A business plan provides a glimpse of your agricultural business today and documents your growth plan for the next few years. It demonstrates your business goals and strategies. If you want to start an agricultural start-up or grow your existing company, you need a business plan. A business plan will help you raise funding and help you plan out the growth of your agricultural business to improve your chances of success.
Why You Need a Business Plan
The primary sources of funding for agricultural startups are personal savings, bank loans, and angel investors. When acquiring loans, banks will want to review your business plans to gain confidence, enabling you to repay the loan and interest quickly. To have faith, the bank must ensure your financials are reasonable and see a robust business plan. A business plan will give them the confidence that you can successfully operate and run a business.
What Does a Business Plan Entail?
A well-written business plan can be of enormous value to a company. A business plan should include an overview, industry analysis, and competitor analysis, among other elements. Here are a few aspects that are included in a business plan:
- Executive Summary
An executive summary provides an introduction to a business plan and an overview of each section of your project. The executive summary aims to engage the reader by explaining what kind of agricultural business you are operating. The executive summary also comprises a brief overview of the farming industry, the type of agricultural business you are running, an overview of the target consumers, a snapshot of the marketing strategy, and an overview of the financial plan.
- Company Overview
In the company overview, you will need to detail the type of agricultural business you are operating. In addition to explaining the type of agricultural business, the company overview needs to provide your business background. It will answer questions such as: when you started the business, what milestones you have achieved to date, and your legal structure.
- Industry Analysis
An industry analysis typically comprises an overview of the agricultural industry. Industry analysis helps you understand the position of the company in comparison to your competitors. An industry analysis also enables you to identify the current market dynamics, such as competition intensity, key suppliers, key competitors, industry growth forecast, technology impact, and demand for the product or service.
- Consumer Analysis
The customer analysis section of the agricultural business plan must detail the customers you serve or expect to serve. A customer analysis intends to break down the target customer in terms of their demographic and psychographic profiles. A demographic study analyses the ages, genders, locations, and income levels of the potential customers you plan to serve.
On the other hand, a psychographic profile explains the needs and wants of the target customers.
- Competitive Analysis
A competitor analysis helps you identify your business’s direct and indirect competitors. Direct competitors are other agricultural businesses, while indirect competitors are other options your customers can purchase from, such as farmers, wholesalers, and distributors. For each competitor, you will need to provide an overview of their business that documents their strengths and weaknesses.
- Marketing Plan
A marketing plan typically consists of the four P’s: Product, Price, Place, and Promotion.
In the product section, you will replicate the type of agricultural company that you documented in your company overview and the products/services you are offering.
Document the prices you offer in comparison to your competitors.
Place refers to the site of your agricultural company. Document your company’s location and mention how the site will impact your success.
In the final part of the agricultural marketing plan, you will need to document how you will drive customers to your location. Some promotional methods include advertisements on a local paper and radio stations, website, email marketing, advertising on social media platforms, and search engine optimization on your website for targeted keywords.
To demonstrate your business’s potential to succeed, strong management is vital. Highlight your key staff, emphasizing their skills and experiences and showing how they will help your business grow.
A financial plan should include your 5-year financial statement broken out monthly or quarterly for the first year and then annually. Your financial statements include your income, balance, and cash flow statements.
An income statement is commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to demonstrate if you made a profit or not.
Balance sheets portray your assets and liabilities.
Cash Flow Statement
A cash flow statement helps you determine how much money need to start or grow your business. When creating an income statement, you must include costs like farm supplies, payroll, business insurance, taxes, and start-up expenses.
If you are looking for a robust business plan to help you strategize how to access funding and become investment ready, please get in touch with us at email@example.com.