Invest time in a business plan

August 2024

Yolandi Kruger,   agricultural advisor at Dunamus

Part 2

A business plan is essential for securing funding or an investment. It should be clear and understandable for people who may not know much about farming. 

Writing a business plan for your farm involves several steps to ensure it meets the requirements of those who will review it, such as financial institutions or investors.

Those stakeholders often have specific needs and may focus on different aspects of your farm, so it’s crucial to ask them what they want before you start writing. This helps to avoid wasted effort on a plan that doesn’t meet their criteria.

A ‘bankable’ business plan is credible, contains the correct technical and financial information, addresses key concerns of financiers and shows that the farm can be run successfully.

When formulating your business plan, consider its ultimate objective, who will use it and the period it covers. This helps to define its scope.

FRAMEWORK
Here is a simplified framework for a farm business plan:

1. Cover page: Includes the title, business name, contact details and date.
2. Table of contents: Lists sections, graphs, figures and annexures.
3. Executive summary: Highlights key points and the purpose of the plan.
4. Business description: Covers the purpose, background, history and current situation of the farm.
5. Strategic plan: Outlines the vision, mission, goals, market analysis and a SWOT analysis.
6. Operational and production plan: Details ownership, farm layout, production processes, equipment and schedules.
7. Marketing plan: Describes product, pricing, promotion, placement, processes, people, competitive advantages, contracts and market risks.
8. Organisation and staffing plan: Lists the management team, staffing needs, job descriptions and CVs of senior management.
9. Financial plan: Provides financial statements, projected financials and enterprise budgets.
10. Risk planning: Identifies risks, their impact and includes a sensitivity analysis.
11. Implementation and monitoring: Develops an action plan and timeline.
12. References: Lists sources used.
13. Annexures: Includes supporting documents such as IDs, registration papers, analyses, agreements and detailed financials.

Your business plan represents you to potential financiers, who often make funding decisions based solely on the information in the plan. Thus, investing time and effort in creating a thorough, professional plan is vital. If you can’t do it yourself, hire someone to help. 

The next article will cover how to present your business plan to potential financiers or stakeholders.

Publication: August 2024

Section: Pula/Imvula