Failing to plan and planning to fail, as Benjamin Fraklin once put it, are frequently the same thing. Farmers are often looking to grow, expand, or enhance their businesses, especially in times of economic uncertainty, when diversification may help generate additional revenue. Having a strong plan for their business and any upcoming changes to the business is critical to their success. As a lender, you can help your customers initiate, execute, and complete a business plan, and the Center for Farm Financial Management (CFFM) has the tools to help.
Why have a business plan?
A business plan is a formal statement of a business’s goals, the reason why they believe those goals are attainable, and the action items needed to reach those goals. A business plan is beneficial for all businesses, but especially for new businesses, or those looking to expand or make major changes. Business planning helps business owners think through the details required to make the business endeavor successful. It can serve as an operational guide, communicating the business goals and objectives both externally to lenders and other stakeholders, and internally to business partners, family members, and employees.
How to create a business plan
CFFM has an entire suite of educational resources to assist farmers in improving their business management and marketing abilities including FINPACK of course. Another useful tool is AgPlan, a free online business planning software, developed in 2008 and since used to initiate over 100,000 business plans.
This online software was developed specifically for agricultural businesses. Since farming is not a “one size fits all” industry, AgPlan provides users with multiple templates to choose from to assist in the business plan writing process. Options include templates for commodity production, value-add, agritourism, and an emergency preparedness plan. Each template provides tips, resources, and samples to spur ideas and inspire users as they write their business plan.
Assisting your customers as they create a business plan
Starting a business plan can often be overwhelming, and for businesses who start to write a plan, they may find some sections more challenging to write than others. Customers may look to you for advice or guidance as they write. For this purpose, AgPlan provides users with the ability to share their business plan with a reviewer. They can determine if reviewers have access to edit the plan or strictly access to view the plan. Reviewers are allowed to leave comments throughout the plan, helping guide business owners in thinking through aspects of the business plan that they may have left out. Serving as a reviewer of your customer’s business plan is a positive way you can assist your customer in creating a strong plan, and further add value to your relationship with them.
Other resources for business planning
As a lender, you likely have great insight into certain aspects of business planning, such as financial projections or operational management, while other sections such as marketing or personnel management may not be your expertise. There are many other possible advisors, however, that you can encourage your customers to look to for help. Extension educators and farm business management instructors can be great business planning resources.
Connect with FINPACK
If you have any questions about any aspect of FINPACK, please don’t hesitate to contact us, and don’t forget to follow FINPACK on Facebook, X, and Instagram, or connect with us on LinkedIn, and be sure to subscribe to FINPACK News email updates.
Katie grew up on a crop farm in western Minnesota, and is still actively involved on the farm. Her agriculture background provides her valuable experience and knowledge in her work with FINPACK. Katie has a Bachelor’s Degree in Agriculture and Food Business Management and a Master’s Degree in Applied Economics, both from the University of Minnesota.