Tool 1.3 How to prepare a business plan

• What are the core values of business owners and/or family members (Tool 1.4)?
• Add goals and objectives (from Tool 1.2) here.
• 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 level of profitability?

Identify clients and customers

• Which clients will provide the services, collaboration and/or expertise your business will need?
• What are the requirements and product specifications of your customers?

Identify the key risks

• Current farm performance (benchmarking results for at least the last two-five years)
• What are the risks – production, people, finance, environment, market, etc.?
• What can be done to minimise the risks?
• How will you know if things are going wrong?

Write your plan using available information, practical experience, financial and market research

• Gain input from all stakeholders, such as managers, owners, family members and/or employees.
• Prepare a detailed annual operational plan that consider the scale and objectives of the operation.
• At critical stages in the production cycle, have a back-up plan that may include an exit strategy.
• Add in your SWOT that you prepared earlier (Tool 1.1).
• Outline the procedures, labour requirements, target market specifications and financial involvement to be used.
• Prepare a detailed budget to include possible variation in costs and income (five-year budget is preferred).
• Specify targets/key performance indicators (KPIs) to be achieved. What are the possible barriers to achieving these targets, and what is the plan to overcome them?
• Determine an appropriate record keeping and reporting system to enable ongoing monitoring and financial analysis.
• How will you remain accountable to this plan? Create an action plan and review regularly

Review the plan with an independent advisor

• Seek assistance from a technical or financial advisor or industry representative familiar with the proposed enterprise.

Update periodically to retain relevance

• As changes (e.g., technical, financial, operational, etc.) occur the plan should be reviewed and updated.
• Industry practice is to annually review your business plan.