Business Strategy for Farmers
Anyone can start a farm, but a successful farm requires a well-thought-out strategy like any other business– early in the business-planning process and as the operation evolves. To form a strategy for your South Fraser farm business, you need to know:
- Where you are: What are your strengths, and where might your business do well compared to others? Answering these questions will lead you to your competitive advantage.
- Where you want to be: Looking forward, where would you like to see the business in one year, five years – even 10? Do you envision steadily increasing profits? Becoming a leader in your industry segment? Expanding your customer base? Diversifying into other crops?
- How to get there: Plot a course, and consider what milestones will be necessary along the way. Build in flexibility, and as you move along the path, re-evaluate the feasibility of your goals.
- When you’ve arrived: How will you measure success? Be sure that each of your goals contains a specific target that will allow you to recognize what you’ve achieved, and when.
- Where you have been: Past successes and failures offer valuable insights for the future. Evaluate at regular intervals, asking, “What did I do right?” and “How can I improve going forward?” Then redirect efforts accordingly.
How to Write a Farm Business Plan: First Steps
The first section of your farm business plan should answer the questions above, and consist of:
- A mission statement
- Business objectives
- An action plan
We’ve provided more detail on these elements below. To find a business plan template and other agriculture business planning resources for your Fraser Valley farm, visit Smart Farm BC.
1. Mission Statement
This should capture the core purpose and function of your business; one to three sentences summing up its values, key markets, and direction. In other words: who you are, what you do, whom you serve, and what you stand for. This will help guide all of your activities, but it will be especially helpful when it comes time to identify your target market and develop your marketing plan.
2. Business Objectives
Come up with four to eight high-level priorities for your business (no more, or you risk diverting focus from your mission statement). Together, these should paint a picture of how you want your business to look in the future.
Goals should be specific, realistic, achievable, and measurable. Each objective will have its own set of goals; however, some goals might contribute to more than one objective.
Examples of goals could be:
- Increase profits by $25,000 in 5 years to allow for increasing family salaries.
- Improve cost of production for farm enterprise (to control costs and ID profitable areas).
- Restructure debt to regain greater operating credit line for flexibility with purchases.
4. Action Plan
For each goal, create an action statement that explains how that goal will be accomplished. Your action plan should detail how, where, when, how often, and by whom goals will be achieved.
Just remember: you don’t have to go through the process of setting up a farm enterprise on your own – professionals such as accountants and lawyers can be a great source of help. The BC government offers some great resources on goal setting and business planning for farmers, and small businesses in general. Also talk to other farmers, to help you set realistic goals.