Planning allows the farm to explore new business ideas, decide how
much time and money to invest or risk, predict future outcomes and
identify customers, set prices and develop a marketing strategy.
Developing the farm business on paper first can have a number of
benefits. A business plan allows ideas to be tested on paper first,
identifying potential gaps or mistakes. By seeing everything on paper
first, the plan helps ensure that all partners (e.g. spouses) are on
the same page and have the same expectations. The plan can also help
you communicate your opportunity to investors or creditors. It
demonstrates that you understand the risks, have based your projections
on credible numbers and you have the capacity to follow through.
Business Planning helps you maintain control over the destiny of your farm and avoid expensive mistakes.
As has been demonstrated throughout The Organic Path, the transition
process can impact many different aspects of your business and may
involve you moving to a different crop or customer. The plan can help
identify those changes and indicate how you will manage them.
Why don’t people like to use business plans?
Most farmers would rather be out in the fields than writing or
reviewing their business plan. Other common reasons given by farmers
for not planning include a dislike of paperwork, lack of expertise and
seeing it merely as another cost (using a consultant). Business
planning can also be a “cold bucket of water” exposing potential
immediate and long-term weaknesses, threats and vulnerabilities. A
business plan might end up prompting action and change.