Why your farm background is important to your business plan
A business plan is a crucial document for any company, including farms. It acts as a roadmap that explains who you are, how your farm operates and your finances.
One section, the company background and history, is part of introducing a solid business plan, but farm business owners often overlook it.
Taking time to write out this information may seem less valuable than setting goals or calculating financial data; however, it’s a critical component of the document. That’s because some people reading your plan - such as lenders, investors or strategic partners - may not be familiar with you or your farm business. Don’t discount the deep history of your family’s farm, says Nicholas Clermont of SomaDetect.
“This area adds a lot of credibility to a farm in general,” Clermont says. “Many farms date back multiple generations, and the people know how to run a successful business. It alleviates a level of risk to potential partners as they see you successfully navigate the challenges of operating a farm.”
Why telling your story matters
Count on the reader of your business plan to know nothing about your farm, so it makes sense to explain the origin.
Your farm history can go a long way in illuminating values, character and commitment.
The farm's history, along with your personal experience and qualifications, strengthens the other components of the business plan, including the sales and marketing of your products or services. Clermont encourages owners to include their management capabilities and pertinent training or education. Consider the story of the farm business to be like a resume, and an excellent way to highlight your values, character and commitment to the farm.
This is your opportunity to create that narrative and direct the reader to your motivations and intentions, Clermont adds.
What to include
To begin writing your company background and history, consider these steps.
1. Dig into your roots and provide a brief historical timeline
Where and when was the farm founded? When were major assets acquired? If you’re not the company's founder, indicate when the transition of ownership and management took place.
2. Outline the business ventures that worked out and those that did not
Briefly explain why major farm business decisions were made and what the outcomes were. What are your key achievements? What has changed since you started? Are there key values you wish to retain?
Clermont is a firm advocate for transparency and says that adding such details only strengthens the case for gaining a partner.
“The ones that are very vocal and clear about what they want to achieve and how to do it are the most successful,” Clermont says. “The ones with hidden expectations or agendas are where it becomes difficult. If everyone knows where we are going, then everybody around that farm can give those recommendations to help achieve the goals.”
3. Describe your current business
How does your farm fit within the current market? What are your farm's current major initiatives? What solutions do you provide to your customers? What significant changes could impact the operation?
Clermont explains that talking about these ideas shows a level of market understanding. It demonstrates proactive steps to plan for a successful farm future, while also acknowledging that any good business plan will be adjusted over time.
When creating a business plan, not all questions may be just the right fit for your farm and your situation. Choose the questions that best tell your farm story and answer the ones that draw the picture you want your readers to see, advises Clermont.
Bottom line
Your business plan is where you secure critical partnerships. Don’t overlook the power of injecting history, successes, failures and future goals into the plan to showcase your future-focused mindset.
Looking for more business plan advice and support?
Download FCC’s free business plan bundle, designed for Canadian agriculture. The guide, template and sample plan make starting your business plan easier.
Article by: Trevor Bacque and Rebecca Hannam
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