Proper planning can make farms profitable.
Planning on starting your own farm? Agricultural businesses, such as farming, require consideration of factors that many other businesses do not, including such things as weather trends and crop prices. If planned correctly, farming can be profitable. Many farms operate within their families, and this is important for farms looking to have long-term success because it makes it easier to find a younger generation to continue the farm in the future. But whether operating the farm with family members or outside hires, an important step is planning a successful business model for the farm.
Instructions
1. Examine past successes and disappointments in the farming process. Use these to build a structure for the new farm. Determine your values and goals for the farm and what you want to get out of it as a first-time farmer.
2. Assess potential workers and decide where they will fit into the farm. Fixing equipment, raising live stock, raising crops, bookkeeping, marketing and selling are different aspects of farm work. Conduct interviews to uncover worker goals, strengths and weaknesses and different skill sets. Be sure the workers you choose have goals that are in line with your own goals.
3. Analyze the state of the farm: How much land, labor and how many resources will be required? Look at different aspects of the business, such as who will work on the farm, why it will exist, what will need to be raised and grown, etc. Know what external factors could influence the farm and overcome these to become profitable.
4. Develop a mission statement defining the reason the farm exists and its critical purpose.
5. Create five essential business plans. These plans include: An overall business plan, a retirement plan, a transition plan, an estate plan and an investment plan. Although the plans are separate, they have to be able to work together harmoniously.
6. Develop a business plan that enables the farm to be profitable for a long time. Decide what is beneficial to plant and raise in your area and climate. Research different farms in the area, what they have grown and how they have become profitable. Develop a plan of action for production and operation practices, as well as for marketing and financial practices. Use a SWOT analysis to evaluate each of these sectors, which is an outline of Strengths, Weaknesses, Opportunities and Threats.
7. Develop a retirement plan that addresses how much money will be set aside for retirement and the farm's obligation to retirees.
8. Develop a transition plan to determine how the farm is going to be run in the future and how the farm is going to be passed down through generations.
9. Develop an estate plan to determine how assets of the farm, such as land and crops, are going to be divided in case of a death.
10. Develop an investment plan to ensure that workers are going to make money in the future as well as in the present.
Tags: they have, become profitable, become profitable Develop, business plan, different aspects, estate plan