The Farm Business Plan is arguable the most important document of a farm. It can help clarify thinking, identify the key factors the business should focus on and provides knowledge and confidence to all stakeholders (eg Financiers, Shareholders). It should:
- Document the goals of the owners
- Outline the objectives and key targets that will drive the business forward.
- Identify the current systems and production and resources
- Analysis of the strengths/weaknesses, opportunities and threats to the business
- Set out action plans for achieving the targets
- Identify the key areas to monitor
- Identify key risk to the business and how they may be reduced or managed.
- Set Business Rules (eg application of cash surpluses to grow business, repay debt, off farm investment).
Other areas that may be included in a business plan are:
- Resource information
- Environmental plans
- Development Plan
- Budgets (multiyear projections)
- Document seasonal management plans (to ensure good business continuity especially corporate farms, or where a Farm Manager is employed)
- Succession plan may also be appropriate, if necessary.
Most of time the business plan might be prepared considering if the business is really viable and relevant. It´s important to understand that the business plan is a living document, regularly updated and modified. Goals and also technologies change over time, due to the business development, which demandas technology changes, search for fresh opportunities and threats assessement.