Saturday, 22 October 2011

How to Write a farming business Plan

A farming business plan refers to a written document describing the business goals and the strategies for achieving them, financial background and projected profit and loss statement. It may also contain background information about the farming business and the team working to reach the goals. These working tools can help the farming business owners plan for the future and request for credits.  Below are simple steps to guide youth entrepreneurs in making farming business plans.
1) Introduction: what is the product of your farming business? What human problems will be addressed by the farming business? Who are your customers?

2) Basic information or background information: This includes the name and the address of the business, name of the business owner, workers and their qualification.

3) Describe the product: Give details of raw materials, the production process, quality control checks, packaging and special features of your product.

4) Describe the market: who are your customers? Where are they? How big is the market both in size and value? Is the demand growing or falling? Who are the competitors and what will they do if you start production? What are their strengths and weaknesses? What is the value of the market in a year? What is your market share?

5) Describe the selling plan: How will you distribute and sell your products? What promotion method will you use? What are your competitors doing? What will be the product cost? Why do you think your method will be successful?

6) Describe the premises/equipments needed: where will the farming business be located and why? What sort of building will you use? Does it meet health and hygiene standards? What services and equipments do you need and how much do they cost? (Include storage and distribution).
Premises for food processing should be rat/insect proof, fitted with ceiling, easy to clean and spacious to allow walking with ease. The building should have a supply of clean water in addition to power and fuel supply where needed, waste disposal system, enough space for production processes, storage of raw materials, packaging materials and finished products. In addition the equipment should be the correct size for the intended scale of production and regular maintenance and cleaning schedule should be designed and followed.

7) Describe the finance needed: how much money will you need to start and operate the farming business for one year? How much money do you have and how much loan do you need?
Start-up capital is the total cost involved in buying or renovating a building, buying equipments, registering the farming business, training workers, buying packaging and initial raw materials. Operating cost includes variable and fixed costs which should be calculated in advance using an assumed scale of production from the share of market demand.

8) Describe your future plans: what are your objectives in running the farming business? How will you achieve them? What do you expect to happen over the next three to five years? (Include cash flow forecast)