Before embarking on any new enterprise or undertaking major changes to the farm business, prepare a detailed business plan. This is a formal plan that brings together the physical, financial and human resources needed for the operation, and examines the costs, risks and possible rewards from the enterprise.
How to prepare a business plan
| Identify what you want to achieve |
- What is the purpose of the enterprise?
- What is the scale of the operation?
- What resources do you have or require?
- What are the critical factors for achieving the desired product and level of profitability?
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| Identify clients and customers |
- Which clients will provide the services, collaboration and expertise your business will need?
- What are the requirements and product specifications of your customers?
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| Identify the key financial and production risks |
- How will you first know if things are going wrong?
- What can be done to minimise the risks?
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| Write your plan using available information, practical experience, financial and market research |
- Prepare a detailed operational plan to account for the scale of the operation.
- Outline the procedures, labour requirements, target market specifications and financial involvement to be used.
- Prepare a detailed budget to include the likely variables in costs and returns.
- Specify targets to be achieved.
- At critical stages in the production cycle, have a back-up plan to include possible exit strategies.
- Determine an appropriate recording system to enable on-going monitoring and financial analysis.
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| Review the plan with an independent person |
- Seek assistance from a technical and financial adviser or industry representative familiar with the proposed enterprise.
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| Update periodically to retain relevance |
- As technical, financial or operational changes occur the plan should be reviewed and updated.
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