Business Planning

No matter where you are in your farm business endeavor, either new or experienced, and no matter what type of business you operate, having a business plan in place helps you think objectively about your business and establish short and long-term goals, with specific strategies for managing financial, operational and human resource aspects of your farm business. You may construct a business plan as a proactive approach to starting your farm business, or you may develop a plan to help you transition into a new production system or expand on your existing operation. An excellent resource for learning about the components of a good business plan is the Sustainable Agriculture Research and Education (SARE) publication Building a Sustainable Business.

Before you begin developing your farm business plan, it’s important to take some time to consider lifestyle changes that may come with a career in farming. The USDA New Farmers webpage is a great resource for new and beginning farmers and they pose the following questions for those interested in a career in farming:

• Have you considered the economies of seasonal earnings?
• Are you able to take on the physical rigors of the job?
• Can you learn to make do and fix things yourself?
• Can you handle setbacks with determination?
• Are you prepared to work long hours, including weekends, early mornings, and late nights?
• Do you have the support of your partner or family? How will this decision impact your children?
• Do you have the patience to start a career with a steep learning curve and a long road to finally getting established?

Once you have carefully thought through these considerations, it’s time to make your business plan that will serve as a guide for your current and future farm business. A few important topics to include in your business plan are suggested below. These topics are taken from an online resource called AgPlan, which offers a more extensive framework for developing your business plan.

Executive Summary

• Give an overview of your farm business including current location, acreage, land use history, and your plans for the future of the business.
  
• What facilities and equipment do you currently have available?
• Is your farm business a sole proprietorship, partnership, corporation, cooperative, or LLC?

Operations

• What are you producing and how much do you produce? Do you need to comply with certain regulations or obtain any permits? See our section about Licenses & Regulations for more information.
  
• Think about the risks of farming - what potential risks exist and how can you make sure you are prepared for them? Using a simple SWOT analysis can be a helpful way to begin fleshing out the main ideas of your business plan. A SWOT analysis helps you analyze the strengths, weaknesses, opportunities, and threats that may affect your farm business.
• Will you have any employees? How will you manage personnel issues? See our section on Human Resources for more information.
  

Marketing

• What market avenue will you choose for selling your product?
• Who is your customer base and how will you advertise to reach them?
• How will you determine the price of your product?
• See our Marketing section for more information on addressing these questions.
  

Finances

• How do you plan on financing your business?
• How will you manage your budget?
  
• Should there come a time, how will you manage the transition of your business to someone else?
• How will you keep records of your finances? See our Finances & Recordkeeping section for more information.  

Resources to Help You Get Started Building Your Business Plan

• Sign up for these free online classes through the National Center for Appropriate Technology (NCAT) that will help you think through the planning process: Getting Started in Farming: An Introduction to Farm Business Planning
• Penn State Extension offers an excellent guide for developing a business plan.
• There are many ways to build your business plan, this is just one example from a northeast carrot farm, developed by Cornell University.  
• Farm Commons offers free legal resources that will help you build a strong farm business foundation.

If you are looking for additional information on business planning, please see our Resources page to find other publications and useful tools.