How to create a farm business plan.
Even though the term ‘farm business plan’ might evoke a sense of formal rigidity, it’s important to remember that this document is, in fact, a living, evolving entity. Just like a seedling that sprouts, grows, and changes with the seasons, your business plan is not meant to be static.
The most effective business plans are those that exhibit flexibility and resilience, characteristics that are at the heart of any successful farm business. Agriculture, by its very nature, is a domain subject to the whims of Mother Nature. From unpredictable weather patterns to seasonal variations, farmers of all kinds grapple with an array of external factors.
Do bear in mind that while these sections are integral, they are by no means exhaustive. Your farm business plan may necessitate additional topics based on your specific farming operations.
Goals and objectives.
A well-crafted business plan should encapsulate both personal and economic goals and objectives. Many successful farm business plans also address environmental stewardship and community outreach. You may want to include goals around preserving farm resources for future generations, ensuring that both the operational and stewardship aspects remain within the family.
Mission statement and values of your farming business plan, industry history, company background and history, competitor analysis.
Understanding your competition is crucial. In the agricultural sector, farmers often share resources, such as a high-tech corn planter, or cooperate in marketing endeavors. Factor in such synergies when analyzing competitors.
Products and services, organization, human resources, and management plans, swot analysis.
Your vision is the roadmap for your farm’s future. It should express not just your financial aspirations but also your plans for the farm operation in the long run.
Financial plan, marketing strategy, establishing a farming business entity, detailed description of farm operations, risk management strategies.
Address potential risks and challenges your farm might face, such as natural disasters, market fluctuations, or pest infestations. Discuss the strategies you plan to implement to mitigate these risks, like insurance coverage, diversification, and emergency response plans.
Community involvement and social responsibility, supply chain and vendor relationships, technology and innovation, training and development plans.
Explain how you intend to train and develop your staff. Include plans for ongoing education, skill development, and potentially, leadership training for future farm managers.
Exit strategy, frequently asked questions.
Provide an addendum for additional documents that support your business plan. This can include resumes of key team members, detailed financial projections, market research data, or letters of support from future customers or partners.
So, where to begin? Let’s dive into our fundamental guide to crafting a farm business plan using our adaptable template. This resource has been designed to help you capture every aspect of your agricultural venture, laying a strong foundation for a bountiful future.
How do you start a farm business plan, how much do farm owners make a year, how much does it cost to start a small farm, what is the most profitable farming business.
Poultry farming is currently the most profitable – and common – farm business in the world. It includes chicken, turkey, quail, ducks and goose, that are being raised for meat or eggs.
americanfarmfi
May 22, 2023
Starting and running a successful farming business requires careful planning and strategic decision-making. One essential tool that every farmer should have is a well-crafted farming business plan. A comprehensive business plan serves as a roadmap for your agricultural venture, guiding you through the various stages of development and ensuring that you stay focused on your goals. We will provide you with a step-by-step guide on how to write an effective farming business plan and start you off with a template.
Before diving into the specifics, let’s take a moment to understand what a farming & agriculture business plan entails. Essentially, a farm business plan is a written document that outlines your farming objectives, strategies, and financial forecasts. It serves as a blueprint for your farm’s operations, helping you make informed decisions and communicate your vision to potential investors, lenders, or partners.
The farming business plan is going to define and communicate your farm’s mission and goals. It helps provide a clear direction for your operations, resources, and ensures that everyone involved in the business is on the same page. Additionally, a well-crafted business plan is often required when seeking financing or partnerships. Lenders and investors use it to evaluate the viability and profitability of your farming venture.
Let’s explore the elements that make up the Farming Business Plan.
The executive summary is a brief overview of your entire plan. It should summarize your farm’s mission, goals, target market, and competitive advantage. While it appears at the beginning of your plan, it is often written last to ensure that it accurately reflects the content of the document.
A thorough market analysis is crucial for understanding your target market, identifying potential customers, and evaluating your competition. This section should provide detailed information about market trends, customer demographics, and demand for your products or services. Conducting market research and gathering data from reliable sources will strengthen the credibility of your analysis.
In this section, describe the specific products or services your new farm will offer. Provide details about their features, benefits, and how they meet the needs of your target market. Discuss any unique selling points or competitive advantages that set your offerings apart from others in the industry.
Outline the strategies for promoting and selling farm products. Explain how you plan to promote your farm and reach your target market. Include information about your pricing strategy, distribution channels, and any partnerships or collaborations that may enhance your marketing efforts. Developing a comprehensive marketing plan will help you attract customers and generate sales.
Describe the operational processes and workflows involved in running the farm, including land preparation, planting, harvesting, livestock care, and post-harvest handling. Highlight the management structure, key personnel, and their roles and responsibilities.
The financial plans are a critical component of your farming business plan as it demonstrates the financial viability and sustainability of your farm. It should include projected income statements, cash flow statements, and balance sheets for the next three to five years. Additionally, outline your funding requirements and any existing or potential sources of financing.
American Farm Financing offers many financing options to fit your needs: operating loans, cash rent loans, farm mortgages, refinances, and equipment loans. See all AFF loan options .
Forecasting expenses is critical when starting a farming operation. List out the main buckets of expenses (inputs, machinery, labor, land, interest, and consulting services). Where possible, get pricing quotes to formalize your expenses as much as possible for what you would like to grow.
After you’ve forecasted expenses, you can set a goal for how much profit, or margin, you intend to make. Use futures sales prices to project what you can sell your crop for. The difference between your sales price and your expenses will become your profit. Ensure that this income matches your expectations and can cover any personal expenses you hope the money will be used for.
While a one-year operating plan is critical to get started, remember that farming is a long-term pursuit. Depending on how many upfront expenses you need to make, it may take multiple farming seasons to turn a significant profit.
Before you can develop a solid business plan for a farm, it is essential to conduct detailed market research. Conduct an analysis of the target market, including its size, growth potential, and trends. Identify the target customers, their needs, preferences, and buying behavior. This assessment will allow you to be an expert on the market and differentiate you from the rest of the competition.
Now that we have covered the key elements of a farming business plan, let’s dive into the process of writing one.
This timeline can be as specific to your needs as possible. You want to make sure that every necessary box is checked before launching your farming operation. This is a suggested timeline for implementing your plan, but coordinate as you see fit and adapt to things that may pop up:
Preparation: 1-6 Months
Operations: 6-12 Months
Below is a helpful template from fsa.usda.gov to get you started. Download your farming business plan template here.
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A broad-based operating plan helps your family stay on course.
It's no insurance against setbacks, but having a whole-farm plan in place can help your family stay on course when difficulties unfold.
"It's often tough to communicate as a family because you tend to focus so much on the day-to-day business operations of producing a commodity," says David Marrison, Ohio State University agriculture-natural resources Extension educator.
"Having a whole-farm business plan in place helps you stay true to your vision and the mission of the operation," he says. "It helps you stay on course and not get lost in the weeds of not having a plan, especially when you're facing big stressors like crop failures or tractor engines going down."
A whole-farm plan encompasses the breadth and width of your farm family's business. "You might say it gives a perspective of the operation from a distance of 30,000 feet, as opposed to a view from 10 feet away," says Marrison.
A whole-farm plan addresses a broad spectrum of components, such as family values and goals, a business analysis and business goals, a business plan, retirement plan, transition plan, estate plan, and investment plan.
"The parts of the whole-farm plan are like spokes in a wheel. All need to work together in harmony for the long-term success of the operation, and all play a role in keeping it operating into the future," he says.
The writing of a broad-based plan begins, of course, with the holding of family business meetings. Before the actual writing of the plan begins, the topics of the meetings might facilitate a process of taking stock of the family, individual assets and goals, and resources and goals of the business.
Marrison suggests taking the following 11 steps to write a whole-farm plan.
Look at the history of your family and its farm, and identify family values and family goals.
"It is valuable for the business to begin the planning process by reflecting on family and farm history," he says. "Valuable lessons can be learned by all the generations involved by examining past successes and disappointments. The underlying values and goals of the family unit should also be determined. While these values and goals often remain unspoken, they have a large impact on how family members treat each other and employees, and how they make business decisions."
"Each member of the farm business should conduct a self-assessment of his or her communication, financial, production, marketing, and management skills," says Marrison. "This is particularly important when bringing generations back to the farm."
This process helps your family determine the areas of responsibility to be allocated to each person. A lack of skill or experience in certain areas could suggest outsourcing some jobs. Or, it could suggest a need for additional education or training.
"You should always be looking at ways to help family members and employees improve their skills and strengths," says Marrison.
A business analysis takes stock of available land, labor, capital, management resources, profitability, business structure, operating procedures, and employee management.
"After taking a snapshot of where the farm business is currently, the family business team should develop key goals for the future," says Marrison. "It is important that each individual share his or her individual goals and skill-set assessments with the other members of the business during this process. Members can then work together to determine the responsibilities of each team member and to develop goals."
"A mission statement is a short statement describing the fundamental reason for the business to exist," he says. "It identifies the underlying values that are going to push your family and the business forward."
The previous steps comprise an internal analysis that can be used to develop plans encompassing the diverse areas of your farm's operation.
"A business plan helps your family develop a plan of action for production and operation practices," says Marrison. "It also helps develop plans for the financial, marketing, personnel, and risk-management sectors of the business."
This analysis could also examine the strengths, weaknesses, opportunities, and threats in each of these areas.
This plan identifies retirees' needs and the role the farm plays in meeting these. "Retirement plans should be established early for all members of the business," says Marrison. "The profitability of your farm should be such that a family member can retire and not adversely affect the financial position of the business."
This describes how your farm will be transferred to the next generation. It encompasses both the transfer of assets and the transfer of managerial control. It describes how the retiring generation will transfer their knowledge to the younger generation, and how and when managerial responsibilities will be transferred.
"Farm estate planning determines how your farm's assets will be distributed upon the death of the principal operators," he says.
Investments vary widely by family and farm, typically comprising land, machinery, and livestock. Others have off-farm investments also. Determine how these investments affect future needs.
"Setting goals establishes a plan of action for each area of business activity," says Marrison. "Set measurable goals that are short, mid, and long term. At monthly family meetings, you can look back at the goals you set in each major area of planning. Reviewing goals keeps them in focus, even though you might not be able to act on them until a future date."
In each planning area, work into the plan a what-if scenario. "Look at what unexpected things could happen," he says. "Having conversations about those what-if circumstances no one wants to think about could help you stay on target and not get stressed when bad things happen."
In sum, says Marrison, "By implementing a whole-farm approach to business planning, your farm family can be ready to face the future with confidence."
David Marrison | 440/576-9008 [email protected]
by FCSC | May 28, 2024 | FCSC Blog , Industry Insights
Embarking on an agricultural venture, whether it’s running a beef ranch out East or managing a large produce business, is both thrilling and daunting at the same time. Creating an effective, sustainable, and profitable business plan from which to run your entire company appears overwhelming at first glance. However, our Farm Credit of Southern Colorado team is here to help you create a solid business plan or recreate one you already have in place to improve upon. We fully understand the myriad considerations of starting or enhancing your agricultural enterprise. From navigating legal structures to defining your goals and objectives, establishing governance strategies, and making crucial decisions, we’ve got you covered every step of the way.
Let us make the development of this critical document easier for you! We’ve put together a guide that walks you through all the intricacies of organizing a new plan and ensures your journey toward viability is smooth sailing.
A well-crafted business plan is one of the most important foundational pieces of planning for success in the agricultural realm. Whether you’re drafting your very first business plan or revamping an existing one, it’s essential to cover all your bases to be well-prepared for all situations. Here are some key points to consider covering within your plan:
1. Operational Plan: Map out your vision, your mission, and the strategies you will use to achieve your goals. A clear roadmap will guide your actions and keep you focused on your goals.
3. Set Goals and Budgets: Creating a business growth strategy can be more manageable when you start from where you would like your business. Goals give you focus, create budgets, and help you understand if your plan is reasonable. They can also validate whether you’re on the right growth path.
4. Licenses and Certifications: While every farming operation’s certification and license will differ depending on the type of product they produce, it’s crucial to complete your research and ensure you are fully certified and licensed where you need to be. Ensure there is a yearly check-in for reestablishments of all documentation as well.
5. Company History: Record all the pivotal moments in your business from its origins to the present day to organize milestones, accomplishments, and the work of influential figures into a cohesive narrative. It is helpful to record your farm’s progress and story.
6. Inventory: Markup a consistent monthly or quarterly game plan to check in and count your farming inventory. Make sure to include physical count, spot checking, cycle counting, and new product ordering, amongst any other item nuances you may have in your operation.
7. Establish Sales and Distribution Channels: Identify the most suitable sales and distribution channels for your agricultural products to calculate your potential net profit. Explore options such as direct business-to-consumer, partnerships and networks with distributors, and growth paths to get into larger markets and supply chains.
8. Financing Opportunities: Find ways to obtain financing, grants, or loans to further your growth and expansion. Identify potential sources of income and create a comprehensive budget to support your business goals, including forward acquisitions and other growth options.
9. Emergency Protocols: A guide that includes roles, responsibilities, relevant contact information, and resources available in the case of emergency. This plan should consist of assessing damage, protecting property, minimizing damage or business disruptions, and determining the appropriate actions after the incident.
10. File Records: Keep proper records of finances, transactions, inventories, and other vital information to track progress and make informed decisions. Accurate recordkeeping is critical for compliance, financial analysis, and strategic planning.
11. Risk Management: Identify potential risks and develop strategies to mitigate them, protecting your business from unexpected challenges. Engaging and managing risks will help protect your assets and business continuity.
13. Mental Health: Prioritize self-care and well-being to ensure resilience and sustainability. Farm work can be demanding, and maintaining mental and emotional well-being is essential to long-term success.
14. Field Transition Plan: Define follow-up procedures and plans to ensure a smooth transition of ownership and operations. Succession planning is essential to preserve the legacy of your business and ensure its continuity across generations.
15. Environmental Stewardship: Create a map to implement sustainable farming practices, conserve natural resources, and promote biodiversity. A solid hold on your business’ sustainable operations is crucial to appeal to the current customer market in this greener age.
16. Environmental Preparedness: Due to weather and environmental factors like droughts, freezing temperatures, hail, pests, and diseases, you must be prepared to plan and react to each. Adapting to climate change and reducing environmental risks requires careful planning and adaptation that fits your personal business needs.
17. Knowledge Expansion: Ensure you have a game plan encouraging you and your employees to expand their knowledge bases and improve their expertise constantly. Focusing on further education is the steppingstone to sustainability and diversification within your organization.
18. Growth Strategy: Conduct a detailed outline that lists your actions to expand operations, increase revenue, and boost market reach. You’ll want to evaluate the financial, market, and industry positions to establish clear objectives to help your business develop over time.
19. Labor and Workload: Farming can be physically demanding and labor intensive, requiring long hours, especially during critical periods such as planting or harvesting. Managing and coordinating workers’ energy can be difficult, especially in large operations.
20. Marketing: Create a comprehensive marketing strategy to promote your product or service, reach your target audience, and generate sales. Effective marketing strategies will help you build brand awareness, attract customers, and generate revenue. Utilize social media platforms to target your audience directly.
With Farm Credit of Southern Colorado by your side, you’ll be equipped with the knowledge, resources, and support you need to thrive in the competitive agricultural landscape. Our team is here to help not only with the ag financial and ag insurance side of things but also with your farm’s business planning and operational logistics. We take pride in also being an educational resource for our customer-owners, so never hesitate to ask for assistance ! Let’s embark on this journey together and pave the way for your local agricultural venture’s success.
Want to transform your small land into a farming business? Indeed, a brilliant business venture to undertake. After all, all sorts of farming businesses enjoy a vast market.
Anyone can start a farming business. However, a detailed business plan is essential to drive this business to its desired potential and secure funding if required.
Need help writing a business plan for your small farm? You’re at the right place. Our small farming business plan template will help you get started.
Free Business Plan Template
Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!
Writing a small farming business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:
An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.
Here are a few key components to include in your executive summary:
Financial highlights:, call to action:.
Ensure your executive summary is clear, concise, easy to understand, and jargon-free.
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The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:
Business history:.
This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.
The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.
Market trends:.
Here are a few tips for writing the market analysis section of your small farming business plan:
The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:
Describe the type of products your small farming business will offer. A vegetable farming business may include a detailed description of crops and their varieties here.
Provide a list of products that will be available at your small farm. This list may include,
Quality measures:.
In short, this section of your small farming plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.
Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:
Marketing strategies:, sales strategies:, customer retention:.
Overall, this section of your small farming business plan should focus on customer acquisition and retention.
Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your small farming business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.
The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:
Operational process:, equipment & machinery:.
Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.
The management team section provides an overview of your small farming business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.
Key managers:.
Compensation plan:, advisors/consultants:.
This section should describe the key personnel for your small farming services, highlighting how you have the perfect team to succeed.
Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:
Cash flow statement:, balance sheet:, break-even point:.
Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.
The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.
Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.
Remember, the appendix section of your small farming business plan should only include relevant and important information supporting your plan’s main content.
The Quickest Way to turn a Business Idea into a Business Plan
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This sample small farming business plan will provide an idea for writing a successful small farming plan, including all the essential components of your business.
After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our small farming business plan pdf .
Frequently asked questions, why do you need a small farming business plan.
A business plan is an essential tool for anyone looking to start or run a successful small farming business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.
Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your small farm.
There are several ways to get funding for your small farming business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:
Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.
Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry. We can categorize the process of writing a good market analysis section into the following steps:
Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.
The level of detail of the financial projections of your small farming business may vary considering various business aspects like direct and indirect competition, pricing, and operational efficiency. However, your financial projections must be comprehensive enough to demonstrate a complete view of your financial performance.
Generally, the statements included in a business plan offer financial projections for at least the first three or five years of business operations.
The following are the key components your small farming business plan must include:
Indeed. A well-crafted small farming business plan will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.
So, if you have a profitable and investable business, a comprehensive business plan can certainly help you secure your business funding.
About the Author
Upmetrics Team
Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
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Description
This publication shows how to build your own comprehensive business plan, step-by-step. Identify strengths and weaknesses. Choose key performance indicators. Lots of worksheets and examples.
Title | How to write a business plan and review farm performance |
---|---|
Author(s) | |
Pages | 64 |
ISBN | ISBN 978-0 7313 0628-2 |
Catalogue number | B734 |
Year published | 2010 |
Publisher | Tocal College |
Price | $25.00AUD (inc GST) |
- $25.00 | |
- $12.99 (iPad/iPhone) | |
- $12.99 (PC/Android) |
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Summer series: a practical guide to writing your farm business plan, summer series: it pays to listen better, welcome to our summer series, summer series: advice for young farmers, farmers are losing the perception battle on food prices, [best advice] this eight-point plan can help put you on the right path.
Published: May 1, 2024
Features , Guide Business
Farm business planning is always a popular topic of discussion among advisors and management gurus. But statistics still show a slow uptake by farmers. Those using a written business plan, however, are reaping the benefits. Follow the eight steps below to get started. – April Stewart, Associate Editor.
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Summer is when many farm operations fall behind on paperwork and bookkeeping. It’s understandable. Producers are outside raising crops and…
If you’re an avid Country Guide reader, you know that farm business planning continues to be a popular topic of discussion among advisors and management gurus.
Since the “Healthy Minds, Healthy Farms” study was released by Farm Management Canada last May, we have talked to farmers across the country who are regularly using a written business plan and reaping the benefits.
This winter we shared the stories of how a farm business plan drives Hannah Konschuh ’s daily activities, how putting a plan on paper for the first time was a game changer for the O’Rourkes and how focusing on specific components of the plan provides the Cronins stability during uncertain times.
Statistically speaking, these farmers represent the minority. It turns out 74 per cent of Canadian farmers do not have a written plan.
But now that you know more about this management practice and how it contributes to financial success and improved mental health, maybe you’re giving more thought to starting your own plan. Or perhaps you are newly in the driver’s seat of a family operation and looking to adopt new management practices.
Regardless of your current situation, the big question remains: How do you get started?
For Kim Gerencser, senior manager with MNP’s farm management consulting team, the first step is to establish clear, tangible goals.
When guiding clients through the business planning process, he initially asks what their goals are. More often than not, his question is met with blank stares.
“Getting started with a business plan is probably the hardest step of the entire process because managers need to decide what they really want to achieve,” says Gerencser, who also serves as chair of the Canadian Association of Farm Advisors (CAFA).
Setting a goal to be as profitable as possible, for example, is not specific enough. “What do you want your farm business to look like in five, 10 and 20 years? Is the 20-year goal to successfully pass it on to the next generation?” Gerencser asks.
To break down this task, he suggests starting with short-term goals and evaluating what equipment or infrastructure needs attention within the next five years.
“It can be really challenging to define your goals but without this very clear first step, the planning process is doomed to fail before it even starts,” he says.
The next step is conducting an internal audit, or honest evaluation of the current state of the business. This means assessing the financial position but also where your farm is at in terms of management and production capabilities and human resource capacity.
In addition, Gerencser adds that family support and the physical and mental health of key owners and managers should be evaluated.
“What are your strengths? What are your limitations? Where is the business positioned to excel? Where is it positioned to struggle?” he asks. “We need to get a clear snapshot of where we’re at on day one so we know what we’re working with.”
Heather Watson , executive director of Farm Management Canada, encourages the use of the Online Farm Business Self-Assessment Tool . She advises that multiple members of the management team can complete the assessment and compare their results before continuing to help support the planning process.
The analysis completed at this stage can then be used to assess the previously established goals. If the goals are not realistic given the resources available, the first step of the process can be revisited. “It doesn’t mean that you have to change your goal but perhaps you can lengthen the time frame and add a new short-term goal that involves strengthening your resources,” explains Gerencser.
Once the evaluation is complete and attainable goals are confirmed, it’s time to determine what tactics need to be implemented.
Gerencser says it’s a phase in the planning process where a lot of people hit a roadblock. It can be overwhelming to identify what changes need to be made within your business, which means inertia can set in.
If this is the case for you, he stresses the importance of reaching out for help. He recommends seeking advice from your accountant, lawyer or banker first — an advisor who has seen many business plans but also knows your business.
“Asking for help is incredibly important but don’t just make one phone call and stop at that,” he suggests. “Make several calls to gather several different opinions so you can make the most informed decision possible.”
If your goal is to expand your business by 15 per cent in the next 10 years but cash flow has been identified as a challenge, for example, an advisor like Gerencser could help. Initially, he could analyze cash inflow and outflow but his findings may lead to the involvement of other advisors.
“If gross margin is insufficient, I could point that out but I’m not an agrologist so I likely can’t help you fix it,” he explains. “If the operating expenses are too high, I can help identify some strategies to help you rectify that but if overhead is too high, we may need to involve your banker.”
As strategies and tactics are developed, it is key to record them in a written document. Many advisors, provincial ministries and organizations like Futurpreneur have their own business plan templates, but it is important to note that not all sections may be applicable to your farm.
Gerencser suggests part of the honest evaluation may be identifying what parts of a business plan are critical and which are less applicable to your situation.
Watson agrees that business plans can take many forms of complexity and the best planning resources are relative to the format and function the users are looking for. Above all, she notes that a solid plan includes both strategic and operational elements.
“Some people forget the strategic piece and maybe assume a business plan is the same thing as a budget,” she says. “The budget is part of it, but having a vision, goals and priority activities to meet those goals is key to creating the operational element.”
Gerencser knows the planning process seems daunting. It’s not the type of project you can tackle in an afternoon and it does require significant effort, especially when creating a plan for the first time.
Even so, he has no doubt that having a written plan is worth it. Says Gerencser, “The immediate and future benefits of going through this long and sometimes difficult process can be immeasurable.”
A written business plan is a key tool that sets your farm business up for success. While the necessary components vary from business to business, here are eight sections that most farm business plan templates include:
1. Executive summary A concise summary of the key points of the business venture and the purpose of the plan.
2. Business and ownership profile A description and summary of the company’s past achievements and plans for growth. This section includes the ownership structure and the qualifications and experience of each owner.
3. The strategic plan Present the vision of what you want the business to look like in the future and a mission of what the business is doing now to be viable and sustainable. This section includes an analysis of internal and external strengths, weaknesses, opportunities and threats (SWOT), outlines key performance indicators and lists short-term and long-term goals.
4. The marketing plan Describe the industry you operate in, what products you market, who your target customers are, the quantities you plan to sell and the distribution channels you plan to use. If applicable, this section can include steps for attracting and retaining customers as well as strategies for pricing and promoting your products.
5. The production plan Provide an outline of your operation. Describe the resources, production processes and key inputs required for production as well as a basic cost structure. This section is sometimes called the operating plan.
6. The human resources plan Present the organizational structure including key employees and their education or experience. This section includes strategies for recruiting, hiring, training and disciplining employees. Detail salary and compensation information, a labour policy and a succession plan, if applicable. Name the external advisors who play a role in the management of your business.
7. The financial plan This section details the business model for earning revenue. For existing businesses, include financial statements from the past five years and a monthly cash-flow forecast for the upcoming year. For new ventures, include projected financial statements for the first three years of operations and a monthly cash-flow forecast for the upcoming year. The financial statement should include an income statement, balance sheet, cash-flow summary, financing schedule and key ratio analysis.
8. Risk management and contingency plans Present an assessment of potential risk events or incidents and describe the current processes for identifying, measuring and managing risk and detail management response strategies.
Sources : Alberta Ministry of Agriculture and Forestry; Farm Credit Canada; Ontario Ministry of Agriculture, Food and Rural Affairs.
– This article was originally published in the April 2021 issue of Country Guide .
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How to write a farm business plan.
Getting a loan for your agricultural business — no matter the size or scope — means asking the lender to have faith in your ability to manage a full-fledged operation and your finances in a healthy way. The best way to prove that is by coming prepared with a farm business plan proposal.
No pressure, right? While it may seem daunting and scary, we’ve broken down the steps to writing the perfect business plan below. Read on to learn more and check out the end of this guide for additional resources to help you craft a top-notch business plan.
You can set yourself up for success — both in business and with your lender — by having a detailed business plan for your farming operation. It doesn't need to be pretty, but you do have to prove that you're willing to put the time and effort into creating a well thought out course of action for your operation.
Are you already operating but don't have a plan? That's okay! It's never too late to put extra thought into how your operation will continue to fulfill your livelihood.
Whether you're a new farmer looking for a loan , or a seasoned grower that needs funding for a new agribusiness , there are a few things that you want to make sure you include in your agricultural business plan.
Keep it simple on the cover page. The most important information here is accurate contact information so your lender can get in touch with you easily. Include your mailing address, phone, email, and fax if you have it.
Although it will be the first page of your farm plan, this will be the last section that you write, since it acts as a summary of all your key points in your plan. Remember that this is the first section that your lender will read , so they’ll expect to see all of the highlights that make approving this loan a good financial decision for both you and the lending organization. Include points about expansion plans, market opportunities, financial trends and projections in a short and easy to read summary. Treat this section as if you're telling a stranger about your operation and you want to give them an overview of what you do and what sets you apart from other businesses in your industry.
What are your key business objectives? In this part of your farming business plan, you'll want to describe your products and services your business will offer.
Start by describing how your business will operate and include what makes your business unique. Provide details regarding the size of the operation, location, and note any expansion plans.
Who is your target audience? Who will benefit from your products or services produced from your farm business?
Think about the desire and drive behind why you want to pursue this business venture. It is common to connect your business why with your mission statement.
If you’re starting a new operation, clearly state how much money you are applying for, how you plan to use it and how it will make your business more profitable, thereby ensuring repayment.
Creating your own farm business plan will take time and effort. As you complete sections, send them to partners or colleagues to review as you go along. If you have any questions on farm business plan examples or more specifically what lenders are looking for, give us a call.
Business history:.
How long have you been in operation? Are you starting from scratch or did the business have previous owners?
Describe the strengths and weaknesses of your business.
What is your plan of action? What specific tasks need to be completed in order to reach your business goals?
Goals are often broken into two categories — short term and long term. Short term goals are focused on actions likely to be achieved in 1-3 years, and long term goals are likely accomplished in 3-10 years, or beyond.
What risk management practices do you have in place? Think about your business contingency plan, insurance coverage , regulatory requirements, and your market and production diversification.
For some people, this can be the most fun or the most challenging part of creating your small farm business plan. Before thinking about your marketing tactics, think about the data you need to make informed business decisions .
Researching your target market is key to understanding what opportunities are available in the marketplace. Is there current market share to gain? How will you remain competitive as a farm business? Who are your biggest competitors in the marketplace? Do you anticipate any obstacles?
How will your farm business generate farm income? Think about how your product will be sold and priced? What is your projected or estimated income? How are you going to gain commitments and contracts to sell your products?
What marketing strategy will your business use to reach your business goals? As a small business, will you utilize tools like social media, email marketing, and/or ecommerce to maximize your marketing efforts to connect with your target audience? Check out our blog on how to create a marketing plan for your farm and download a free template!
Arguably, the most important part of your agricultural business plan is how you will finance your operation. In this section, make sure to take time to complete your balance sheet. The balance sheet will identify your cash-basis income trend, breakeven analysis, and sensitivity analysis. This statement is a summary of what you own vs. what you owe.
The income and expenses statement shows your business’ profit and loss over a period of time, determined by taking all the revenue and subtracting all expenses. This will show the profitability of your operation.
Business advisors are a group of professionals who serve as subject matter experts to enhance productivity, business, and on-farm profitability, while offering technical insight for your farm operations. Surrounding yourself with people who know how to support your farming venture will help to support and find your long-term business success. You will want to organize your team that might consist of an attorney, accountant, lender, insurance provider, and consultants in the last section of the business plan. Did you know Farm Credit offers services for Accounting, Records, Payroll and Taxes, Appraisal, Business Consulting, Farm Succession Planning, and more? Give us a call at 888.339.3334 or view our full list of services here .
Congratulations! You’ve made it through each section of how to write your business plan! If you’re interested in more coaching on your business plan, check out the resources below or give us a call to connect with a local lender — we're happy to help.
Request your Business Plan Template and replay of our How to Write a Business Plan webinar here.
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Six key components of a farm or ranch business plan, cornhusker economics december 19, 2018 six key components of a farm or ranch business plan.
By Jay Parsons
PDF | Markets
Developing a good farm or ranch business plan can have many benefits. In an earlier Cornhusker Economics article, I outlined six good reasons to develop a business plan (Parsons 2015). It helps to get your business organized and moving in the right direction. It lets your lender know you have a plan to succeed, which opens up your access to capital. It also helps you organize your thoughts, clarifying the goals and objectives you wish to achieve. In summary, putting together a written business plan increases the likelihood of your business achieving success (Scarborough 2011).
This is a great time of year to get started on putting together a written business plan for your farm or ranch operation. However, getting started on it can seem like a daunting task. While there is business planning software out there, much of it isn’t well suited for putting together a complete farm or ranch business plan and starting with a blank sheet of paper can be intimidating. So, my goal with this article is to get you started by providing six key components to include in your farm or ranch business plan. Make these six components your headings and start filling in the details as described below. Before long, you will find yourself with a good business plan taking shape and a document you can share with your lender as well as use on a day-to-day basis to help guide your farm or ranch in the direction you want it to go.
1. Introduction
A good introduction contains several key subcomponents of information that summarizes what your business is all about. Even though you may finish writing it last, you should start your document with an executive summary paragraph or two that captures the essence of your business. Provide brief information on the key products or services producing revenue, the qualifications of the people involved in the operation, the land resources and any competitive edge built up over the years. Follow this summary with a mission statement for your operation that captures why you are in the farming or ranching business. The introduction section should also provide an overview of the history of the operation and three to five goals you wish to accomplish in the next five years.
2. Land Resource Management.
Farmers and ranchers rely on the land to make a living. This section should describe the land resources involved in the operation, including maps if you have them available. If livestock and perennial pastures are involved in the operation, a grazing management plan would fit into this section. Farmers may want to describe their cropping rotations on various properties and why they use them. Land monitoring practices and plans for mitigating soil erosion or noxious weeds are among the many important elements that can be added to this section over time. Having pages of this section readily available to print out and show potential landlords or new employees is a great resource for those communications.
3. Equipment and Animal Management
Equipment resources and animal resources are the tools that turn land resources into profits. This section should provide an inventory of equipment resources along with a general overview of maintenance plans and replacement decisions. For livestock operations, an inventory of animals would be included here. Details regarding genetics, breeding plans, nutrition plans, animal handling protocol, and animal health plans including vaccination schedules should be added. Like the land resource management section, this is a section where having pages ready to print out and share with employees is a great communication resource. It can also make it easy to share information with your veterinarian or nutritionist to get his or her feedback on the management plans you have in place for your livestock.
4. Marketing Plan
A good marketing plan can take some time to build but starting one is easy. It starts with identifying the products or services you intend to sell to generate revenue and the goals you wish to accomplish with your marketing plan. You then need to complete the marketing plan by answering several key questions. When will you be selling the products and/or services? To whom will you be selling? Where will these transactions be taking place? How will you get these products and/or services to the customer? What are the tools available to help you get what you want out of these sales transactions and how do you intend to use those tools? Marketing plans don’t have to be complicated to be effective, but there are a lot of things to consider that can be added to this section over time. If you are not marketing a commodity, it is important to identify what sets your products or services apart from your competitors and to clearly identify the size of the market you intend to be selling into. Your banker will want to know that your sales forecasts are realistic and so should you.
5. Human Resources
Personnel management can sometimes be overlooked on a small farm or ranch operation. However, if you want to attract and keep good employees (including relatives) you need to have a plan in place to do it. This section should describe the people involved in ownership as well as the people managing the operation on a day-to-day basis, including their roles and responsibilities. What other personnel are involved in the business and who is responsible for managing them? How do new people get trained within the business? Having a plan in place describing how they will grow in knowledge and ability and who will help them do it is a great motivator for any employee or family member involved in the farm or ranch. This can include a brief overview of succession plans, too, if you have those available.
6. Financial
The financial section of your business plan includes balance sheets, income statements, projected cash flows, loan schedules, depreciation schedules, and descriptions of contingency or financial risk management plans. Obviously, this section is important. It depends upon having good financial records and discipline in pulling them together into meaningful information on a regular basis. Whereas other sections of your business plan may not need to be updated more than every few years, this section needs updating on a regular basis. This section will be the section your lender will be most interested in seeing, but that doesn’t diminish the importance of the other five sections preceding it.
Business planning is an ongoing process. Business plans need regular updating after they are developed and are never really done. If you don’t have a business plan, now is the time to start one. Use these basic sections to help define your farm or ranch business. Populate each of them with some information now and then build in more detail as you go focusing on a few sections at a time. Enlist the help of others. Business plans are best done as a team as it helps get the best ideas into written form, speeds up the process of getting them done, and helps create buy-ins from everyone to follow through with the plan once it is developed. Getting a business plan down in writing gets you moving in the right direction toward reaping the full benefits of running a successful farm or ranch business.
References:
Parsons, J. 2015. “Why Develop a Business Plan?” University of Nebraska-Lincoln, Cornhusker Economics , February 18, 2015.
Scarborough, N. M. 2011. Essentials of Entrepreneurship and Small Business Management. 6 th Edition. Boston: Prentice Hall.
Jay Parsons Associate Professor Department of Agricultural Economics University of Nebraska-Lincoln 402-472-1911 [email protected]
Marcus Coleman
A farm business plan can fulfill several purposes for a farm owner, including:
There is no right or wrong format to use in writing a farm business plan. The primary objective is to effectively communicate what the farm business is about and the goals and strategy for business success. The plan must also convey the long-term feasibility of the farm business, supported with the vision of the farm owner as well as research related to the farm business and market environment that the farm owner seeks to participate in.
In writing a farm business plan, these steps can assist in constructing the plan:
Step 1: Write out the farm mission statement. The mission statement defines the farm business in the context of its primary business function, its products and how it seeks to produce them, its customers, and what unmet customer need it seeks to fill.
Step 2: Write out the farm vision statement. The vision statement states what the farm owner aspires the farm business to be in the future.
Step 3: Write out the farm values. Values explain how the farm business is going to conduct itself in the context of what and who it values.
Step 4: Provide an overview of the farm business. The overview will assist in assessing the farm business and provide a synopsis of what the farm business seeks to do and how it plans to achieve its goals. This overview should consist of the following:
Step 5: Write out the farm goals and include an action plan for each. Including goals and action plans in the farm business plan is necessary as they allow the farm owner to (a) clarify ideas, (b) focus efforts, (c) have a plan to use those time and resources productively, and (d) increase the chances of achieving those goals. Including goals also allows others to understand how the farm business plans to achieve success. There is no right or wrong number of goals to include, but the goals that are included must be attainable within the scope of the farm business.
Every goal must have an action plan that explains (a) who is responsible for the goal, (b) the tasks necessary to complete the goal and (c) when the goal should be completed. The farm owner should also develop a more detailed, step-by-step action plan for their farm goals for personal use. A simple format to highlight farm goals and associated action plans in the farm business plan is show in Tables 1-3.
Short-Term Goal 1: | Short-Term Goal 2: | Short-Term Goal 3: |
Action Plan 1: | Action Plan 2: | Action Plan 3: |
Intermediate Goal 1: | Intermediate Goal 2: | Intermediate Goal 3: |
Action Plan 1: | Action Plan 2: | Action Plan 3: |
Long-Term Goal 1: | Long-Term Goal 2: | Long-Term Goal 3: |
Action Plan 1: | Action Plan 2: | Action Plan 3: |
Step 6: Provide an overview of the target customers and planned marketing strategy. The marketing planning process identifies the farm business’s target customers and the unmet customer need the farm business seeks to serve. The market planning process is summed into three questions:
When defining who the target customer is, the farm owner must consider the following questions:
When developing a market strategy, the farm owner must also consider the following questions:
Table 4 highlights a format that can be used to present the marketing plan in the farm business plan.
Describe the characteristics of the target customer. | What are the marketing goals? | How will products be promoted? |
Why should the products be the first choice of customers? | What is the plan to take advantage of market opportunities and deal with market threats? | Where will customers buy the products? |
What do customers gain from buying the products? | How will the products be priced and what are the desirable product characteristics? | How will success be measured? |
DiGiacomo, Gigi, Robert King and Dale Nordquist. 2003. Building a Sustainable Business: A Guide to Developing a Business Plan for Farms and Rural Businesses. College Park, MD: Sustainable Agriculture Research and Education (SARE).
Hunger, J. David and Wheelen, Thomas L. 2007. Essentials of Strategic Management. 4th Edition. Prentice Hall. Upper Saddle River, New Jersey.
Marcus A. Coleman is the program director of the Grow Louisiana Beginning Farmer Training Program, Louisiana State University, LSU AgCenter.
Contact person for more details on this publication: [email protected].
This publication was developed as a part of the Grow Louisiana Beginning Farmer Training Program and supported by a U.S. Department of Agriculture National Institute of Food and Agriculture grant (Award # 2018-70017-28597).
Visit our website: www.LSUAgCenter.com
Luke Laborde, Interim LSU Vice President for Agriculture
Louisiana State University Agricultural Center
Louisiana Agricultural Experiment Station
Louisiana Cooperative Extension Service
LSU College of Agriculture
Pub. 3800 (online) 04/22 rev.
The LSU AgCenter and LSU provide equal opportunities in programs and employment.
Email marcus coleman, innovate . educate . improve lives.
The LSU AgCenter and the LSU College of Agriculture
Most entrepreneurs are terrified of planning. But this can be a different scenario for you. A farming business can be more successful if you will develop a farm business plan . Not only will you set the steps that you need to follow to achieve your goals, but you can also become more prepared with the risks. More so, your strategic plans will help you develop a mission statement that will guide you through. So, are you ready for this? Below,we provide you a farm business plan examples that you can look into as a guide.
1. farm business plan template.
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A farm business plan is an excellent organizational and business material that you can use for a variety of purposes. All you must do is to be familiar with business plan guidelines and the basics of farm business management so you can already identify the specific business plan document that you need.
Have you ever been to a hotel where you can see each process’s organization from the welcoming of guests up to their check-out procedures? One of the planning documents that provide a contribution to that organization is a hotel operational business plan . This can be compared to the usage of a farm business plan if you want to ensure that the operations of your farm business are laid out properly. According to a gathered analysis published by Noble Research Institute, the advantages of a farm business plan includes an easy application to loans. It can also promote solidarity within the farm business’s stakeholders. This is relatively substantial, especially for every small business in the agricultural industry.
Creating your farm business plan can be easier if you will refer to helpful agriculture business plan examples. But aside from the items mentioned above, there are still some items that can make it more efficient for you to develop an outstanding, complete, and organized farm business plan . Some of these tips and guidelines are all listed below.
To begin with, always start by visualizing your ideas. After that, you can now proceed with outlining your goals and objectives. Remember to make it as realistic as possible. Come up with measurable and obtainable plans. This should include proposals , marketing , and budget . Truly, there is no easy business. So, plan long-term, and everything else will follow.
Next, you have to learn how to write an executive summary for your business plan. Especially for farm business startups, an executive summary is one of the parts of the farm business plan that will be first seen by your target audience. Make it as appealing and as presentable as possible so you can already get positive responses and impressions. But remember, don’t make it too long and invite confusion from readers. Make it precise as much as possible.
What could be the necessary steps to do in achieving your goals? Here, you have to outline your action plans . It should be relevant to your objectives. Therefore, they must align. You can also set a schedule to follow. This helps you cope with your daily tasks while keeping it on time. Another thing to remember is to make it attainable for everyone in the organization.
make sure that your farm business plan can present your business values. It should be a reflection of your identity, brand, mission statement , and image as a business. These characteristics can set you apart from your competition. It can promote memory retention, which is an excellent way for you to remain relevant and memorable in the marketplace where the farm business belongs.
Don’t propose it right away. But make sure that you check your content from the cover page down to the last pages. Is your budget for the business plan considerable? Can your members achieve success in no time? It is essential to check it first before using it for actual scenarios. This helps you come up with an excellent report later on.
How much is a typical business plan.
The price of a business plan depends on the agency that creates it. But in most cases, it reaches up to $15,000 for a complete plan.
A business plan is a necessity if you take a look at the bigger picture when it comes to finances and projects. This helps you accomplish more than what you imagine for your business.
Among the various elements of a business plan, the executive summary and market analysis are standard.
Again, feeling overwhelmed with everything that you need to consider when developing a farm business plan is normal. However, you should make sure that you will not be carried away so you can focus on the items that can help you give the farm business a boost in productivity, efficiency, sales, visibility, and leads. Be mindful of how you will develop farm planning strategies. Also, see how an effective one can improve your farm business’s overall operations . So, get ready with your document and follow the list of steps above.
Text prompt
Create a study plan for final exams in high school
Develop a project timeline for a middle school science fair.
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Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.
Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.
Bah. Sounds like homework, right?
Yes. Yes, it does.
However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.
Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.
Table of Contents
What Is a Business Plan?
How to Write a Business Plan in 6 Steps
Startup Business Plan Template
Business Plan Examples
Work on Making Your Business Plan
What is a business plan why do you desperately need one.
A business plan is a roadmap that outlines:
While it’s not required when starting a business, having a business plan is helpful for a few reasons:
Beyond the reasoning, let’s look at what the data says:
Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.
Don’t Skip: Business Startup Costs Checklist
Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:
You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.
Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.
If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.
Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.
Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.
Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.
You might not have answers to all the sections you should include in your business plan. Don’t skip over these!
Your audience will want:
Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.
Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.
The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.
Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:
Below, we’ll break down each of these sections in more detail.
While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.
Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.
Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.
In this section, you can dive deeper into the elements of your business, including answering:
Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:
As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.
For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.
You’ll need to include:
Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.
This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.
Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.
The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.
If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:
FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.
Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.
The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.
Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.
This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?
Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:
It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?
Read More: 16 Financial Concepts Every Entrepreneur Needs to Know
Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.
Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.
Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?
Products and Services Detail the products and services you offer. How do they work? What do you charge?
Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.
Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.
Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.
Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:
If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.
Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.
Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).
Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.
That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.
Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.
Keep Learning: New Product Development Process in 8 Easy Steps
Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.
The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.
Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.
Don’t let creating a business plan hold you back from starting your business. Writing documents might not be your thing—that doesn’t mean your business is a bad idea.
Let us help you get started.
Join our free training to learn how to start an online side hustle in 30 days or less. We’ll provide you with a proven roadmap for how to find, validate, and pursue a profitable business idea (even if you have zero entrepreneurial experience).
Stuck on the ideas part? No problem. When you attend the masterclass, we’ll send you a free ebook with 100 of the hottest side hustle trends right now. It’s chock full of brilliant business ideas to get you up and running in the right direction.
Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.
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Use this free business plan template to write your business plan quickly and efficiently.
A good business plan is essential to successfully starting your business — and the easiest way to simplify the work of writing a business plan is to start with a business plan template.
You’re already investing time and energy in refining your business model and planning your launch—there’s no need to reinvent the wheel when it comes to writing a business plan. Instead, to help build a complete and effective plan, lean on time-tested structures created by other entrepreneurs and startups.
Ahead, learn what it takes to create a solid business plan and download Shopify's free business plan template to get started on your dream today.
This business plan outline is designed to ensure you’re thinking through all of the important facets of starting a new business. It’s intended to help new business owners and entrepreneurs consider the full scope of running a business and identify functional areas they may not have considered or where they may need to level up their skills as they grow.
That said, it may not include the specific details or structure preferred by a potential investor or lender. If your goal with a business plan is to secure funding , check with your target organizations—typically banks or investors—to see if they have business plan templates you can follow to maximize your chances of success.
Our free business plan template includes seven key elements typically found in the traditional business plan format:
This is a one-page summary of your whole plan, typically written after the rest of the plan is completed. The description section of your executive summary will also cover your management team, business objectives and strategy, and other background information about the brand.
This section of your business plan will answer two fundamental questions: “Who are you?” and “What do you plan to do?” Answering these questions clarifies why your company exists, what sets it apart from others, and why it’s a good investment opportunity. This section will detail the reasons for your business’s existence, its goals, and its guiding principles.
What you sell and the most important features of your products or services. It also includes any plans for intellectual property, like patent filings or copyright. If you do market research for new product lines, it will show up in this section of your business plan.
This section includes everything from estimated market size to your target markets and competitive advantage. It’ll include a competitive analysis of your industry to address competitors’ strengths and weaknesses. Market research is an important part of ensuring you have a viable idea.
How you intend to get the word out about your business, and what strategic decisions you’ve made about things like your pricing strategy. It also covers potential customers’ demographics, your sales plan, and your metrics and milestones for success.
Everything that needs to happen to turn your raw materials into products and get them into the hands of your customers.
It’s important to include a look at your financial projections, including both revenue and expense projections. This section includes templates for three key financial statements: an income statement, a balance sheet, and a cash-flow statement . You can also include whether or not you need a business loan and how much you’ll need.
What do financial projections look like on paper? How do you write an executive summary? What should your company description include? Business plan examples can help answer some of these questions and transform your business idea into an actionable plan.
Inside our template, we’ve filled out a sample business plan featuring a fictional ecommerce business .
The sample is set up to help you get a sense of each section and understand how they apply to the planning and evaluation stages of a business plan. If you’re looking for funding, this example won’t be a complete or formal look at business plans, but it will give you a great place to start and notes about where to expand.
A lean business plan format is a shortened version of your more detailed business plan. It’s helpful when modifying your plan for a specific audience, like investors or new hires.
Also known as a one-page business plan, it includes only the most important, need-to-know information, such as:
💡 Tip: For a step-by-step guide to creating a lean business plan (including a sample business plan), read our guide on how to create a lean business plan .
It’s tempting to dive right into execution when you’re excited about a new business or side project, but taking the time to write a thorough business plan and get your thoughts on paper allows you to do a number of beneficial things:
A business plan can be as informal or formal as your situation calls for, but even if you’re a fan of the back-of-the-napkin approach to planning, there are some key benefits to starting your plan from an existing outline or simple business plan template.
A blank page can be intimidating to even the most seasoned writers. Using an established business planning process and template can help you get past the inertia of starting your business plan, and it allows you to skip the work of building an outline from scratch. You can always adjust a template to suit your needs.
If you’ve never sat through a business class, you might never have created a SWOT analysis or financial projections. Templates that offer guidance—in plain language—about how to fill in each section can help you navigate sometimes-daunting business jargon and create a complete and effective plan.
In some cases, you may not need to complete every section of a startup business plan template, but its initial structure shows you you’re choosing to omit a section as opposed to forgetting to include it in the first place.
There are some high-level strategic guidelines beyond the advice included in this free business plan template that can help you write an effective, complete plan while minimizing busywork.
If you’re writing a business plan for yourself in order to get clarity on your ideas and your industry as a whole, you may not need to include the same level of detail or polish you would with a business plan you want to send to potential investors. Knowing who will read your plan will help you decide how much time to spend on it.
Understanding the goals of your plan can help you set the right scope. If your goal is to use the plan as a roadmap for growth, you may invest more time in it than if your goal is to understand the competitive landscape of a new industry.
Writing a 10- to 15-page document can feel daunting, so try to tackle one section at a time. Select a couple of sections you feel most confident writing and start there—you can start on the next few sections once those are complete. Jot down bullet-point notes in each section before you start writing to organize your thoughts and streamline the writing process.
Planning is key to the financial success of any type of business , whether you’re a startup, non-profit, or corporation.
To make sure your efforts are focused on the highest-value parts of your own business planning, like clarifying your goals, setting a strategy, and understanding the target market and competitive landscape, lean on a business plan outline to handle the structure and format for you. Even if you eventually omit sections, you’ll save yourself time and energy by starting with a framework already in place.
What is the purpose of a business plan.
The purpose of your business plan is to describe a new business opportunity or an existing one. It clarifies the business strategy, marketing plan, financial forecasts, potential providers, and more information about the company.
If you need help writing a business plan, Shopify’s template is one of the most beginner-friendly options you’ll find. It’s comprehensive, well-written, and helps you fill out every section.
The five essential parts of a traditional business plan include:
There are several free templates for business plans for small business owners available online, including Shopify’s own version. Download a copy for your business.
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Navigating the complexities of business requires a clear understanding of your strategic position, and a SWOT analysis is an essential tool to help you achieve this clarity. It’s a straightforward method that breaks down into Strengths, Weaknesses, Opportunities, and Threats, providing a snapshot of where your business stands and guiding your future strategic moves.
With this guide, you’ll learn how to leverage your advantages, address challenges, seize new opportunities, and guard against potential threats. Let’s dive into the process together and set a strong foundation for your business’s strategic planning. Let’s dive in!
A SWOT analysis is a strategic planning tool used to identify and understand the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. This method helps organizations in assessing both internal and external factors that could impact their objectives.
We use a SWOT analysis for several important reasons in business and strategic planning:
Writing a strength in a SWOT analysis involves identifying and articulating the internal attributes and resources of a business or project that contribute to its success and competitive advantage. Here’s how to effectively write a strength in a SWOT analysis:
Example: Instead of simply stating “Experienced management team” as a strength, you could write: “Our management team has over 50 years of combined experience in the tech industry, including a track record of successful product launches and market expansions. This depth of experience provides us with strategic insights and operational expertise that have consistently resulted in market share growth and above-industry-average profitability.”
Writing a weakness in a SWOT analysis involves acknowledging and detailing the internal factors that limit or challenge your business or project’s ability to achieve its goals. Here’s a structured approach to effectively articulate weaknesses in a SWOT analysis:
Example: Instead of a broad statement like “Inadequate online presence,” a more effective description would be: “Our business currently lacks a robust online presence, reflected in our outdated website and minimal engagement on key social media platforms. This limits our ability to attract younger demographics who predominantly discover and interact with brands online. Improving our online visibility and engagement could enhance brand awareness and customer acquisition.”
Writing opportunities in a SWOT analysis involves identifying and articulating external factors that your business or project could exploit to its advantage. Opportunities are elements in the environment that, if leveraged effectively, could provide a pathway for growth, improvement, or competitive advantage. Here’s how to systematically approach writing opportunities in your SWOT analysis:
Example: Rather than vaguely stating “New market segments,” a more strategic description of an opportunity could be: “With increasing consumer interest in sustainable living, there’s a growing market segment for eco-friendly products. Our business’s strong commitment to sustainability and existing lineup of environmentally friendly products positions us well to capture this emerging market. Expanding our product range to include more items that cater to eco-conscious consumers can tap into this trend, potentially opening up new revenue streams and enhancing our brand’s reputation as a leader in sustainability.”
Writing threats in a SWOT analysis involves identifying external challenges that could pose risks to your business or project’s success. These are factors outside your control that have the potential to harm your operations, financial performance, or strategic positioning. Addressing threats effectively in a SWOT analysis requires a focused approach:
Example: Instead of broadly stating “Economic uncertainty,” a more actionable description of a threat would be: “The looming economic downturn poses a significant threat to discretionary consumer spending. Given our business’s reliance on non-essential luxury products, a reduction in consumer spending could directly impact sales. This economic uncertainty requires us to diversify our product offerings and identify more value-oriented options to maintain customer engagement and spending during tighter economic conditions.”
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With over two decades of experience, Growthink has assisted more than 1 million companies in developing effective business plans to launch and expand their businesses. Trust in our expertise to guide you through developing a business plan that drives your success. In addition to our sample plans, below you’ll learn the answers to key business plan questions and gain insightful tips on writing your business plan.
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Shoutmouth business plan example, business plan examples by business category.
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Sample business plans can help you quickly and easily write a business plan for your own business. Business plans are an important tool for any business, but they can be challenging to create. A sample business plan will help you understand the business plan format , the benefit of market research, and how to write a compelling executive summary. It can also serve as a guide for creating your own business plan, outlining the key sections and providing examples of successful plans. Utilizing the best business plan template can save you time and ensure that your plan is well-structured and comprehensive.
Business plan examples may even help you with the different sections of a plan, including market analysis, business description, cash flow statements/business financial statements, and more. Business plans can also show you how a quality plan in your exact business plan category is organized and shows you the appropriate business communications style to use when writing your business plan.
Any entrepreneur or business owner who has never written a business plan before can benefit from an example or sample plan. New business owners often start with business plan templates , which are helpful but are sometimes more useful after reviewing other sample business plans.
A good sample plan can be a step-by-step guide as you work on your business planning and business idea. Once you have a sense for the flow, specs, and details, etc. that business plans have, utilizing a business plan template will help you pull everything together, helping you create a plan investors and other stakeholders will value. A solid business plan will also help you if you need a bank loan, which may require a startup business plan. Download our free business plan template to help you get started on your own business plan.
Free Download : Free Business Plan Template PDF
First you should read the business plan thoroughly. Study both the type of information provided in key sections like the executive summary, target market analysis, summary, etc., as well as the format and style of the plan. As you read, you may find yourself thinking through things such as improving or evaluating your business planning process, your business idea, or reconsidering who you want to write your business plan for. This is OK and part of the process. In fact, when you start writing a business plan for the first time, it will be much easier because you’ve gone through this process.
After this initial read, outline your business plan and copy in from the sample plan sections that apply to your business. For instance, if the sample plan included public relations in their marketing strategy and sales plan, and you will also use this tactic, you can copy it into your plan and edit it as appropriate. Finally, answer the other questions answered in the sample plan in ways that reflect your unique business and target customers.
Writing a business plan can seem daunting. Starting your business plan writing process by reviewing a plan that’s already been created can remove a lot of mental and emotional barriers while helping you craft the best plan you can.
If your business is unlike any other, using a sample business plan will not be as effective. In this situation, writing a business plan from scratch utilizing a business plan template is probably your best path forward.
As an example, Facebook’s early business plan was unlike others since it was paving a new path and way of doing business. But, groundbreaking new businesses like Facebook are not the norm, and the vast majority of companies will benefit from utilizing sample business plans.
Selecting the appropriate type of business plan depends on your business’s stage, needs, and goals. Let’s explore the different types of business plans and how to determine which business plan format is right for you.
Ultimately, the type of business plan you choose will depend on your business’s specific needs and goals. It may also be beneficial to combine elements from different types of plans to create a customized plan that best fits your business. Carefully consider your objectives and resources before deciding on the right type of plan for your venture.
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
The business plan example below is for Shoutmouth, a company that enjoyed much success in the early 2000’s and which was able to raise funding. While the plan’s premise (social networking) is not as unique now as it was then, the format and structure of this business plan still holds.
Business Overview
Launched in late February 2007, Shoutmouth.com is the most comprehensive music news website on the Internet .
Music is one of the most searched and accessed interests on the Internet. Top music artists like Akon receive over 3 million searches each month. In addition, over 500 music artists each receive over 25,000 searches a month.
However, music fans are largely unsatisfied when it comes to the news and information they seek on the artists they love. This is because most music websites (e.g., RollingStone.com, MTV.com, Billboard.com, etc.) cover only the top eight to ten music stories each day – the stories with mass appeal. This type of generic coverage does not satisfy the needs of serious music fans. Music fans generally listen to many different artists and genres of music. By publishing over 100 music stories each day, Shoutmouth enables these fans to read news on all their favorite artists.
In addition to publishing comprehensive music news on over 1200 music artists, Shoutmouth is a social network that allows fans to meet and communicate with other fans about music, and allows them to:
Success Factors
Shoutmouth is uniquely qualified to succeed due to the following reasons:
Unique Investment Metrics
The Shoutmouth investment opportunity is very exciting due to the metrics of the business.
To begin, over the past two years, over twenty social networks have been acquired. The value in these networks is their relationships with large numbers of customers, which allow acquirers to effectively sell to this audience.
The sales price of these social networks has ranged from $25 to $137 per member. Shoutmouth has the ability to enroll members at less than $1 each, thus providing an extraordinary return on marketing expenditures. In fact, during an April 2007 test, we were able to sign-up 2,000 members to artist-specific Shoutmouth newsletters at a cost of only 43 cents per member.
While we are building Shoutmouth to last, potential acquirers include many types of companies that seek relationships with music fans such as music media/publishing (e.g., MTV, Rolling Stone), ticketing (e.g., Ticketmaster, LiveNation) and digital music sales firms (e.g., iTunes, The Orchard).
Financial Strategy, Needs and Exit Strategy
While Shoutmouth’s technological, marketing and operational infrastructure has been developed, we currently require $3 million to execute on our marketing and technology plan over the next 24 months until we hit profitability.
Shoutmouth will primarily generate revenues from selling advertising space. As technologies evolve that allow us to seamlessly integrate music sampling and purchasing on our site, sales of downloadable music are also expected to become a significant revenue source. To a lesser extent, we may sell other music-related items such as ringtones, concert tickets, and apparel.
Topline projections over the next three years are as follows:
2007 | 2008 | 2009 | |
Shoutmouth Members | 626,876 | 4,289,580 | 9,577,020 |
Unique Visitors | 2,348,050 | 8,390,187 | 18,633,659 |
Total Page Views (Millions) | 20.7 | 273.5 | 781.0 |
Revenues | $165,431 | $2,461,127 | $7,810,354 |
Expenses | $1,407,958 | $2,591,978 | $2,838,423 |
EBITDA | ($1,242,527) | ($130,851) | $4,971,931 |
What is Shoutmouth?
Shoutmouth is an operating company of The Kisco Group Inc. (TKG). Since 2003, TKG has capitalized on web-based marketing opportunities via launching targeted websites and generating web-based leads. TKG revenues in 2005 exceeded $1.3 million and grew to $3.5 million in 2006. Shoutmouth is currently the sole focus of TKG; all other TKG business units have been divested.
Development of Shoutmouth began in August 2006 and the site officially launched on February 21, 2007. Shoutmouth (located at www.shoutmouth.com) is the most comprehensive music news community on the Internet. The website covers 1,200 popular bands and music artists and offers more than 100 new music articles each day. In addition to providing news, Shoutmouth is a web community. That is, Shoutmouth members can actively participate on the site, by doing things such as commenting on news stories and submitting their own stories.
The Market Size and Need for Shoutmouth
The music market is clearly vast. According to IFPI, which represents the recording industry worldwide, global music sales were $33.5 billion in 2005, with the U.S. accounting for $12.3 billion of that amount. Importantly, digitally music sales are seeing substantial growth, with IFPI reporting sales of $400 million in 2004, $1.1 billion in 2005 and $2 billion in 2006.
Online, music is the one of the most frequently searched and accessed interests. For example, according to Wordtracker, the music artist Eminem received over 1.7 million web searches in December 2006, while band Green Day received 534,000 searches.
To put these figures in perspective, top celebrities in other entertainment fields receive but a fraction of this search volume. For example, December 2006 search volumes for select sports stars and actors were as follows: Kobe Bryant, 122K; Tiger Woods, 88K; Cameron Diaz, 332K; and Tom Cruise, 82K.
Conversely, 225 music artists received over 100,000 searches in December 2006, and over 500 music artists received over 25,000 searches.
This data is corroborated by Nielsen BuzzMetrics which plots the most popular topics bloggers are posting about. The chart to the right plots September 25, 2006 to March 25, 2007 and shows how music dominates other entertainment sectors online.
When searching for music artists online, fans, which are primarily between the ages of 13 and 35, are looking for news, pictures, lyrics, videos and audio files. In addition, fans enjoy publicly voicing their opinions about music and interacting with other fans.
There is currently no website besides Shoutmouth that provides comprehensive music news. Currently, to get the latest news on their favorite artists, fans must visit the official websites or fan websites of each of the artists they like . Even then, it is unlikely that the fan will get all the news that has occurred. To solve this problem, Shoutmouth scours the web and uncovers news from thousands of web sites.
What Shoutmouth Does and Will Offer
As of May 2007, the site covers the 1,200 most popular music artists (popularity primarily based on the number of web searches over the past 12 months for each artist).
Shoutmouth currently offers members the ability to:
While establishing itself as the premier music news community, Shoutmouth will embark on the more aggressive goal of becoming the premier music community online . To accomplish this, Shoutmouth will begin to offer additional content (more videos, audio, pictures, lyrics, etc.) and additional functionality (music compatibility testing (e.g., if you like this, you’ll like this), voting capabilities, member-to-member messaging, etc.). We have already begun mapping out our content and technology growths plans to achieve this goal upon financing.
Importantly, Shoutmouth expects to be able to add massive amounts of relevant content (e.g., lyrics, reviews, pictures, video files, audio files, etc.) via member submissions and moderation. This is the same way that YouTube has been able to quickly add millions of videos and Wikipedia has been able to add millions of articles. Importantly, since established music websites (e.g., MTV, RollingStone.com, Billboard.com, etc.) are not community based, they would have to hire thousands of staff members to rival the content that Shoutmouth will have.
How We Get and Publish Our News
Currently, news stories that appear on Shoutmouth are gathered from numerous online sources. Shoutmouth’s staff writers find these stories by using RSS and News feeds that cover thousands of websites. In addition, Shoutmouth community members have the ability to submit stories they find elsewhere.
Typical stories include factual information plus the insight of the author. Shoutmouth editors ensure that all stories are properly classified by artist and genre, and that duplicate articles are filtered out.
Over the past three months, Shoutmouth has developed a solid infrastructure, which we consider a core competitive advantage, that that allows us to provide comprehensive music news . This infrastructure includes:
We are working on a system to ensure that member-submitted articles are automatically routed to the appropriate member of Shoutmouth’s editorial team to improve our efficiencies further.
Shoutmouth’s Goal to Break News First
The majority (approximately 90%) of Shoutmouth’s articles are currently developed by our in-house editorial team, while the balance is submitted by members. In addition, virtually all of our articles are based on information gleaned from other websites. As such, we are generally not the first to publish news; however we are the first and only site to publish all the news in one easily-accessible place. The one current exception is news which is published on bands’ official MySpace pages; Shoutmouth generally publishes articles on this news 24 to 48 hours before it is reported by other news or music sites (due to our efficiencies in finding news).
Shoutmouth realizes that it will gain a key competitive advantage, and will generate significant market buzz, if it is able to report on music news stories before other media sources . To accomplish this, we have begun contacting publicity departments at record labels to gain direct access to music news. We expect these contacts to enable us to gain immediate and sometimes exclusive access to news which will help further establish Shoutmouth as the canonical source for music news. We also plan to more aggressively solicit member submissions of new, buzzworthy news events and will consider offering rewards for unique substantiated news (much the way paparazzi are compensated).
This section of the business plan provides a competitive analysis, which is an overview of the competitive landscape, discusses both indirect and direct competitors and then details Shoutmouth’s competitive advantages.
Because consumer demand for music on the Internet is so great, there are a vast number of music websites. In summary, we consider most sectors of the online music market (which are discussed below) to be indirect competitors and potentially partners, rather than direct competitors, because none of them focus on music news.
The reason we believe that no one focuses on music news is that it is very difficult to do. Because news is very important to music fans, most music websites offer news. However, they primarily get their news from organizations such as CNN, Reuters, the Associated Press and BBC. These large organizations only write about the music stories that have mass appeal, which traditionally amounts to 8-10 music news stories per day. However, since music fans are often zealots when it comes to their favorite artists, they are not merely interested in cover stories. For instance, a U2 fan cares about any U2 news, particularly news that a non-U2 fan might consider insignificant.
In fact, because Shoutmouth is the sole one-stop shop for getting comprehensive music news, there might be an opportunity to license our content to other music websites.
Sectors of the Online Music Market
Shoutmouth specifically comPs in the community-based music news market. While players in this market represent direct competitors, Shoutmouth faces indirect competitors in the following markets:
Each of these markets is described below.
A. Community-Based Sites
Community-based sites, also known as social networking sites, are websites in which members can create profiles, leave comments throughout the site, and communicate with other members among other features.
A June 2006 report by Piper Jaffray entitled “Silk Road: Social Networking is Here to Stay” effectively sums up the power and longevity of social networking:
“We believe social networking sites have become a permanent part of the fabric of web applications and are rapidly becoming one of the most popular activities online, potentially impacting how other popular services such as email, IM, and maybe even search are accessed.
As a clear indication of the growth rate and scale of social networking, consider this: MySpace monthly page views have now surpassed MSN or AOL in the U.S. and are nearly 75% of the size of Yahoo!. Social networking has filled a gap that was left by all the existing portals and web services and it is fulfilling a very important and basic function for millions of users: allowing them to express themselves and connect with their friends, with the two functions tightly integrated.
The leading sites such as MySpace (News Corp), Facebook, and others are amassing significant power in the new landscape of the Internet and the existing Internet companies are likely to have to work with these newcomers as they may yield material control on the flow of traffic to other applications.”
Social networking sites such as MySpace.com, Facebook.com, Tagged.com, and TagWorld.com have educated consumers regarding the value of these sites and how to use them. Their success has spurred genre-specific social networks such as community-based/social networking news sites and music sites, which are discussed below.
Shoutmouth doesn’t view established social networking sites as competitors since these sites have a general focus. That is, members talk about all aspects of life, from dating to music to movies, etc. Conversely, Shoutmouth is solely focused on music.
B. Community-Based News Sites
Community-based news sites are sites in which members decide what’s newsworthy and what’s not. For instance, on Digg.com, the most prominent community-based news site, members “Digg” stories that they feel are most newsworthy. The stories that the community feels are most important rise to Digg’s homepage, while less important stories get little attention.
Digg’s one million members can submit stories, “digg” stories, and comment on stories. Digg focuses on general news with a slant towards technology, gaming and unique/sensational news. While Digg does have a Music area within its Entertainment section, this receives little focus. In fact, at the time of the writing of this plan, Digg’s music home page only includes one article submitted within the past 48 hours. Furthermore, Digg doesn’t pare down the music category into sub-categories such as Rock and individual music artists. Conversely, these sub-categories are the entire focus of Shoutmouth.
Other sites that are similar to Digg include Newsvine.com, Spotback.com and Gabbr.com. Of most relevance is the Digg-like site for music, Noisetap.com, which was launched by Ticketmaster in January 2007.
Like Digg, Noisetap.com allows members to submit and vote for music stories. Noisetap.com is organized by music genre and not by music artist. This most likely will not satisfy the needs of many music fans since they don’t have the ability to find news on the specific artists they care most about. Likewise, without a full-time staff actively researching and publishing news stories at the artist-level, Noisetap.com will never be able to offer the comprehensive news that Shoutmouth does.
While Shoutmouth is currently similar to community-based news sites in that members can submit stories and comment on the news they find most interesting, no established player in the market provides a comprehensive focus on music. In addition, Shoutmouth sees these sites as marketing partners as we have and will continue to submit our stories on them to increase our readership.
C. Community-Based Music Sites
There are many community-based music websites, although none focuses on music news such as Shoutmouth. Conversely, these sites generally give members the ability to create and listen to song play lists. The community acts to help individual members find new music and new friends based on similarities in their music tastes. Prominent sites in this genre include Last.fm, Finetune, Pandora, RadioBlogClub, MyStrands, iLike[1] and iJigg.
Last.fm is the most prominent community-based music site and is a good model with which to compare Shoutmouth. Likewise, we will benchmark our performance against Last.fm as we reach of goal of becoming the premier music news community and focus on becoming the premier music community.
According to Alexa, Last.fm is the 359th most visited site on the Internet. While Last.fm focuses on allowing members to create customized Internet stations based on their music tastes, the site has much additional content and social networking features. For instance, for each artist, Last.fm includes pictures, a bio, concert dates, discography, fans on Last.fm, and similar artists. Fans are also able to create journals and communicate with other fans. Key features that Last.fm doesn’t currently focus on include news and video.
D. Traditional Music Websites
Traditional music websites such as MTV.com, RollingStone.com, Billboard.com, NME.com, AOL Music, and Yahoo! Music tend to have many features such as news, reviews, pictures, videos and audio. While these sites are generally very well done and extremely popular, they are under-serving visitors in two core areas: music news and community .
These sites’ lack of music news stems from the difficulty in creating this news, specifically that it requires filtering through thousands of articles and websites to find relevant stories. Likewise, as discussed, these firms might wish to license our news content in the future.
Regarding community , none of the top music sites are thriving communities. Rather, either these sites offer no community features or they recently began offering select features (e.g., submitting reviews or commenting on articles). Even when available, the community features on these sites are afterthoughts and are not engrained within the core fabric of the sites.
While they haven’t been able to transform their current sites into communities, top music websites clearly understand the power of online music communities and have an appetite for them. For example, in January 2007, MTV invested in social networking website TagWorld. MTV also acquired RateMyProfessors.com and Quizilla.com (teen social network) in January 2007 and October 2006 respectively.
As mentioned previously, our vision is to build and incorporate additional technologies, and use our “army” of members to publish vast amounts of music content on Shoutmouth, in order to fully satisfy music fans and leapfrog traditional music sites in terms of their music content.
E. Official Artist and Fan Sites
Shoutmouth com’s with official music artist websites and fan websites. These sites often include news about the specific artist as well as pictures, videos and other relevant information.
On one hand, official music artist and fan websites are direct competitors to Shoutmouth. This is because some of these sites offer comprehensive news on the specific artist they cover. In addition, many offer forums, discussion boards or other ways to communicate with other fans.
However, two factors separate Shoutmouth from these types of sites: 1) breadth and 2) sophistication.
Specifically, MusicToday offers web design and hosting, develops sophisticated online stores, builds online fan clubs and offers web ticketing among other services to select top music artists such as Dave Matthews Band, Christina Aguilera, Kenny Chesney, Britney Spears and Usher. While offering sophisticated tools for select music artist websites, MusicToday offers little to no music news nor advanced social networking functions. For instance, the official Dave Matthews Band website offers less than one news story per month.
F. Direct Competitors: Community-Based Music News Sites
Shoutmouth’s direct competitors are other music news websites that have social or community features that allow users to join the site, submit articles, comment on articles, create public profiles and/or communicate with other members. Shoutmouth has identified one significant player who offers this service, AbsolutePunk.net.
AbsolutePunk.net has done a good job of building a user base (the site claims 125,000+ registered members and nearly 500,000 un-registered members). In addition, the user base is very active — the average story on their site receives approximately 20 comments. AbsolutePunk.net offers music news, reviews, pictures and interviews among other features.
On the negative side, AbsolutePunk.net’s articles are generally posted by one staff writer (as opposed to Shoutmouth’s five writers), most articles are simply one sentence posts rather than full articles, and no attempt seems to have been made to cover all news stories. In addition, the site only covers the punk music genre. Although “punk” is broadly defined on the site, the site doesn’t cater to genres such as R&B, rap and country among others, failing to satisfy the broader market.
AbsolutePunk.net is owned by Indieclick, a Los Angeles-based media company. According to the AbsolutePunk.net website, the site:
Shoutmouth’s Competitive Advantage
In addition to being the first to fill the untapped market void for comprehensive music news, Shoutmouth’s competitive advantage in the market primarily includes the following:
Online Marketing Sophistication
Content Development Experience and Expertise
Shoutmouth’s team, primarily team members DL and PF, has operated an affiliate marketing business focusing on music for the past four years. Affiliate marketing is defined as a system of revenue sharing between one site (the affiliate) which features an ad or content designed to drive traffic to another site (the merchant). The affiliate receives a fee based on traffic to the merchant which converts to sales.
Our affiliate business has focused on connecting music fans, primarily aged 13 to 30, with music offers such as iPods and ringtones. Over the past two years, we have successful sold affiliated offers to over 500,000 customers. We have become a significant online advertiser, receiving Google’s “over 1 million leads” award, and are recognized as a major player among the top affiliate networks.
It is important to note that affiliate marketing success has been credited with part of MySpace’s success. This is because effective affiliate marketers understand how to drive and convert on Internet traffic.
Shoutmouth will employ its affiliate marketing techniques to drive traffic to Shoutmouth.com and enroll members. We will utilize technologies and proprietary techniques that allow us to monitor multiple metrics such as the cost per visitor, cost per member sign-up, etc., so that we can set and maintain profitable metrics.
Another venture that Shoutmouth team members, primarily PK and DL, launched was the development of over 3,000 niche websites. To create the content for these websites, we employed a virtual work force of over 90 researchers in India and 30 writers and editors in the US.
This experience taught us how to manage a large workforce, train writers to improve content quality and motivate a large group of people. These skill sets will be critical in allowing Shoutmouth to grow the content of the site, as developed by both staff and members, while maintaining quality standards.
Shoutmouth’s marketing plan includes the following:
Online Advertising : Shoutmouth will initiate pay-per-click advertising campaigns on Google and Yahoo! in order to inexpensively drive traffic to the site. Specifically, Shoutmouth believes it can drive qualified traffic to the site for 20 cents per visitor and achieve a 20% member conversion rate, thus generating members at a cost of $1.00 per member.
Keys to Shoutmouth’s success in achieving this metric include:
Invite-A-Friend : Shoutmouth is in the process of creating an aggressive invite-a-friend/member referral program. In doing so, we are following the lead of social movie community, Flixster, which grew to 5 million members within 10 months. It did this by encouraging members, during their initial registration process, to upload and send an invitation to multiple contacts in their email address books. The technology to develop this process is fairly complex and we expect to be completed with and to rollout this program in June 2007.
Direct Email Marketing : Shoutmouth will directly contact bloggers and prominent music fans we find online to tell them about Shoutmouth, encourage them to join, and encourage them to write about Shoutmouth on their blogs and online journals .
Creating/Distributing Buzzworthy/Viral Content : Shoutmouth plans to have several buzzworthy/viral articles (i.e., content that people would want to email to their friends since it is funny, interesting, etc.) on the site each day. With a single click, visitors will be able to send these articles to social bookmarking sites such as Digg.com or Fark.com, where these articles could receive widespread attention. In addition to our traditional news stories, Shoutmouth will also periodically create special reports/features in order to satisfy our members and visitors and to try to get widespread exposure.
An example of the power of such buzzworthy content, Shoutmouth has already succeeded in having two stories accepted by Fark and Digg, which have brought in over 50,000 unique visitors.
Super Fans/Street Team Development : Shoutmouth also plans to recruit “super fans.” Super fans are individuals who are passionate about a certain music artist/band and actively contribute articles and/or comments on Shoutmouth. We will recruit these fans, reward them with status (e.g., adding a gold Shoutmouth headphones image to their profile page) and encourage them to more aggressively promote the site by:
Public Relations : Upon financing, Shoutmouth will hire a public relations firm to help us get mentions in media sources ranging from magazines, newspapers, radio, television and blogs. To date, we have developed and issued press releases via Billboard Publicity Wire which have been syndicated throughout the web. An effective PR firm will enable Shoutmouth to quickly reach a wide audience.
Widgets : Shoutmouth will create artist-specific and genre-specific music news widgets. For example, our U2 widget (see example on right) would include all of the recent U2 articles published on Shoutmouth. The widget can easily be placed on MySpace pages, blogs, etc. Each story title in the widget links to the full article on Shoutmouth.
Shoutmouth has great expectations for our widget. To begin, no such widget currently exists as there is no one place to get comprehensive news for specific music artists. Secondly, each time someone places a Shoutmouth widget on their blog or social networking page, it will effectively market Shoutmouth to a wide audience at zero cost to us.
This section provides a brief roadmap of the initial and future functionality of Shoutmouth.
Initial Site Functionality
The initial Shoutmouth website will include the following features:
Future Site Functionality
Shoutmouth will use news and basic functionality as the platform though which we will build a thriving music community. After initial launch, the Shoutmouth technology team will work on incorporating additional features such as:
Revenue Model
During the first six months, Shoutmouth will not generate any revenues as it will not sell advertising space nor offer products for sale. This decision has been made to spur the growth of the Shoutmouth community. By initially positioning Shoutmouth more as a non-profit, for-the-people-by-the-people venture, members will be more prone to promote the site and invite their friends than if the site looks too commercial.
Starting in September 2007, Shoutmouth will primarily generate revenues from selling advertising space. As technologies (such as the Snocap music widget) evolve that allow us to seamlessly integrate music sampling and purchasing on our site, sales of downloadable music are also expected to be a significant revenue source. To a lesser extent, we may sell other music-related items such as ringtones, concert tickets, and apparel.
Funding To Date
To date, Shoutmouth’s founders have invested $500,000 in Shoutmouth, with which we have accomplished the following:
Funding Requirements/Use of Funds
Shoutmouth is currently seeking $3 million to provide funding for the next 24 months. At this point, the site will be profitable and can grow organically, or additional capital may be sought to more aggressively expand our member base.
The capital will be used as follows:
Financial Projections
Below is an overview of Shoutmouth’s Financial Projections for the next three years. Please see the Appendix for the full financial projections and key assumptions.
Exit Strategy / Valuation Metric
Shoutmouth’s most likely exit strategy is to be acquired by a traditional music website or property (e.g., Viacom/MTV, Ticketmaster, Rolling Stone), an entertainment/media conglomerate (e.g., Yahoo!, IAC/InterActiveCorp, NBC), or a large social networking site (e.g., News Corp/MySpace).
This strategy is supported by the significant M&A activity in the social networking market, which includes the following transactions over the past 24 months:
Del.icio.us | social bookmarking | 12/05 | $30-$35 million | Yahoo! |
eCrush Inc. | teen social network | 01/07 | Undisclosed | Hearst Magazines Digital Media |
FanNation | sports social networking | 01/07 | $20+ million | Sports Illustrated |
Five Across Inc. | social networking | 02/07 | Undisclosed | Cisco Systems Inc. |
Flickr | photo uploading and sharing community | 03/05 | $15-35 million (rumored) | Yahoo! |
Grouper | video creating, uploading and sharing community | 08/06 | $65 million | Sony Pictures |
Jumpcut | video creating, uploading and sharing community | 09/06 | $15 million (rumored) | Yahoo! |
KiwiBox.com | teen social network | 02/07 | Undisclosed | Magnitude Information Systems, Inc. |
MyBlogLog | blog community tool | 01/07 | $10 million (rumored) | Yahoo! |
MySpace | social networking | 07/05 | $580 million | News Corp. |
Quizilla.com | teen social network | 10/06 | Undisclosed | Viacom/MTV Networks |
RateMyProfessors.com | community focused on rating college professors | 01/07 | Undisclosed | Viacom/MTV Networks |
social news site | 10/06 | Undisclosed | Conde Nast/ Wired Digital | |
Sconex.com | social network for high school students | 03/06 | $6.1 million | Alloy Inc. |
TelevisionWithoutPity.com | TV fan site | 03/07 | Undisclosed | Bravo |
Weblogs Inc. | blogging network | 10/05 | $25 million (rumored) | AOL |
YouTube | video community | 10/06 | $1.65 billion | Google Inc. |
Regarding valuation, below are the estimated valuations of social networking companies on a per member basis upon exit:
Based on this data, not only are social networking sites a promising investment, but sites that can acquire members for less than $25 each (a conservative valuation estimate based on the figures above), should earn a solid return on investment. As discussed above, Shoutmouth’s goal is to acquire members for no more than $1 each.
In addition, per the membership projections above, Shoutmouth’s valuation at the end of 2009, at a $25 valuation per member, is expected to be $239 million. A more conservative, using a 24.4 time EBITDA multiple (the average multiple of tech M&A deals in 2006 according to The M&A Advisor), yields a $121 million valuation in 2009.
Shoutmouth’s founding team includes entrepreneurs and managers with a track record of success and a history of successfully working together.
Management Team
DL, Co-Founder and CEO
D has a history of successfully launching and growing businesses of all sizes. As president and co-founder of an entrepreneurial services firm., D has personally assisted in the launch and development of over 100 ventures.
Over the past three years, D founded and has managed The Kisco Group which includes an affiliate marketing division (2006 revenues exceeded $3 million), a search engine optimization business which includes a network of 3,000 websites (2006 revenues exceeded $500,000) and an e-commerce business (which includes TopPayingKeywords.com and ShowerHeadsEtc.com).
D earned his Bachelors degree from the University of South Carolina.
PK, Co-Founder and Vice President of Operations
For the past two years, P has managed The Kisco Group’s search engine optimization business where he hired, trained and managed nearly 100 employees and a dozen outside firms. During this time, P has honed his management skills with regards to content development, marketing and operations.
P has had a passion for music since childhood and has been a semi-professional drummer for the past 15 years.
P earned his Bachelors of Arts degree, magna cum laude, from Clemson University.
PF, Co-Founder and Vice President of Technology
For the past year, P has managed The Kisco Group’s affiliate marketing business. In addition to setting up and managing widespread marketing campaigns, P has developed sophisticated analytic techniques to precisely analyze web traffic in order to optimize profitability.
Since August 2006, P has shifted his efforts and leveraged his technology skills in developing the Shoutmouth website. P has been instrumental in selecting the Content Management Platform upon which Shoutmouth is built, and finding and managing the technology team.
P earned his Bachelor of Arts degree from Swarthmore College.
AB, Marketing Manager
A’s background in music includes being a singer, songwriter, guitarist and producer. He has also worked on the marketing side of music, having marketed Veritas Records through the development and distribution of promotional materials.
A’s career also includes psychological research and administration, having served as a Research Assistant with the Interpersonal Perception And Communication Laboratory in Cambridge, MA.
A earned his Bachelor of Arts degree in Psychology from Ohio State University.
M, Lead Technology Developer
M is an experienced web programmer with expertise in web design, application development and database development among others.
M’s work experience includes serving as a Senior Developer at Spheres. M has also engaged in multiple, long term freelance projects including serving as a Database Developer Consultant with The Penn Group and a Web Developer Consultant with Volution Media Group and Allied Online Consulting Group.
M earned his Bachelors degree in Computer Science with a minor in Cognitive Science from Rutgers University.
Content Development Team
Shoutmouth’s writing team, managed by PK, includes the following members:
Outsourced Technology Team
Shoutmouth works very closely with 2skies, a technology firm based in Australia with staff in Australia and the United States. 2skies is run by JDN, one of the co-founding developers of XE, the platform upon which Shoutmouth is built.
XE is an extensible, Open Source web application framework written in PHP and licensed under the GNU General Public License. XE delivers the requisite infrastructure and tools to create custom web applications that include fully dynamic multi-platform Content Management Solutions (CMS).
VIII. Appendix: Shoutmouth Financial Projections 3-Year Income Statement
Total Page Views (MILLIONS) | |||
Revenues | $165,431 | $2,461,127 | $7,810,354 |
Staffing | $891,058 | $1,328,078 | $1,522,923 |
Outsourced Technology | $115,000 | $60,000 | $60,000 |
Office Space | $26,400 | $90,000 | $90,000 |
Advertising | $254,000 | $900,000 | $900,000 |
Other Marketing/Public Relations | $72,000 | $120,000 | $150,000 |
Web Hosting | $11,500 | $33,900 | $55,500 |
Other | $38,000 | $60,000 | $60,000 |
$1,407,958 | $2,591,978 | $2,838,423 | |
($1,242,527) | ($130,851) | $4,971,931 | |
Depreciation | $1,600 | $4,200 | $5,800 |
($1,244,127) | ($135,051) | $4,966,131 | |
Income Taxes @ (40%) | ($497,651) | ($54,020) | $1,986,452 |
Income Taxes Paid | $0 | $0 | $1,434,781 |
Income Tax Credit | ($497,651) | ($551,671) | $0 |
($1,244,127) | ($135,051) | $3,531,350 |
3-Year Balance Sheet
As of December 31
Cash | $1,845,206 | $1,614,336 | $4,726,360 |
Accounts Receivable (30 days) | $13,597 | $202,284 | $641,947 |
Inventory | $0 | $0 | $0 |
Current Assets | $1,858,803 | $1,816,620 | $5,368,307 |
Other Assets | |||
Equipment (Computer systems, office equipment, etc.) | $16,000 | $26,000 | $32,000 |
Accumulated Depreciation | ($1,600) | ($5,800) | ($11,600) |
Total Long-Term Assets | $14,400 | $20,200 | $20,400 |
$1,873,203 | $1,836,820 | $5,388,707 | |
Accounts Payable (30 days) | $117,330 | $215,998 | $236,535 |
Total Current Liabilities | $117,330 | $215,998 | $236,535 |
Long Term Debt | $0 | $0 | $0 |
Paid In Capital | $3,000,000 | $3,000,000 | $3,000,000 |
Retained Earnings | ($1,244,127) | ($1,379,178) | $2,152,172 |
Total Equity | $1,755,873 | $1,620,822 | $5,152,172 |
$1,873,203 | $1,836,820 | $5,388,707 |
3-Year Cash Flow Statement
Net Income/Loss | ($1,244,127) | ($135,051) | $3,531,350 |
Depreciation | $1,600 | $4,200 | $5,800 |
Minus Increase in Accounts Receivable | ($13,597) | ($188,687) | ($439,663) |
Plus Change in Current Liabilities | $117,330 | $98,668 | $20,537 |
Net Cash Flow from Operating | ($1,138,794) | ($220,870) | $3,118,024 |
Purchases of Property & Equipment | ($16,000) | ($10,000) | ($6,000) |
Net Cash Flow from Investing | ($16,000) | ($10,000) | ($6,000) |
Cash Received from Investors | $3,000,000 | $0 | $0 |
Net Cash Flow from Financing | $3,000,000 | $0 | $0 |
$1,845,206 | ($230,870) | $3,112,024 | |
$1,845,206 | $1,614,336 | $4,726,360 |
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12 min. read
Updated April 10, 2024
When starting a business, having a well-thought-out business plan prepared is necessary for success . It helps guide your strategy and prepares you to overcome the obstacles and risks associated with entrepreneurship. In short, a business plan makes you more likely to succeed.
However, like everything in business, starting is often the hardest part. What information do you need? How in-depth should each section be? How should the plan be structured?
All good questions that you can answer by following this business plan outline.
A business plan outline is similar to most business plan templates . It lists the common sections that all business plans should include.
A traditional business plan typically includes an executive summary, an overview of your products and services, thorough market research, a competitive analysis, a marketing and sales strategy, operational and company details, financial projections, and an appendix.
Starting with a business plan outline helps ensure that you’re including all of the necessary information for a complete business plan.
But, depending on what you intend to do with your plan, you may not need all of this information right away. If you’re going to speak with investors or pursue funding, then yes, you’ll need to include everything from this outline.
But, if you’re using your plan to test an idea or help run your business, you may want to opt for a one-page plan . This is a simpler and faster method that is designed to be updated and used day-to-day.
If you’re unsure of which plan is right for you, check out our guide explaining the differences and use cases for each plan type .
No matter the type of business plan you create, these are the ten basic sections you should include. Be sure to download your free business plan template to start drafting your own plan as you work through this outline.
While it may appear first, it’s best to write your executive summary last. It’s a brief section that highlights the high-level points you’ve made elsewhere in your business plan.
Summarize the problem you are solving for customers, your solution, the target market, your team that’s building the business, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company.
Keep in mind, this is the first impression your plan and business will make. After looking over your executive summary, your reader is either going to throw your business plan away or keep reading. So make sure you spend the time to get it just right.
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Start the products and services section of your business plan by describing the problem you are solving for your customer. Next, describe how you solve that problem with your product or service.
If you’ve already made some headway selling your solution, detail that progress here—this is called “traction”. You can also describe any intellectual property or patents that you have if that’s an important part of your business.
You need to know your target market —the types of customers you are looking for—and how it’s changing.
Use the market analysis section of your business plan to discuss the size of your market—how many potential customers exist for your business—and if your potential customers can be segmented into different groups, such as age groups or some other demographic.
Describe your competition in this section. If you don’t have any direct competitors, describe what your customers currently do to solve the problem that your product fixes.
If you have direct competition, detail what your strengths and weaknesses are in comparison, and how you’ll differentiate from what is already available.
Use this business plan section to outline your marketing and sales plan —how you’ll reach your target customers and what the process will be for selling to them.
You’ll want to cover your market position, marketing activities, sales channels, and your pricing strategy. This will likely evolve over time, but it’s best to include anything that clearly details how you will sell and promote your products and services.
What’s included in the operations section really depends on the type of business you are planning for. If your business has a physical location or other facilities, you’ll want to describe them here. If your business relies heavily on technology or specific equipment or tools, you should describe that technology or equipment here.
You can also use this section to describe your supply chain if that’s an important aspect of your business.
In a business, milestones are important goals that you are setting for your business. They may be important launch dates, or a timeline of when you’ll get regulatory approval—if that’s something you need for your business. Use this section of your plan to describe those milestones and the roadmap you are planning to follow.
You can also describe important metrics for your business, such as the number of sales leads you expect to get each month or the percentage of leads that will become customers.
The company and team section of your plan is an overview of who you are.
It should describe the organization of your business, and the key members of the management team. It should also provide any historical background about your business. For example, you’ll describe when your company was founded, who the owners are, what state your company is registered in and where you do business, and when/if your company was incorporated.
Be sure to include summaries of your key team members’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. You should also include any professional gaps you intend to fill with new employees.
Your financial plan should include a sales forecast, profit and loss, cash flow projections, and balance sheet, along with a brief description of the assumptions you’re making with your projections.
If you are raising money or taking out loans, you should highlight the money you need to launch the business. This part should also include a use of funds report—basically an overview of how the funding will be used in business operations.
And while it’s not required, it may be wise to briefly mention your exit strategy . This doesn’t need to be overly detailed, just a general idea of how you may eventually want to exit your business.
The end of your business plan should include any additional information to back up specific elements of your plan. More detailed financial statements, resumes for your management team, patent documentation, credit histories, marketing examples, etc.
If you’re looking for greater insight into what goes into specific planning sections, check out the following outline for a business plan. It can help you develop a detailed business plan or provide guidance as to what may be missing from your current plan.
Keep in mind that every business plan will look a bit different because every business is unique. After all, business planning is to help you be more successful, so focus on the sections that are most beneficial to your business and skip the sections that aren’t useful or don’t apply.
To help, we’ve marked sections that are truly optional with an *.
Company purpose / mission statement.
A very brief description of what your business does and/or what its mission is.
A summary of the problem you are solving and an identifiable need in the market you are filling.
A description of the product or service you will provide to solve the problem.
A defined customer base who will most likely purchase the product or service.
Briefly describe who is behind the business.
A short overview of revenue goals and profitability timeline.
If you’ve already started selling your product or service, highlight important initial details here.
If you are raising money for your business, describe how much capital you need.
Problem worth solving.
A thorough description of the problem or pain points you intend to solve for your customer base.
A thorough description of your proposed product or service that alleviates the problem for your customer base.
Describe any initial evidence that your customers are excited to spend money on your solution. Initial sales or signed contracts are good signs.
If this is important for your business, outline it here.
If government approval is required for your business, explain the details and timeline.
What products and services might you offer in the future once your initial products and services are successful?
How many potential customers do you have and what potential groups of customers are separated by specific characteristics?
How consumers in your target market tend to act including purchasing habits, financial trends, and any other relevant factors.
The perceived potential increase or decrease in the size of your target market.
If your industry is changing or adjusting over time, describe those changes.
If your business relies on certain important customers, describe who they are here.
A snapshot of the potential market based on the last few sections and how your business strategy works within it.
Current alternatives.
A list of potential competitors. Identifying the competition isn’t always obvious and it may take some digging on your part.
The strategic advantage(s) that makes your target market more likely to choose you over the competition.
If there’s anything that makes it more difficult for other people to start competing with you, describe those barriers.
Market positioning.
Where do your products or services fit into the market? Are you the low-price leader or the premium option?
What’s special about your offering that makes your customers want to choose it over the competition.
An outline of your marketing and advertising strategy including costs, advertising channels, and goals.
How do you sell your product or service? Self-serve or with a team of sales representatives?
Describe your pricing and how it compares to alternatives in the market.
Describe how your product gets in front of customers. Are you selling in stores and online? Which retailers?
Strengths, weaknesses, opportunities, and threats.
If you have a physical presence, describe where and what it is.
What technology is crucial for your business success?
If special equipment or tools are needed for your business, describe them here.
If you purchase your products or parts for your products from somewhere else, describe that sourcing and supply chain.
If you have key partners that you work with to make your business a success, describe who they are and what services or products they provide.
A detailed roadmap of specific goals and objectives you plan to achieve will help you manage and steer your business.
Performance measurements that help you gauge the overall performance and health of your business.
Organizational structure.
An overview of the legal structure of your business.
A summary of your company’s history and how it relates to planning your business.
The team that is starting or running your business and why they are uniquely qualified to make the business a success.
Key positions that your business will need to fill to make it successful.
Projected profit and loss.
How much money you will bring in by selling products and/or services and how much profit you will make or lose after accounting for costs and expenses.
How and when cash moves in and out of your business. This also includes your overall cash position.
Expected balances for business assets, liabilities, and equity.
If you are raising money either through loans or investment, explain how funds will be used. This is typically meant to be shared with investors or lenders.
A brief explanation of how you intend to eventually exit from your business. This could include selling the business, going public, transitioning the business to a family member/employee, etc.
A repository for any additional information, including charts and graphs, to support your business plan.
Business plan outline FAQ
How do you organize your business plan?
There’s no real established order to business plans, aside from keeping the Executive Summary at the top. As long as you have all of the main business plan components, then the order should reflect your goals.
If this is meant solely for your personal use, lay it out as a roadmap with similar sections grouped together for easy reference. If you’re pitching this to potential investors, lead with the stronger sections to emphasize the pitch. Then if you’re unsure of what order makes sense, then just stick to the outline in this article.
Should you include tables and charts in your business plan?
Every business plan should include bar charts and pie charts to illustrate the numbers. It’s a simple way for you, your team, and investors to visualize and digest complex financial information.
Cash flow is the single most important numerical analysis in a business plan, and a standard cash flow statement or table should never be missing. Most standard business plans also include a sales forecast and income statement (also called profit and loss), and a balance sheet.
How long should your business plan be?
There’s no perfect length for a business plan. A traditional business plan can be anywhere from 10 to 50 pages long depending on how much detail you include in each section. However, as we said before unless you intend to pursue funding, you likely don’t need a lengthy business plan at first.
Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.
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The Farm Business Plan Balance Sheet can help gather information for the financial and operational aspects of your plan. Form FSA-2037 is a template that gathers information on your assets and liabilities like farm equipment, vehicles and existing loans. FSA-2037 - Farm Business Plan - Balance Sheet. FSA-2037 Instructions.
A business plan is a roadmap for your small farm. It is both process and product. During the writing of a farm business plan, you'll develop an overall vision and mission for your business. You ...
Your agriculture business plan doesn't need to be hundreds of pages—keep it as short and focused as you can. You'll probably want to include each of these sections: 1. Executive summary. An overview of your agriculture business, with a brief description of your products or services, your legal structure, and a snapshot of your future plans.
Building a Business Plan for Your Farm: Important First Steps is a 20 page farm business planning publication that discusses the initial steps to help you move toward writing a formal business plan. The Center for Agroecology has a Small Farm Business Planning publication that goes over many of the basics in a step by step format.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the farm business industry. Discuss the type of farm business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan.
Cornell Small Farms Program Online Course BF 202: Business Planning. The Cornell Small Farms Program offers 20+ online courses every year on many topics related to the production and business sides of farming. Most are taught by Cornell Cooperative Extension educators. BF 202 is a 6-week course that will guide you through the process of writing ...
Writing a Farm Business Plan Template: 15+ Things Entrepreneurs Should Include. A farm business plan, like any strategic document, should be comprehensive, encompassing all aspects of your operation, be it agricultural (crops) or product-based. Utilize these 15 key sections to shape your farm business plan template.
The Purpose of a Farming Business Plan. The farming business plan is going to define and communicate your farm's mission and goals. It helps provide a clear direction for your operations, resources, and ensures that everyone involved in the business is on the same page. Additionally, a well-crafted business plan is often required when seeking ...
An effective farm business plan should start with an executive summary of what your business plan will include. The rest of the business plan should speak to the goals and objectives, company history, the background of the owners and operators, products and services to be offered, target market, industry analysis, and projections for the first few years of operation.
Marrison suggests taking the following 11 steps to write a whole-farm plan. 1. Take stock of the family. Look at the history of your family and its farm, and identify family values and family goals. "It is valuable for the business to begin the planning process by reflecting on family and farm history," he says.
1. Operational Plan: Map out your vision, your mission, and the strategies you will use to achieve your goals. A clear roadmap will guide your actions and keep you focused on your goals. 2. Business Structure: Identify the legal entity that best suits your needs, whether a corporation, LLC, partnership, or sole proprietorship.
Writing a Farm Business Plan Introduction Writing a business plan for your farm can be an intimidating process to start, but it doesn't have to be overly complicated, depending on the main purpose of the business plan. Simply put, a business plan tells what your farm vision is and how you will make it happen. The goal of this Business Farm ...
Writing a small farming business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan: 1. Executive Summary. An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and ...
Description. This publication shows how to build your own comprehensive business plan, step-by-step. Identify strengths and weaknesses. Choose key performance indicators. Lots of worksheets and examples.
A written business plan is a key tool that sets your farm business up for success. While the necessary components vary from business to business, here are eight sections that most farm business plan templates include: 1. Executive summary. A concise summary of the key points of the business venture and the purpose of the plan.
Give us a call at 888.339.3334 or view our full list of services here. Congratulations! You've made it through each section of how to write your business plan! If you're interested in more coaching on your business plan, check out the resources below or give us a call to connect with a local lender — we're happy to help.
Your banker will want to know that your sales forecasts are realistic and so should you. 5. Human Resources. Personnel management can sometimes be overlooked on a small farm or ranch operation. However, if you want to attract and keep good employees (including relatives) you need to have a plan in place to do it.
Cash at End of Period. $24,463. $29,034. $87,541. Download This Plan. Explore a real-world agriculture farm business plan example and download a free template with this information to start writing your own business plan.
In writing a farm business plan, these steps can assist in constructing the plan: Step 1: Write out the farm mission statement. The mission statement defines the farm business in the context of its primary business function, its products and how it seeks to produce them, its customers, and what unmet customer need it seeks to fill.
To draw up a roadmap. A business plan for a cattle farm helps you define your objectives and set goals for the next 3-5 years, which can be incredibly useful for achieving success in the long run. The writing process of a business plan requires careful consideration of all aspects of running your cattle farm, from financial management to sales ...
Executive Summary. Although it will be the first page of your plan, this will be the last section that you write summing up all of your key points in your plan. Remember that this is the first section that your lender will read, so they'll expect to see all of the highlights that make approving this loan a good financial decision for both you ...
The Farm Business Resilience Program is supporting farmers to build stronger, more productive agricultural businesses. DJPR_13999_0423 After completing your Farm Business Plan, have a go at prioritising your goals using the Action Plan template. The Action Plan template can be accessed on the Farm Business Resilience Program webpage:
This should include proposals , marketing, and budget. Truly, there is no easy business. So, plan long-term, and everything else will follow. 2. Provide an Executive Summary. Next, you have to learn how to write an executive summary for your business plan. Especially for farm business startups, an executive summary is one of the parts of the ...
Here are the steps you need to take: 1. Identify your competitors. The first step in conducting a comprehensive competitive analysis is to identify your competitors. Start by creating a list of both direct and indirect competitors within your industry or market segment. Direct competitors offer similar products or services, while indirect ...
1. Executive Summary. While your executive summary is the first page of your business plan, it's the section you'll write last. That's because it summarizes your entire business plan into a succinct one-pager. Begin with an executive summary that introduces the reader to your business and gives them an overview of what's inside the ...
Our free business plan template includes seven key elements typically found in the traditional business plan format: 1. Executive summary. This is a one-page summary of your whole plan, typically written after the rest of the plan is completed. The description section of your executive summary will also cover your management team, business ...
Here's how to effectively write a strength in a SWOT analysis: Identify Internal Positive Attributes: Focus on internal factors that are within the control of the business. These can include resources, skills, or other advantages relative to competitors. Consider areas like strong brand reputation, proprietary technology, skilled workforce ...
With Growthink's Ultimate Business Plan Template you can finish your plan in just 8 hours or less! Click here to finish your business plan today. Download over 300 free business plan examples to help you write a winning business plan to start and/or grow your business in 2024.
Tips to help you write your business plan. 1. Determine what your plan is for. 2. Prepare your finances. 3. Write your summary last. 4. Get help.
Be sure to download your free business plan template to start drafting your own plan as you work through this outline. 1. Executive summary. While it may appear first, it's best to write your executive summary last. It's a brief section that highlights the high-level points you've made elsewhere in your business plan.