How to Write a Farm Business Plan
Any kind of business will not operate well and succeed as well if it is not guided by a business plan. This is because of the fact that everything will depend upon how you plan to operate and perform business transactions.
In this article, you will learn the most effective tips in writing the farm business plan.
In farming, what you need to have aside from your knowledge and farming skills are careful preparation, commitment and determination. Although there are many risks that may thwart your operation, you don’t have anything to worry about as long as the business plan is there’re to guide you. Aside from that, a business plan can also help you in battling financial problems of shortages because it can be used in lending money from lending institutions.
Tips in Writing a Farm Business Plan
The first thing you need to do is assemble all licenses, permits, water rights and land usage history. You also need to list all the farm assets which include the farm property’s legal description and the acreage. You also need to include valuation and description of all the outbuildings such as living quarters, garages, granaries, silos, storage buildings and barns. The rented and owned equipments must also be listed. In addition, a projection of expected equipment or land requirements must also be prepared. You also need to provide a clear and concise explanation of how the equipments and the land will be used.
The organizational structure of the farm must also be determined. This is also one of the most integral factors that must be incorporated in the business plan. Since there are lots of tasks that must be done, an evaluation must also be done with regard to the needed amount of farm workers.
In order for you to know the right kind of business structure that you will use, consulting a tax adviser or lawyer is the best thing you can do. Three of the business structures are the following: partnership, corporation and sole proprietorship. In order for you to get a good lawyer, you can either contact the National Bar Association or the state bar association. The American Institute of Certified Public Accountants will also be a great help in locating a CPA or tax adviser.
Next, you have to prepare a well-written mission statement for operating your farm which lays out both the short-term and long-term goals as well. In addition, you also need to give complete details of the following: supplies, land, labor, equipments, building requirements, livestock, seed costs and other expenses as well. The crop delivery, sales, marketing, professional services, freight, utilities, fuel taxes, sales taxes, property taxes, income tax and insurance must also be included.
You also need to have loads of knowledge. In order for you to know the possible factors and variables that have the tendency in affecting your business operation, you have to carefully study weather patterns, yearly crop production and market trends. You also need to come up with a very effective backup plan in order for you to deal with market declines, debt service, drought and crop failures.
An organic certification must also be evaluated. In order for you to make sure that you will be certified in organic food production, you have to contact Food Alliance at their website foodalliance.org.
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