WHAT IS IT? A 20 to 30 page document that can help producers develop their business, research strategies and objectives over three to five years and measure and review performance for their own benefit and for third party discussions.
HOW DO YOU PREPARE? Use information from company records, customer or supplier surveys, discussions with competitors, industry associations or publications, government agencies and the internet.
WHAT DO YOU INCLUDE? This is a rough outline of items for a business plan (usual page length in brackets):
1. Executive summary (1-2): Introduces the plan and its author. Includes contact information. Summarizes key point.
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2. Mission statement and objectives (1): Describes the purpose and activities of the business. Outlines goals for next three to five years.
3. Company history (2): Summarizes achievements and growth. Shows key ratio summary of financial performance over last five fiscal years. Lists significant changes to business, company strengths and weaknesses.
4. Ownership and management (2-3): Shows ownership structure, with summaries of each owner’s personal successes in the past decade. Shows succession plans, management structure, roles and responsibilities and brief summaries of skills and qualifications of management team.
5. Products & services (1-2): Describes products and services provided and their value to customers.
6. Industry analysis (1-2): Outlines industry, overall industry size, maturity and growth patterns.
7. Target market profile (2-3): Describes size, trends and customers in target market. Key attributes that affect buying decisions. Potential product or service substitutes.
8. Competition (1-2): Identifies primaryand secondary competitors and their strengths and weaknesses in target market.
9. Marketing strategy and sales plan (2-3): Outlines marketing plan and distribution channels. Demonstrates how producer will obtain and keep customers. Shows pricing strategy, sales incentives and promotions.
10. Research, development and technology (1): Shows research and development efforts. Lists patents or intellectual property held by the company. Explains how producer plans to improve or develop products.
11. Operational & manufacturing plans (2-3): Shows physical and processing capacity. Outlines processing cycle with timelines. Identifies sources for raw materials and provisions for continued availability. Lists labour requirements from processing to marketing. Shows plans to improve processes.
12. Human resource plan (1-2): Describes human resource issues within company. Summarizes strategies to attract, retain, compensate and train staff.
13. Sources and use of funds (1): Lists timing and cost of planned capital expenditures. Lists sources of funding: working capital, equity capital, operating loans and long-term debt capital.
14. Financial position and projections (2-3): Lists key assumptions for quantities sold, price, costs of goods, operating expenses, salaries, depreciation, term interest costs, income taxes, principal debt service requirements, dividends and repayment of shareholder loans. For an existing business, include financial statements from the past five years and pro forma financial statements for the next two to three years.
For a start-up, include opening and pro forma financial statements for the first three years of operation. Include a monthly cash flow forecast covering at least 12 months for an existing business and at least 24 months for a startup. Outline the impact of significant changes to the key variables.
15. Appendix: Attach, if applicable, a copy of the purchase agreement, development plans, cost quotations and estimates or fixed price contracts, permits and licences, research supporting historic industry norms for price and cost levels and copies of distribution agreements, sale and supply contracts.
Source: Farm Credit Corporation
