What is a business plan?
What is a business plan?
A business plan is a formal document which will help you explain where you want your business to go over the next few years and how you will get there.
Producing a business plan will give you the opportunity to think in depth about the challenges your business may face and how you might overcome them – making you more prepared if these issues do arise. It also gives you written targets to aim for, review and monitor so that if things start to go off-course you can correct them.
How you put together each part of the plan is considered in more detail below.
Executive summary – the most important points of your business plan. This section is usually written last, and you can create different versions, tailored to the audience.
- Introduction and company overview – Your business name, contact details, legal status. Details of your bankers, solicitors, accountants and insurers. Your mission and vision, a brief description of your products (and services), and what benefits or USPs they may have over competitors.
Market analysis – A description of your target customers’ requirements and how you are going to meet them. Analysis of your strengths, weaknesses, opportunities and threats (SWOT) and other factors which may affect your business (PESTLE).
Sales strategy – A full description of your products, production timelines and sales forecast. An explanation of how you will control the quality of your product, meet customer requirements and measure performance.
Operations – Your premises, how you will produce and store products. The inputs that are required and who your suppliers are. The people involved in your business, and future training/recruitment requirements. H&S procedures, compliance, farm assurance and any environmental/land management aspects. Future plans for scaling up.
Financial information – Forecasted cash flow for year one, projected profit and loss for years one to three, balance sheet changes and any funding requirements.
- Appendices – Consider including: any letters from current or future customers; farm plans; any health and safety, HR or environmental policies or procedures you have; CVs and job/person descriptions; legal documents such as property deeds; other financial details.
Why have a business plan?
A business plan is an essential tool if you are seeking to develop your farming system through expansion, major investments or a different enterprise mix. It will be helpful if you want to forecast what the future holds for your current business even if you are not proposing major changes. Examples of where you will require a plan include:
- Applying for a new farm business tenancy
- Seeking a bank loan or mortgage to purchase additional land or premises
- Altering the current farming system or making investments that will result in a request for additional overdraft facilities
- Entering into share farming arrangement
Guide to writing a business plan
Before you write a business plan, it would be useful for you to assess your business, its finances and what you want to achieve personally in your future. If you haven’t already visited these webpages, the links below will help you to work through this.