Since my recent college graduation, my parents and I have been working on a succession plan. When we talk about the future of the farm, my dad thinks we’re just fine the way we are; we don’t need to grow and I should be satisfied with the current operation. On the other hand, I would like to see us grow and someday develop a specialty niche and a brand for our family farm. Right now, we’re stuck and don’t know what to do next. What do you recommend?
A very important first step is to settle on a set of common goals. Every family can rally around common objectives related to operational integrity, financial security and leadership development. It helps to align your thoughts and ensure that, as the conversation unfolds, you’re focused on the top priorities.
From there, I recommend you write a business plan—one that stretches your imagination and serves as an instruction manual for implementing your vision. It should be an individual effort based on a single vision. Business plans are too often relegated to a cookie-cutter document written to secure financing or satisfy a governmental agency.
Start with a few blank sheets of paper, and don’t quit until you’ve written a description of the business of your dreams. Your explanations should be clear and concise. The instructions should be so basic that anyone could read your plan and help you implement the steps. Planning also allows you to envision and then test your theories. If they don’t work on paper, they won’t work in the real world.
A complete business plan should include these five parts:
1. Vision. Your vision is a verbal description of the finished product. It might be an essay with enough details so that anyone can understand what your ideal business looks, acts, feels and sounds like.
2. Specific goals. A plan should include short-range, intermediate and long-term goals. Short-range goals are things that you will achieve in the next three years. An intermediate time frame might run from three to five years, and a long-term time frame, five to 10 years. A complete plan should include at least three goals for each time frame. Goals should be specific, measurable and timely.
3. Action plans. There should be an action plan to support each goal. It might help to think of an action plan as a to-do list for achievement. Each action plan should be written and executed in a logical order.
4. Business systems. A business plan doesn’t have to spell out everything related to the operation, but it does need to include functions such as leadership, management, record keeping, complex processes and finances.
5. Performance specifications. A business can successfully function and improve only in the areas where owners and managers keep score. Evaluating progress and adjusting to actual results will help to better manage the operation. Budgets, capital expenses, investments and income projections will also help in the process.
Good investment. A business plan should be written as soon as you consider starting or acquiring a business. If you don’t have one, create one as soon as possible—and keep it updated for the duration of the business. It will be the best investment you’ll ever make. Business opportunities can be added or eliminated using a planning approach. Winging it is not healthy.
Remember, a business plan is a written instruction guide for building your business. It is written in a form that allows anyone to read it and understand what you’re building and helps you create the farm operation of your dreams. Best of luck!