In the last post we took some time to discuss our personal values, market research and the resources needed to maintain operations. Understanding the market environment and what operational needs you might have will help you to build a robust, well-thought business plan. Keep your values and market research in mind as you develop the other sections of your business plan. The "Building a Sustainable Business" book has all of the worksheets and examples to help you work through the various sections of your business plan, and if you would like to know how to organize those ideas, download this basic business plan template.
One of the first sections of your business plan will be the Company Description. A business plan will often include a description of your farm's history, setting a benchmark for where you've been and where you plan to go next. Even if you have no farm history, a personal history could be used, sharing why you want to start your farm business. A farm history can be useful in demonstrating your values and mission and how they fit into your business model. Also included in the company description should be the company's legal structure - are you a sole proprietor, LLC, Corporation? If you aren't sure how to organize your business, here are a couple of websites that explain the difference between the various legal entities and how they might work on your farm. Farm Incorporation: beginningfarmers.org, Legal Organization Structure: AgMRC.org
Have you ever heard of a SWOT analysis? When developing your business plan you should take a little time to do SWOT analysis, which forces you to think about your business in a whole new way. The point of a SWOT analysis is to help you develop a strong business strategy by making sure you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace. As you might have guessed from that last sentence, S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are things that you can change in your business (think location, employees, and marketing), while opportunities and threats are things outside of your business that you can’t change (think competitors or changes in customer buying habits). To get the most out of your SWOT analysis, work on it as a team project with different people from different parts of your business, family and potential customers. The more varied insights you have, the better your results will be. (The worksheet in our business planning book is on page 65.) Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactively. In fact, I recommend conducting a strategy review meeting at least once a year that begins with a SWOT analysis. New businesses should use a SWOT analysis as a part of their planning process. There is no “one size fits all” plan for your business, and thinking about your new business in terms of its unique “SWOTs” will put you on the right track right away, and save you from a lot of headaches later on.