How to Develop a Farm Business Plan

A successful farm business plan outlines a strategy for an independent farmer to embark on the tricky enterprise of earning a living in a field that has become dominated by large -scale companies with deep pockets. Farming is one of the oldest human professions, with a powerful draw for hard-working people who care about the most basic things in life, such as soil and food. Despite the prevalence of industrialized agriculture today, there is still room for earnest, dedicated, small-scale farmers to succeed, especially with the recent proliferation of direct sales venues such as farmers' markets and community supported agriculture programs.

Instructions

1. Step 1

   Develop an executive summary, including basic information about the farm and about your experience and vision as a farmer. Describe the land, including its previous agricultural history, the type of soil it has and what will grow best there, and your assessment of the general health of the soil. Mention whether you have worked on other farms, completed an agricultural internship, studied agricultural techniques or grown up on a farm. Outline your vision and goals for your farm, including what agricultural products you intend to grow, your approach to farming (such as organic or biodynamic methods), and whether you intend to process some of your produce yourself into value-added products.

2. Step 2

   Assess the economic environment in which your farm will operate. Consider the available sales venues such as selling to wholesalers, retailers or through direct sales venues. Evaluate the economic vitality of the surrounding area and the available produce options that might be competing with your products. Consider the price range you will charge for your products, and present a general idea of how much you will have to sell in order to make your operation economically viable.

3. Step 3

   Assemble financial information for your farm business plan. Prepare a balance sheet showing your assets, liabilities and net worth. Explain whether you already own your land or whether you will be renting or leasing it. Develop cash flow projections detailing the amount you expect your farm to bring in during the next two years, as well as the expenses it will incur. Explain where you will find the capital you need to operate your farm until your farm breaks even.