A written business plan can improve efficiency and profitabiliy.
Courtesy of University of Missouri Extension
Like any other business, a farm is more likely to succeed with a written business plan.
"A business plan can serve as a road map for your business," says Karisha Devlin, a University of Missouri Extension agriculture business specialist in Knox County.
"You are defining what your goals and objectives are," Devlin says. "You are saying who, what, when and where as far as what you produce, how you are going to market it, and the financing behind your business."
A written business plan is often a requirement when seeking financing to start a new business or expand an existing one, but a plan is a good idea even if you’re not looking to borrow money.
"You are not setting the next generation up to be successful if you are keeping everything to yourself," Devlin says. "Putting everything down on paper, not only for yourself but for others in your operation, helps everyone feel like a team and understand the direction that the operation is going. It really does lead to improved efficiency and improved profitability."
Devlin says experienced producers can use business plans to make better-informed decisions, whether it be exploring market options, mapping out a transition on the farm, adding more family members or preparing to sell or transfer the business.
Developing a business plan might sound daunting if you’ve never done one, but don’t get overwhelmed. A business plan, Devlin says, is just telling your story: What you want to do, what you presently do, and who’s involved in it.
Devlin suggests a free online program called Ag Plan, at www.agplan.umn.edu, that provides a template that helps develop a plan.
Finally, once you develop your plan, you should use it.
"Don’t just stick it on a shelf and forget about it," Devlin says. "Also remember to go through and revise it. Any time there are circumstances that change in your farming operation it’s good to go back and review it and make sure it accurately reflects where you are."
The Farm Journal Legacy Project Business Plan Self-Assessment Tool can help you review your business plan.
Additional information on business plans is available from MU Extension at extension.missouri.edu/business.