a to-do list as you write this out so that you don't forget to set up things if needed.
Location:
Describe the farm's geographic location, including land size and accessibility. If you don't have land, you can describe what is needed.
History:
Briefly explain the background of the farm, if applicable. Or your background in this farming endeavor. If you don't have a background, you might talk about how you plan on learning.
Objectives:
Describe in detail what you want to accomplish on your farm and how you're going to make that happen. What obstacles are in your path? How will you get around them?
Customer Market Analysis:
Now, you will write an overview on the market, who you plan to sell to, how you plan to reach them, how you will stay in business, and how you'll handle bumps in the road. what contingencies you will have in place.
Industry Overview:
Analyze the current state of the farming industry you plan on getting into, including market trends, demand, and price fluctuations.
Target Market:
Identify your primary customer base (local shops, grocery stores, restaurants, direct-to-consumer sales) and their specific needs. You can also talk about any special ideas you have, like a locally sourced vegetable food truck, u-pick berry patch, CSA, Airbnb, or events.
Competitors:
Analyze local and regional competitors, highlighting your unique selling points to differentiate your farm. What makes your farm unique? How will you stand out?
Products and Services:
In this section, think about what you plan to sell. What makes your product different, better or unique?
Breeds:
Specify the breeds of animals/crops you will raise and why you chose them (e.g., high-quality meat, milk production, adaptability to climate, rare breed seeds, etc.)
Product Range:
Detail the specific products you will sell: cuts of meat, dairy products, eggs, honey, flowers, vegetables, or grains.
Quality Standards:
Explain your quality control measures to ensure product safety. Make sure you've looked into local laws regarding what you can and cannot sell.
Marketing Strategy:
The marketing section of your strategy asks you to think about how you will reach your audience.
Branding:
Develop a recognizable farm brand image, messaging, and voice. How will you have this done? Will this be a professional who makes this for you? Do you have a cousin who is a graphic designer?
Sales Channels:
Outline your sales strategy, including direct sales to consumers, wholesale markets, farmers' markets, and online platforms. How are you going to reach your customers? How will you keep them? How do you find more just like them?
Advertising and Promotion:
Identify marketing channels like website, social media, local advertising, and community engagement. How will you get the word out about your farm?
Operational Plan:
Discuss how you will keep organized on your farm. What happens when an order is placed? Figuring this out ahead of time will save you lost customers.
Farm Management:
Describe your farm management practices from seed to sale.
Facilities:
Detail the existing or planned farm infrastructure (barns, pastures, fencing, water systems, irrigation, processing facilities, equipment, what you will need on-farm and off-farm to produce your product, etc).
Sustainability/Animal Wellness Practices:
If applicable, explain your commitment to environmentally friendly or animal welfare practices. How will you keep these standards up?
Organization: How will you keep track of your operation? How will you know what farm tasks you need to do, what plants need to be harvested, how long your cows have been in field A, and how much inventory (feed/seed/irrigation line, etc) you have left in stock? How will you communicate with your team members? Where will you keep track of your finances? Consider a farm management software like Farmbrite that helps you keep track of all your farm needs.
Cost - Financial Projections:
In this section of your farm business plan, you will think about and write out your plan for your farm finances. This includes your farm accounting, your costs to start up, the profit you will make, and how long that might take.
Startup Costs:
Itemize all initial expenses (land purchase, seed or animal acquisition, construction, equipment, permits).
Operating Expenses:
List ongoing costs (feed, veterinary care, labor, employees, utilities, insurance).
Revenue Projections:
Estimate expected sales based on market demand and pricing strategy.
Profitability Analysis:
Project cash flow and profitability over a set period (e.g., 3-5 years).
Management Team:
Key Personnel: Identify the key individuals involved in the farm operation and their roles (farm manager, veterinarian, marketing help). Think 3-5 years, so it may start with just you and add as you grow. This is the time to think about how to make that growth happen.
Experience and Expertise: Highlight the relevant skills and knowledge of the management team.
Important Considerations:
Local Regulations:
Understand and comply with all local zoning, environmental, and animal welfare regulations.
Permits and Licenses:
Obtain necessary permits to operate a livestock farm.
Risk Management:
Identify potential risks (disease outbreaks, weather events) and develop mitigation strategies.
Financial Sustainability:
Ensure your pricing strategy is competitive while covering all costs and generating profit. If you have trouble with this, ask for help. Take constructive feedback and ask questions.
Addendums, Sources, and Research
Lastly, you include any research or findings that you came up with during your search. This will be important if you have a partner that you want to bring this information to later on.
There isn't a one-size-fits-all farm. Think about what kind of farm business you want to build and then put that down on a sheet of paper, on a worksheet we've provided here, or in a spreadsheet. It's just important that you work out all the bugs before you start selling anything.
Farm Business Plan Templates
Here are some example templates to get you started. Print them out or fill them out online!
Livestock Ranch Business Plan Template
Multi-Crop Grower Business Plan Template
Generic Farm Business Plan Template
Finding Help For Your New Farm
Sometimes, when you start a business, it can feel like you're on your own. If you need help or have questions while you're getting started, there are some options. There are many companies that want to help you succeed as a small business/ new business. It's wise to seek their help and advice. Oh, and if your farm neighbor offers some advice, take it with gratitude, buy them some coffee, and ask a lot of follow-up questions, too!
Getting Help Writing a Business Plan
You may find that you need help writing your business plan. If you are really struggling with your business plan, you may want to contact the Small Business Association or your local ag office. Finding a mentor can help support your efforts.
Finding Funding For Your Farm
There are many places to find funding for your new farm. We've created this calculator for you so you can calculate how much farm funding you need.
Why Don't People Write Business Plans
With all the great reasons we've outlined, like being successful and having goals outlined, why wouldn't you write a business plan? Well, we all think that we're going to remember everything, that we have asked ourselves all the questions we need to, and that we don't need help. Well, I guess I have to ask you if that is a chance you're willing to take? Don't take our word for it; write down your business ideas in a business plan and test that theory. See if there are ideas, concepts, information, or other thoughts that you hadn't thought about or all the way through before.
It's ok to dream about what you want to come true because that's what got you motivated to start this business in the first place. But the business plan is your opportunity to both dream and poke holes in your idea. Your business plan makes your dream come to life with action. This is your opportunity to write a business plan for your dream. We dare you.