NPR – An Innovative Approach To Developing An Agricultural Business Plan (p112-117)
The use of business planning in U.S. agriculture has grown rapidly in the past decade. A decade or two ago, the concept of developing a business plan for farmers or ranchers was rarely discussed by either producers or farm management educators. Today when educators, lenders or producers discuss farm management issues, the need for a business plan is usually one of the foremost topics mentioned.
This paper discusses the reasons a producer should develop a business plan in order to document financial viability and demonstrate a thorough understanding of all aspects of managing the business. A business plan is a communication tool both externally with lenders and investors and internally with family members and employees.
Agricultural producers seeking to develop a business plan face a number of challenges. One of the primary challenges is the time required to write a business plan and the challenge of completing the task. Educators struggle with the same issue but from the perspective of how to provide adequate assistance to producers developing a plan. There have also been limited business planning tools available that are relevant to agriculture.
The development of AgPlan, an online agricultural business planning website has addressed a number of the business plan development challenges. AgPlan allows producers to select from four distinct business plan types, including traditional commodity agriculture, value-added agriculture, small business, and commercial fishing. For each type of business, AgPlan provides a business plan outline, tips or suggestions for each section of the plan, resource links to articles on specific topics, and sample plans. The most innovative feature of AgPlan is a producer’s ability to give reviewers or advisors access to their plan and to interact with trusted reviewers as the plan is developed. AgPlan, www.AgPlan.umn.edu, is free for anyone to use and is online, so it is available and being used by producers throughout the world.
Keywords: Farm Business Planning
Organizations(s): University of Minnesota