How to write a business plan?

How to create a business plan - how to write a business plan

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photo from Nemo on pixabay

I recently found out that if you apply for a Canadian Agriculture Loan Act loan you need to write a business plan. I found this out when I was doing research for my how to get money to start a farm post. It makes sense because they are offering you half a million dollars to start your farm. Why wouldn’t they want you be serious enough to write a business plan? So because I found that information out, I am now writing this post about how to write a business plan. I am going to get information that will pertain to the farm because hey that is what we are talking about here.

A business plan is basically a map of where you are going to go with you business. It lets people know where you are and where you going. Therefore, it is very important to write a great business plan, so that you will be able to get the money you need.

How to write a business plan for a farm

A business plan is going to focus on a few things.

  • A great summary of what you are proposing.
  • An overview of the business’ aims. In this case it will be the farm’s aim.
  • A summary of what the product or service is going to be. If you are going to produce vegetables or do the farmer’s market, you want to talk about that.
  • A management breakdown. In our case this doesn’t really apply unless you are starting a farm with multiple people.
  • A financial forecast which include market research or product information. Do you have to do market research as a new farmer? I am not sure about that one.

A business plan is going to be broken down into parts. From what I can tell, it is very similar to an essay.

There is going to be an introduction.

  • Here is where you put the summary of the details of the business. In this case it is going to be your farm.

There is going to be body.

  • Things you want to cover in this sections.
    • What are your business goals, so in this case it is going to be what do you want to do with your farm. i.e are you going to be doing cash crops, livestock or agriforest.
    • What your business is going to do in laymen’s terms, so it is crystal clear. Here you can talk about what particular things your business is going to do differently. (I am not sure if this would actually apply to a farmer, but it is worth noting.)
    • What the market is like for your business, so you should take a look at your competitors. (Again not sure if it applies to farmers.) You would also outline who you are targeting, so think about  a farmer’s market, restaurants or co-ops.
    • What your financial forecast will be like.
      • Here you are going to talk about what your strategy is going to be, for example, how are you going to be able to pay the money back.
      • You can also talk about how you are going to price things. Think about goods you are going to sell and for how much.
      • Also, talk about which markets you are going to focus on, and if you have any plans to do some advertising. In some cases a farmer might do some advertising if they sell goods right on their farm.
      • In your financial forecast, you are also going to identify who your key personnel is going to be. Outline what their experiences are, and how many employees you might need.
      • In this section, you might want to identify where you are going to be located.
      • Talk about any special equipment you might need. This is particularly important for farmers because depending on what type of farming you are going to do. Think about what type of equipment you will need based on the type of farming. For example, if you are going to have potatoes, you need a special harvester.
      • Specify how much money you want from them.
      • Establish what the key risks are and how you are going to address them.
      • Talk about what you think your numbers are going to be, so how much you are going to make.
Finally, there is going to be a conclusion.
  • Here you are going to highlight the key points of what you talked about.  In most case, it is going to be about the numbers: how much you want, how much will you make, and when can you pay it back.

This gives you a good idea how to write a business plan.  I am not an expert in business planning, so I did do some research for this particular post. I got some information from the BBC strangely enough.   I also found a way more in depth ‘how to create a business plan’ at the Small Business Administration in the United States. Also, FCC provides a business plan template to help farmers. This is one of the keys factors in the possibility in getting a loan from FCC.

Having said that, here is what is consider business plan essentials.

  • Management background.
  • What are the business goals.
  • An assessment of the competition.
  • Research that backs up what you said the forecasts will be.

Conclusion

Writing a business plan is hard work, but if you want to start farming you better be ready for hard work. I know it isn’t the same kind of work, but it is a necessary part of the process to get the money you need to start your farm business.
What things are you going to include in your business plan?

 

Comments

  1. Competition definitely applies to farmers. While there are often farm associations that connect many farmers with the same distributors and retailers, and promote best practices, you still need to know what your competitors are doing, so you can do it better. Can you cut costs by another 1%? If your margins are lower than your competitors, why? Is there something special about your farming techniques that can give you an edge with distributors. There is a lot to think about.

    • Thanks for the comment Jessica.

      Knowing what your competition is doing is very important, and having a plan of attack can really make a difference.

      Sometimes it isn’t the techniques that will give you the edge, but the tactic you use to get ahead of other farmers.

  2. adeyanju ademola says:

    i am interested, in coming to start at canada, i have being engaging in farming here in Nigeria, i love to expand my talent,

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