Wednesday, October 31, 2007

A Business Plan?

Do you ever feel like you are out of your league. I'm a high school soccer coach at a school that doesn't place a lot of emphasis on a sport unless it ends with ball (football, basketball, baseball, and softball). We don't have the greatest equipment, but we make do with what we have. I know for a fact that when a team shows up at our place with matching warm-ups, bags, water bottles, shoes, and more my team feels like it is out of its league! Well, whenever I read about or start to think about a business plan I feel like I am out of my league.

But, I feel like a business plan is an important part of any farming venture that I want to be involved in. I want to have an idea of what I'm getting into, what it's going to cost, what I need to return, what I can invest in, and how much I need to sell. So, last night I did a little "googling" to see what I could come up with. Below is a section from an article about the 2004 Practical Farmers of Iowa Conference. If you would like to read the article in its entirety you can click HERE. Below I have copied the section that specifically speaks to farming business plans in general:

How to develop a workable business plan

When you run your own farm, you’re an entrepreneur as much as a producer. That means you need to understand business planning 101, said Penny Brown Huber, program administrator for Iowa’s Growing Your Small Market Farm Business Planning Program.

“Entrepreneurs are innovators,” Huber said. “They have a strong desire to create something new. They also have a vision of how their business will grow and a plan to make it happen.”

She presented these contracts between popular misunderstandings, and what she knows about farmers and entrepreneurs:

Myth: Entrepreneurs are born, not made.
Fact: Almost anyone can learn business skills.

Myth: Entrepreneurs are their own bosses.
Fact: Entrepreneurs work for many people, including investors, bankers, customers, employees, and family.

Myth: Entrepreneurs set their own hours.
Fact: Entrepreneurs work long and hard for their success.

Myth: Entrepreneurs love high-risk ventures.
Fact: Entrepreneurs look for ways to minimize risk.

Huber gave these steps, and comments, for successful business planning:

  1. The business owner assumes the lead in the business planning process. “You can’t expect an Extension agent or someone else to write your business plan for you.”

  2. The business planning process must involve everyone in the family and/or business.

  3. The business plan must reflect reality. “Interview other people already in the business to get their input.”

  4. Develop contingency plans for worst-case scenarios. “If you get sick, a building burns down, a hailstorm destroys your vegetable crop, or your livestock get infected with disease, you have to have a plan.”

  5. Set objectives and goals that are achievable. “Two to three strong, clear goals and objectives will really help you move along,” Huber said. “Your first goal can be, ‘I will write a business plan.’ Your objective can be, ‘I will write my plan by Dec. 1.’”

  6. Include innovative marketing ideas. “Developing recipes that feature the foods you raise can be a great way to promote your business.”

Once your write your business plan, review it often and use it as a guide.


I thought the article brought up some good points for a total business plan beginner like myself to think about. I don't want to make an extra long post here, but I will comeback tomorrow with some of my thoughts on the article. Let me just say the points that really hit home with me were numbers two and three. One of my major reasons for farming is the family aspect ... my family and the families that we will sell to. And, I am all about learning from the experience of others. In fact, that is what a majority of the posts on this blog of mine are about, learning from others. I would appreciate any thoughts on business plans in general or more specifically farm based business plans.

10 comments:

sugarcreekfarm said...

I took that farm business planning class from Penny a couple of years ago. I can't recommend it highly enough! Penny has an amazing mind for business and has so many resources available. She really helped us think through all aspects of our farm business and come up with an actionable plan. And being in a group of small farmers, most of whom are doing something that goes contrary to conventional ag in the state of Iowa, is really encouraging, motivating, and uplifting. The network of graduates from that class continues to be a fantastic resource and support for us.

In fact I had lunch with Penny on Monday - even a few years after the class she continues to be a source of ideas, help and encouragement to us. (And she's a customer now :)

Her husband, Gary Huber, works for PFI and is a wonderful resource for alternative pork production methods.

It was about a 2-hour drive for me to go to Ames for the class, but totally totally worth it! She will be starting a new class, I think in January.

sugarcreekfarm said...

And I would add that our business plan continues to be a working document. We review and revise it about once a year.

Ethan Book said...

Thanks for the comment. I will have to find out more about that class. I didn't realize that it was something that is still available. It sounds like it would be perfect for me!

John said...

fyi...

class presentation

Ethan Book said...

John, thanks for the link to the class presentation. Have you attended the class?

FUN & MASTI said...

thanks buddy..
I was about to start up a home food delivery business...your information will be helpful to me..
thanks a lot.

www.clickindia.com

Steven said...

Sorry, but the last three look like spam to me.

John said...

Ethan,

No I have not. I went searching for more info when I saw your post. I read about it on sugarcreek's blog and was curious. Your blog gave me more to google on. Sounds very good. Unfortunately, I will be in Southern Illinois so too far away. Will check out the U of Ill extension to see if they have something similar. They have been doing 1 day meetings on small farming recently.

I am currently in Texas, awaiting the house to sell. I bought the farm (ha) and can hardly wait to get things started there. Maybe in the springtime...

Really enjoy your blog. Check it daily.

John

Krystle said...

I've gotten loads of insights from this publication by the Minnesota Institute for Sustainable Agriculture:

Building a Sustainable Business
http://www.misa.umn.edu/vd/bizplan.html

Ethan Book said...

Thanks for the link Krystle! I'm going to bookmark that site and start reading through the information. It looks pretty good.

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