Business Plan/Concept

Business Plan/Concept

Serving the Farming Industry

A business strategy is a roadmap for establishing or growing a business successfully in the future. It outlines how the company intends to attain its stated objective. Every agricultural company should have a written business plan that can serve as an archive of why decisions were made and a guide for future decisions. It tells a story that is organized, realistic, logical, specific, exhaustive, and dependable. It defines the business, the industry, the company’s prospects, customers, suppliers, and competitors in detail. The company’s strategic plan contains credible assumptions and projections that outline how the company will achieve its objectives and maintain its competitive advantage. It uncovers assumptions whereby the company is most vulnerable and sensitive, possible hazards and risk mitigating actions, as well as funding needs for the business. A comprehensive business plan contains short-term and intermediate objectives, timetables for attaining these objectives, and estimated startup capital and operating expenses. It functions as a strategic plan, a marketing plan, as well as an operations and feasibility plan. A business plan should be endorsed by those who will implement it and should include a description of the people responsible for administering the business and executing the business plan.

It can also be used to negotiate with lending institutions for startup loans and to attract potential investors. A business strategy can be created for the following purposes:
•To assist a loan or financing request.
•To evaluate the viability of an undertaking
•To evaluate the efficacy of business and advertising strategies.
•To entice potential foreign investors.
•For potential future alliances and strategic alliances •For acquiring contracts and off-take agreements
• To be eligible for government funding and assistance.

The business plan is typically required by lending organizations and investors, who might lack the necessary knowledge of agricultural production; therefore, it should be simple to read and comprehend for the intended audience. A ‘bankable’ business plan is frequently required. This means that the company’s business plan must be credible, contain the necessary and correct technical and financial information, address the issues that would attract a potential financier, and be capable of being effectively implemented. It is essential to inquire about the business plan’s ultimate purpose, how it will be utilized, by whom, and the time period it encompasses. This will aid in determining the plan’s scope. The three primary reasons for creating a business plan are elaborated upon in the sections that follow.

To Get Funding

A agriculture enterprise has restricted resources. It is crucial, therefore, that available resources, particularly capital, are utilised prudently and not squandered. Because every farm enterprise requires capital, a business plan is essential when approaching investors and creditors for financing. Investors and creditors want assurance that the farm in which they are investing or lending money presents an acceptable level of risk. Last but not least, the business plan helps determine the viability of the farm business.

To serve an internal purpose

The business strategy serves as a guide for the farm’s mission. This helps by pointing the farm enterprise in the desired direction. The following elements are helpful for internal purposes:

  • Focuses and coordinates the farmer’s efforts towards explicitly defined objectives.
  • Coordination of objectives ensures that everyone understands where the business is headed and what goals they are pursuing.
  • A plan to guide the farm enterprise.
  • A device for performance evaluations
  • A precise analysis of the agriculture enterprise
  • Determines future development and expansion potential.

To reduce risk

The business strategy can assist the farmer in mitigating risk during the initiation or continuation of an enterprise. The process of creating a business plan will require the farmer to thoroughly consider every aspect of his or her farm enterprise. This may prompt the farmer to contemplate alternatives or even a new course of action. The business plan will assist the farmer in focusing his efforts on attaining a specific goal, as well as comparing true and budgeted results to provide feedback on the achievement or failure of the company’s operations and effort.

What are the farm business questions?

Additionally, it is necessary to respond to a few inquiries regarding the farming operation and its surroundings. Examples of possible queries include:

  • Who are the farm’s management, investors, and beneficiaries?
  • What is the business’s background?
  • Who were the previous proprietors, how long has the current owner been in charge, and where is the business located?
  • Have land conflicts been resolved?
  • Is the enterprise or endeavour economically viable?
  • Who are the possible interested parties?
  • What are the short-term, intermediate-term, and long-term capital needs?
  • What equity level is involved?
  • What businesses/ goods does the enterprise encompass?
  • Is this a startup or a well-established business?
  • What are the current and anticipated sales figures?
  • What is its profitability as a continuing concern or business?
  • What are the expenditures of manufacturing?
  • Why are the existing products being manufactured?
  • What is anticipated in the future?
    How is it manufactured?
    Labor-intensive or capital-intensive?
    organic or non-organic?
  • Where is it manufactured?
  • What value is added prior to and following the farm gate?
  • Who are the consumers and markets?
  • Where can produce be purchased?
    On-farm, derivatives, forward contracting to silo owners, millers, feedlots, supermarkets, or the fresh produce market?
  • What natural resources are available? What is the standard? How enduring are they?
  • What current threats does the farm enterprise face?

Customer and competitor questions

Regarding customers and rivals, the following concerns are pertinent, particularly if a niche product is offered and to a lesser extent for generic products:

Questions about customers:

  • Who are the major purchasers?
  • What do they purchase?
  • What do they spend?
  • Why do they purchase?
  • Where shall they shop?
  • How do they make their living?
  • When is payment made?
  • Are there any special packaging and quality requirements?
  • Questions about competitors:
  • Who are they?
  • What are their strategies?
  • Who are their customers?
  • Which of your customers are vulnerable to takeover? Strategies to gain market share: 
  • Cut costs (lower price)
  • New products
  • Offer something unique
  • Focus on individual customer groups.

Business plan format

The structure of an enterprise plan is malleable. Length, detail, and content are determined by variables such as the plan’s purpose, the complexity and scope of the business’ functions, and the markets) or consumers it intends to serve. It is also essential to identify the business’s stakeholders, as they can influence the format of the company plan. These stakeholders may include external as well as internal stakeholders. The internal stakeholders may consist of:

  • Business management
  • Owners/shareholders
  • Employees: Former owner
  • New agricultural enterprise, including the beneficiaries.
    External stakeholders include;
  • Customers are a potential external stakeholder
  • Investors
  • Banks (with regard to capital, security, personality, and conditions).
  • Government
  • Supply chain participants (input suppliers, agents, purchasers, and processors).
    Business plan technical issues must be addressed.
    The business strategy must satisfy the following criteria:
  • Excellent presentation: transcribed and bound
  • Concise
  • Comprehensive
  • Logical
    Simple to read and comprehend
  • Factual
  • Focus on technical matters
  • List the presumptions made
  • Include tables and graphs.

In light of these fundamental requirements, the subsequent sections examine each component of the business plan in depth.

Same frame work for a business plan.

The graph below provides an example of a business plan structure. Depending on the objective, not every section of the outline must be completed. A major investment necessitates a more comprehensive strategy that places greater emphasis on specific aspects, such as finances.
Generally speaking, the financial section should comprise 40% of the business plan. Information directly related to the business plan should be included in the main document, while a more comprehensive financial analysis should be included as an annexe to the business plan.


  • Title
  • Full name of business
  • Physical and postal addresses
  • Telephone, fax numbers, and email address.
  • Date of plan
  • List of headings and page numbers:
  • Graphs, figures and tables
  • References
  • Annexure
  • Highlights of the most important aspects of the plan.
  • Purpose of the business plan.
  • Purpose of the business plan (remember the target reader)
  • Background (for example, business owner, type of business, location of property, size and enterprises on farm)
  • Brief farm history and current situation
  • Assessment of the current situation (finance, antiane and human resources)
  • Industry and market analysis (international and national, size, market share and critical issues)
  • Competitive environment
  • Internal factors influencing the business
  • SWOT (Strengths, Weaknesses, Opportunities and Threats)
  • Industry and market analysis (international and national, size, market share and critical issues
  • Vision, Mission and goals (where do you want to go?)
  • Scan the environment
  • External factors influencing the business (PESTEL; Political, Economic, Socioeconomic, Environmental and Legal analysis) 
  • Ownership and organisational structure
  • Farm map and land use
  • Facilities and logistics
  • Production choices and processes
  • Equipment
  • Technology choices
  • Enterprise budgets
  • Production and operations schedule
  • Value chain analysis
  • Describe the six P’s (Product, Price, Promotion, Place, Processes and People)
  • Competitive advantage(s)
  • Written contracts (with whom and conditions)
  • Pricing strategy
  • Financial statements  (balance sheet, income statement and cash flow projection)
  • Projected financial statements (financial forecast) with above normal, normal and yield scenarios
  • Financial ratios
  • Capital requirements
  • Investment analysis
  • Identify the sources of funding.
  • Repayment analysis and evaluation of alternatives
  • Identification of possible risks (production, financial, marketing, staff, etc)
  • Probability of occuring and impact on enterprise
  • Risk mitigation strategies (formal and informal)
  • Structured risk analysis
  • ‘What-if’ analysis
  • Sensitivity analysis on prices and production (testing assumption)
  • Develop an implementation plan and ‘to-do’ list
  • Responsibiilites and time-lines
  • Establish monitoring and control checkpoints
  • Keep records
  • Review progress
  • Feedback and evaluation dates


  • Financial work sheets
  • Letters of intent from suppliers
  • Insurance documents
  • Customer details
  • Patents and copyrights
  • CVs of most senior staff members
  • Map of the farm
  • Photographs
  • Quotes and tender documents
  • Reports from consultants or technical experts
  • Support material




Executive summary

Description of the farming business

Strategic Plan

Operational and production plan

Marketing Plan

Organisation and staffing plan

Risk planning

Implementation and monitoring

List of references


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