hay farming business plan

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How to Start a Farm: Plan Your Operation

Think about your operation from the ground up and start planning for your business.  A good farm business plan is your roadmap to start-up, profitability, and growth, and provides the foundation for your conversation with USDA about how our programs can complement your operation. 

Keep reading about planning your business below, get an overview of the beginning farmer's journey , or jump to a different section of the farmer's journey.

On This Page

Why you need a farm business plan.

A comprehensive business plan is an important first step for any size business, no matter how simple or complex. You should create a strong business plan because it:

• Will help you get organized . It will help you to remember all of the details and make sure you are taking all of the necessary steps.
• Will act as your guide . It will help you to think carefully about why you want to farm or ranch and what you want to achieve in the future. Over time, you can look back at your business plan and determine whether you are achieving your goals.
• Is required to get a loan . In order to get an FSA loan, a guarantee on a loan made by a commercial lender, or a land contract, you need to create a detailed business plan . Lenders look closely at business plans to determine if you can afford to repay the loan.

How USDA Can Help

Whether you need a good get-started guide, have a plan that you would like to verify, or have a plan you’re looking to update for your next growth phase, USDA can help connect you to resources to help your decisions.

Your state's beginning farmer and rancher coordinator  can connect you to local resources in your community to help you establish a successful business plan. Reach out to your state's coordinator for one-on-one technical assistance and guidance. They can also connect you with organizations that specifically serve beginning farmers and ranchers.

It is important to know that no single solution fits everyone, and you should research, seek guidance, and make the best decision for your operation according to your own individual priorities.

Build a Farm Business Plan

There are many different styles of business plans. Some are written documents; others may be a set of worksheets that you complete. No matter what format you choose, several key aspects of your operation are important to consider.

Use the guidelines below to draft your business plan. Answering these kinds of questions in detail will help you create and develop your final business plan. Once you have a business plan for your operation, prepare for your visit to a USDA service center. During your visit, we can help you with the necessary steps to register your business and get access to key USDA programs.

Business History

Are you starting a new farm or ranch, or are you already in business? If you are already in business:

• What products do you produce?
• What is the size of your operation?
• What agricultural production and financial management training or experience do you, your family members, or your business partners have?
• How long have you been in business?

Mission, Vision, and Goals

This is your business. Defining your mission, vision and goals is crucial to the success of your business. These questions will help provide a basis for developing other aspects of your business plan.

• What values are important to you and the operation as a whole?
• What short- and long-term goals do you have for your operation?
• How do you plan to start, expand, or change your operation?
• What plans do you have to make your operation efficient or more profitable ?
• What type of farm or ranch model (conventional, sustainable, organic, or alternative agricultural practices) do you plan to use?

Organization and Management

Starting your own business is no small feat. You will need to determine how your business will be structured and organized, and who will manage (or help manage) your business. You will need to be able to convey this to others who are involved as well.

• What is the legal structure of your business? Will it be a sole proprietorship, partnership, corporation, trust, limited liability company, or other type of entity?
• What help will you need in operating and managing your farm or ranch?
• What other resources, such as a mentor or community-based organization , do you plan to use?

Marketing is a valuable tool for businesses. It can help your businesses increase brand awareness, engagement and sales. It is important to narrow down your target audience and think about what you are providing that others cannot.

• What are you going to produce ?
• Who is your target consumer ?
• Is there demand for what you are planning to produce?
• What is the cost of production?
• How much will you sell it for and when do you expect to see profit ?
• How will you get your product to consumers ? What are the transportation costs and requirements?
• How will you market your products?
• Do you know the relevant federal, state, and local food safety regulations? What licensing do you need for your operation?

Today there are many types of land, tools, and resources to choose from. You will need to think about what you currently have and what you will need to obtain to achieve your goals.

• What resources do you have or will you need for your business?
• Do you already have access to farmland ? If not, do you plan to lease, rent, or purchase land?
• What equipment do you need?
• Is the equipment and real estate that you own or rent adequate to conduct your operation? If not, how do you plan to address those needs?
• Will you be implementing any conservation practices to sustain your operation?
• What types of workers will you need to operate the farm?
• What additional resources do you need?

Now that you have an idea of what you are going to provide and what you will need to run your operation you will need to consider the finances of your operation.

• How will you finance the business?
• What are your current assets (property or investments you own) and liabilities (debts, loans, or payments you owe)?
• Will the income you generate be sufficient to pay your operating expenses, living expenses, and loan payments?
• What other sources of income are available to supplement your business income?
• What business expenses will you incur?
• What family living expenses do you pay?
• What are some potential risks or challenges you foresee for your operation? How will you manage those risks?
• How will you measure the success of your business?

Farm Business Plan Worksheets

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

Planning for Conservation and Risk Management

Another key tool is a conservation plan, which determines how you want to improve the health of your land. A conservation plan can help you lay out your plan to address resource needs, costs and schedules.

USDA’s Natural Resources Conservation Service (NRCS) staff are available at your local USDA Service Center to help you develop a conservation plan for your land based on your goals. NRCS staff can also help you explore conservation programs and initiatives, such as the Environmental Quality Incentives Program (EQIP) .

Conservation in Agriculture

Crop insurance, whole farm revenue protection and other resources can help you prepare for unforeseen challenges like natural disasters.

Disaster Recovery

Special Considerations

Special considerations for businesses.

There are different types of farm businesses each with their own unique considerations. Determine what applies to your operation.

• Organic Farming  has unique considerations. Learn about organic agriculture , organic certification , and the  Organic Certification Cost Share Program  to see if an organic business is an option for you. NRCS also has resources for organic producers and offers assistance to develop a conservation plan.
• Urban Farming  has special opportunities and restrictions. Learn how USDA can help farmers in urban spaces .
• Value-Added Products . The Agricultural Marketing Resource Center (AgMRC) is a national virtual resource center for value-added agricultural groups.
• Cooperative.  If you are interested in starting a cooperative, USDA’s Rural Development Agency (RD) has helpful resources to help you begin . State-based  Cooperative Development Centers , partially funded by RD, provide technical assistance and education on starting a cooperative.

Special Considerations for Individuals

Historically Underserved Farmers and Ranchers: We offer help for the unique concerns of producers who meet the USDA definition of "historically underserved,"  which includes farmers who are:

• socially disadvantaged
• limited resource
• military veterans

Women: Learn about specific incentives, priorities, and set asides for  women in agriculture within USDA programs.

Heirs' Property Landowners: If you inherited land without a clear title or documented legal ownership, learn how USDA can help Heirs’ Property Landowners gain access to a variety of programs and services

Business Planning

Creating a good business plan takes time and effort. The following are some key resources for planning your business.

• Farm Answers from the University of Minnesota features a library of how-to resources and guidance, a directory of beginning farmer training programs, and other sources of information in agriculture. The library includes business planning guides such as a Guide to Developing a Business Plan for Farms and Rural Businesses and an Example Business Plan .
• The Small Business Administration (SBA) offers information about starting, managing, and transitioning a business.

SCORE is a nonprofit organization with a network of volunteers who have experience in running and managing businesses. The Score Mentorship Program partners with USDA to provide:

• Free, local support and resources, including business planning help, financial guidance, growth strategies.
• Mentorship through one-on-one business coaching -- in-person, online, and by phone.
• Training from subject matter experts with agribusiness experience.
• Online resources and step-by-step outlines for business strategies.
• Learn more about the program through the Score FAQ .

Training Opportunities

Attend field days, workshops, courses, or formal education programs to build necessary skills to ensure you can successfully produce your selected farm products and/or services. Many local and regional agricultural organizations, including USDA and Cooperative Extension, offer training to beginning farmers.

• Cooperative Extension  offices address common issues faced by agricultural producers, and conduct workshops and educational events for the agricultural community.
• extension.org  is an online community for the Cooperative Extension program where you can find publications and ask experts for advice.

Now that you have a basic plan for your farm operation, prepare for your visit to a USDA service center.

2. Visit Your USDA Service Center

How to Start a Farm with USDA

Get an  overview of the beginning farmer's journey  or jump to a specific page below.

Find Your Local Service Center

USDA Service Centers are locations where you can connect with Farm Service Agency, Natural Resources Conservation Service, or Rural Development employees for your business needs. Enter your state and county below to find your local service center and agency offices. If this locator does not work in your browser, please visit offices.usda.gov.

Learn more about our Urban Service Centers . Visit the Risk Management Agency website to find a regional or compliance office  or to find an insurance agent near you.

Small Business Trends

How to start a hay farm.

Table of Contents

What is a Hay Farm?

A hay farm is a type of agricultural operation that focuses primarily on the growing and harvesting of hay. Hay is a type of grass or legume that is cut and dried for use as animal feed. It is typically grown in large fields and harvested using specialized equipment, such as hay balers and mowers. Hay farms can be found all over the world, from small family-run operations to large commercial enterprises.

How to Start a Hay Farm: 12 Practical Steps

1: research and plan, 2: selecting the right hay varieties, 3: securing suitable land, 4: understanding soil health and fertility, 5: preparing the land, 6: planting the hay, 7: irrigation and water management, 8: pest and disease management, 9: harvest timing and techniques, 10: post-harvest handling and storage, 11: marketing and selling your hay, 12: evaluating and adjusting your practices, the business side: simple steps to start a hay farm business, 1. name and brand your hay farm business.

Choosing a name and brand for your hay farm business is an important step. The name should be easy to remember, and it should accurately represent your business. You should also consider trademark and domain availability before finalizing your decision. Your brand should reflect your target audience and the values of your business.

2. Form a Legal Entity and Register Your Hay Business

3. sort out taxes, licenses, permits, and insurance, 4. create a hay farm business plan.

Creating a business plan is essential for any successful hay farm business. It defines your business objectives, target market, marketing strategies, and financial projections. Your business plan should also identify potential challenges and solutions, and include a clear roadmap for the future growth of your business.

5. Market Research

6. buy the necessary equipment for baling hay, 7. open a business bank account, 8. market the business.

Developing a comprehensive marketing strategy is crucial to the success of your hay farm business. This should include a mix of online and offline tactics to reach and engage with your target audience. You can use social media, email marketing, content marketing, and advertising to increase brand awareness and drive sales.

9. Choose Where to Sell Your Products

10. expand your hay farm business, what is needed to start a hay farm and how much does it cost, the hay farm industry in the united states.

The hay farming industry in the United States is a significant sector of the agriculture industry. Hay is an essential feed source for livestock, making it a crucial element for the country’s meat and dairy production.

Deciding What Type of Hay Farm to Run

Choosing the right type of hay to grow on your hay farm is essential to your farm’s overall success. By considering your livestock’s nutritional needs, soil type and climate, market demand, and cost and labor, you can make an informed decision that will benefit both your farm and your livestock.

Common Plants to Grow for Hay Production

Growing hay for diy on a family farm or growing hay to sell, how to source equipment to grow hay and for harvesting hay, the steps in making a hay crop, preparing the soil.

Soil preparation is vital to ensure the hay crop’s success. This involves tilling the soil to create a smooth seedbed, adding fertilizers and lime to correct soil pH, and removing any weeds or debris.

Planting and Growing

Raking is the process of gathering the hay into rows to facilitate drying and baling. Farmers use specialized machinery, such as a rake or tedder, to move and shape the hay into neat rows.

Stacking and Baling in Round Bales or Square Bales

Hay Farm: Downsides to Consider

Hay farming: a sustainable business venture.

It requires dedication to soil health, crop management, and market understanding, but the rewards can be plentiful for those willing to invest the time and resources.

Hay Farm FAQs

What is the difference between hay and straw, how hard is hay farming, can a hay farm be profitable.

Yes, a well-managed hay farm can be profitable. Factors such as crop yield, market demand, and operational efficiency can impact profitability.

Is Hay Easy to Grow?

How much hay can 1 acre produce a year, is it worth it to grow hay, how should hay bales be stacked to reduce waste.

Hay bales should be stacked on a well-drained surface, preferably with a moisture barrier, and kept out of direct sunlight to prevent spoilage. Stacking bales in a crisscross pattern can also help reduce waste.

Are Round Bales or Square Bales Better for Hay?

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How to start a hay farming business.

If you own land well-suited for hay production , consider one main obstacle removed. However, purchasing hay-growing equipment -- at a minimum you'll need a tractor, mower, hay rake and baler -- is costly and will likely prevent you from earning a profit your first year or two in business. A hay business depends on two things: cooperative weather and a reliable customer base. You can get by with fewer acres in a climate that grants you several cuttings per year , and an eager customer base guarantees fast-paced sales that can reduce or even eliminate your storage requirements.

Hay is grown in all 50 states, although the type of grass varies by geographical region.

New or Used Equipment

You can easily spend $100,000 on the the newest and greatest machinery. Shiny, new farm equipment has advantages, such as fewer breakdowns and factory or dealer warranties. However, any profit you make for the first few years, depending on your acreage and yield, goes directly to the cost of this equipment, so the more you spend the longer it will take to recoup that cost.

A more affordable option is purchasing used equipment. Social media and online sales sites, such as Craigslist, are resources for finding used farm equipment. Look out for farm equipment auctions in your area. Purchasing used equipment can save you 50 percent or more on upfront capital start-up costs.

Hay can be baled in small, rectangular bales, or large round rolls. Each type requires different baling equipment.

You can rent the equipment, but ongoing rental costs reduce your profits each cutting -- the time when your hay is ready to harvest -- rather than those costs eventually being paid off over time.

Renting the equipment your first year only is a viable option until you establish a reliable customer base. Hiring someone to do the seeding can save you from purchasing seeding equipment, because hay fields only need to be seeded every few years.

It's All About the Land

Your land may not be your biggest cost, but it is a requisite. You can circumvent a land purchase by finding hay acreage to rent, but this will also cut into your profits as a recurring cost rather than a one-time expense. Land sale prices vary widely by region ; a Texas hay entrepreneur may spend twice as much per acre than his North Dakotan counterpart, but think in the thousands, rather than hundreds, of dollars per acre, regardless of where you are.

Price per acre is typically lower the more acreage you purchase.

You don't need hundreds of acres to start out. In fact, with today's equipment designed for small, hobby farms, you can grow and harvest on less than 10 acres. But, depending on your growing season, you'll likely have to charge more per bale than a competitor farming 10 times that size. And your production will be lower, which limits your customer base.

Assess your available customer base to determine how much land to buy. If you know demand is high, and you're a reasonable distance from farm feed stores, horse owners or horse boarding facilities, you have plenty of selling options. Query a feed store owner or horse boarding operator about monthly usage, then calculate the required minimum acreage to meet that based on average yields in your area.

Per Acreage Yield

According to Roger Johnson, president of the National Farmer's Union and a third-generation North Dakota farmer, hay yield is calculated in tons, as individual bale weights can vary. Your yield depends on the type of grass used, as well as soil and weather conditions. Typically, though, expect between one and two tons per acre per cutting . Typical square bales weigh from 50 to 100 pounds, while round bales easily weigh in at 1,000 pounds and up; you're not likely to get more than 50 smaller square bales per acre, and only one to two round bales.

You can sell to feed stores or large-scale customers by the ton, which can minimize concerns about variations in individual bale weights.

Seasonal Cuttings

One thing to consider when determining how much land to purchase is your climate: A hay producer in the North is likely to get only two cuttings per year, while one in the South may get three or four easily -- sometimes more. Thus, the Ohio hay producer on 50 acres may only yield two to four tons per year, while the Texas farmer gets twice that.

Other Expenses

One advantage to hay farming is that you may only need to seed your land every two to five years, so consider seed an occasional cost of at least $100 per acre. What you do need to do to ensure consistent quality, is fertilize your hay crop . You also need to factor in the minimal fuel costs for cutting and baling. While all of these costs are affected by external factors and geographical regions, make preliminary estimates of at least $200 to $300 per acre for fuel and fertilizer.

Calculating Your Profit

How much profit you can expect per bale is dependent on several factors, from where you operate, to the weather in a given year. Before going into business, survey growers in your area to gauge their wholesale prices to retail or individual customers. This price may also vary depending on whether the hay is delivered. For example, in 2015 in Central Texas, hay growers may sell square bales to individual customers for $6.50 per bale if the customers pick it out of the field, $7.50 after the hay producer has loaded it and stored it in a barn, and $8.50 or more if delivered. So, using an example of 50 acres with two cuttings per year, yielding 50 bales per acre equals 5,000 bales total. Your fertilizer and fuel are $300 per acre, or $15,000, which is $3.00 per bale. Not including any of your capital equipment purchases or other upfront costs, such as seed that year, anything above $3.00 per bale is your profit, and you can set your sales price above that according to what your particular market will bear.

Things That Go Wrong

Timing is everything in any type of farming; one thing you'll get used to is worrying about the weather. Too much rain, rain at the wrong time and drought are your enemies. An even bigger issue, according to Johnson, is rainfall after cutting but before baling. "The hay loses quality, color and weight, and chances of mold increase if it's wet for too long or if the climate is warm and humid," said Johnson. Pests and weeds are also a concern, so some years may include additional costs for pesticides and weedkiller.

Mold and mold spores are extremely toxic to horses.

You need a storage building for your bales to keep them dry if they are not purchased directly from the field, or if you don't deliver them to customers immediately after baling them.

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• Making Your Own Hay

Based in Central Texas, Karen S. Johnson is a marketing professional with more than 30 years' experience and specializes in business and equestrian topics. Her articles have appeared in several trade and business publications such as the Houston Chronicle. Johnson also co-authored a series of communications publications for the U.S. Agency for International Development. She holds a Bachelor of Science in speech from UT-Austin.

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How to Create a Comprehensive Hay Farm Business Plan

Introduction.

Welcome to the Hay Farm Business Plan! This plan outlines the steps necessary to start and operate a successful hay farm. We will discuss the necessary resources, equipment, and personnel needed to get the business up and running. We will also discuss the financial aspects of the business, including budgeting, pricing, and marketing. Finally , we will discuss the potential risks and rewards associated with running a hay farm. With the right planning and execution, a hay farm can be a profitable and rewarding business venture.

Creating a comprehensive hay farm business plan is essential for any entrepreneur looking to start a hay farm. A business plan is a document that outlines the goals, strategies, and financial projections of a business. It serves as a roadmap for the business and helps to ensure that all stakeholders are on the same page.

The first step in creating a comprehensive hay farm business plan is to conduct market research. This research should include an analysis of the current hay market, the competition, and potential customers. This research will help you to identify potential opportunities and threats in the market and will provide you with the information you need to create a successful business plan.

The next step is to create a business model. This model should include a description of the business, the products and services offered, the target market, and the pricing structure. It should also include a financial plan that outlines the expected costs and revenues associated with the business.

Once the business model is complete, the next step is to create a marketing plan. This plan should include a description of the marketing strategies that will be used to promote the business, as well as a budget for advertising and other promotional activities.

Finally , the last step is to create a financial plan. This plan should include a detailed budget for the business, as well as projections for future income and expenses. It should also include a plan for financing the business, such as loans or investments.

Creating a comprehensive hay farm business plan is an important step in starting a successful hay farm. By conducting market research, creating a business model, and creating a marketing and financial plan, entrepreneurs can ensure that their business is well-prepared for success.

The Benefits of Investing in a Hay Farm Business

Investing in a hay farm business can be a lucrative and rewarding venture. Hay farming is a profitable agricultural business that can provide a steady income for years to come. There are many benefits to investing in a hay farm business, including the potential for long-term financial stability, the ability to diversify your portfolio, and the potential to create a sustainable business model.

One of the primary benefits of investing in a hay farm business is the potential for long-term financial stability. Hay farming is a relatively low-risk venture, as hay is a commodity that is in high demand and is relatively easy to produce. Hay is also a renewable resource, meaning that it can be harvested and replanted year after year. This makes hay farming a reliable source of income that can provide a steady stream of revenue for years to come.

Another benefit of investing in a hay farm business is the ability to diversify your portfolio. Hay farming can be a great way to diversify your investments, as it is a relatively low-risk venture that can provide a steady income. Additionally, hay farming can be a great way to diversify your portfolio by providing a source of income that is not dependent on the stock market or other volatile investments.

Finally , investing in a hay farm business can provide the potential to create a sustainable business model. Hay farming is an environmentally friendly business that can provide a steady income while also helping to preserve the environment. By investing in a hay farm business, you can help to ensure that the land is managed responsibly and that the hay is harvested in a sustainable manner. This can help to ensure that the business is profitable for years to come.

In conclusion , investing in a hay farm business can be a great way to diversify your portfolio and create a sustainable business model. Hay farming is a low-risk venture that can provide a steady income for years to come. Additionally, hay farming can help to preserve the environment and create a sustainable business model. For these reasons, investing in a hay farm business can be a great way to ensure long-term financial stability and create a sustainable business model.

Strategies for Maximizing Profits in a Hay Farm Business

1. Utilize Technology : Utilize the latest technology to maximize efficiency and reduce costs. Invest in modern equipment and software to streamline processes, such as automated hay balers and hay tracking software.

2. Diversify Products : Offer a variety of hay products to meet the needs of different customers. Consider selling hay cubes, pellets, and other hay-based products.

3. Develop a Marketing Strategy : Develop a comprehensive marketing strategy to reach potential customers. Utilize digital marketing tactics, such as social media, email campaigns, and search engine optimization.

4. Establish Relationships : Establish relationships with local feed stores, horse owners, and other potential customers. Offer discounts and incentives to encourage repeat business.

5. Utilize Seasonal Opportunities : Take advantage of seasonal opportunities to maximize profits. For example , offer hay delivery services during the winter months when demand is high.

6. Invest in Quality : Invest in high-quality hay to ensure customer satisfaction. Invest in hay testing equipment to ensure the quality of your product.

7. Utilize Networking Opportunities : Utilize networking opportunities to build relationships with other hay farmers and potential customers. Attend local agricultural events and join industry associations to stay up-to-date on the latest trends.

8. Invest in Education : Invest in education to stay ahead of the competition. Attend seminars and workshops to learn the latest techniques and strategies for running a successful hay farm business.

Understanding the Financial Implications of a Hay Farm Business

The financial implications of a hay farm business are significant and should be carefully considered before investing in such an endeavor. A hay farm business requires a substantial initial investment in land, equipment, and labor, and the costs associated with running the business can be considerable.

The cost of land is the most significant expense associated with a hay farm business. Depending on the size and location of the farm, the cost of land can range from a few thousand dollars to hundreds of thousands of dollars. Additionally, the cost of equipment such as tractors, balers, and other machinery can be significant. Labor costs, including wages for employees, must also be taken into account.

In addition to the initial costs associated with starting a hay farm business, there are ongoing costs that must be considered. These include the cost of fertilizer, seed, and other inputs, as well as the cost of fuel and maintenance for the equipment. Additionally, the cost of marketing and advertising must be taken into account.

The potential for profit in a hay farm business is dependent on a variety of factors, including the quality of the hay produced, the price of hay in the local market, and the efficiency of the operation. It is important to carefully consider these factors before investing in a hay farm business.

In conclusion , the financial implications of a hay farm business are significant and should be carefully considered before investing. The initial costs associated with starting a hay farm business can be substantial, and there are ongoing costs that must be taken into account. Additionally, the potential for profit is dependent on a variety of factors. By carefully considering these factors, investors can make an informed decision about whether or not to invest in a hay farm business.

The Role of Technology in a Hay Farm Business Plan

Technology plays an important role in the success of a hay farm business plan. Technology can help to streamline operations, increase efficiency, and reduce costs.

For example , the use of GPS technology can help to track the location of hay bales, allowing for more efficient harvesting and delivery. Automated irrigation systems can help to reduce water usage and improve crop yields. Automated harvesting equipment can help to reduce labor costs and increase efficiency.

Technology can also be used to improve the quality of hay. For example , hay can be tested for nutritional content and moisture levels using specialized equipment. This can help to ensure that the hay is of the highest quality and meets the needs of customers.

Finally , technology can be used to improve the marketing and sales of hay. For example , a hay farm business plan can include the use of social media and other digital marketing strategies to reach potential customers. This can help to increase sales and improve customer satisfaction.

In conclusion , technology can play an important role in the success of a hay farm business plan. By utilizing technology, hay farms can increase efficiency, reduce costs, and improve the quality of their product. Additionally, technology can be used to improve marketing and sales efforts, helping to increase profits.

Tips for Developing a Sustainable Hay Farm Business Model

1. Establish a clear business plan : Develop a comprehensive business plan that outlines your goals, objectives, and strategies for running a successful hay farm. Consider factors such as the size of your farm, the type of hay you will produce, the markets you will target, and the resources you will need to succeed.

2. Invest in quality equipment : Invest in quality equipment that will help you produce high-quality hay. Consider purchasing hay balers, mowers, and other necessary equipment to ensure that your hay is of the highest quality.

3. Utilize sustainable practices : Implement sustainable practices on your farm to ensure that your hay is produced in an environmentally friendly manner. Consider using organic fertilizers, crop rotation, and other sustainable practices to reduce your environmental impact.

4. Develop a marketing strategy : Develop a marketing strategy to ensure that your hay is reaching the right markets. Consider utilizing digital marketing strategies such as social media and email campaigns to reach potential customers.

5. Establish relationships with local buyers : Establish relationships with local buyers to ensure that your hay is reaching the right markets. Consider attending local farmers markets and other events to meet potential buyers and build relationships.

6. Utilize technology : Utilize technology to streamline your operations and increase efficiency. Consider investing in software and other tools to help you manage your farm more effectively.

7. Monitor your finances : Monitor your finances closely to ensure that your business is profitable. Consider utilizing accounting software to track your income and expenses and ensure that your business is running efficiently.

• Building a Hay Business: Learn By Example
• Business Ideas for Hay Baling
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Individuals living on farms or in rural areas may find that hay baling offers the chance to make a small profit. There is a demand for hay on farms and other producers of livestock. Uses of hay include bedding, gardening and as a food for barnyard animals. A farm or access to a pasture are prerequisites to starting a hay-baling business.

Considerations

In the hay-baling business, revenue creation comes from collecting hay at the end of the harvest. The collection of hay involves using a mower or tractor with an attachment to cut the hay. Drying the hay is an arduous project. The next step is gathering the hay with a baler and storing it. The baler machinery is adjustable to accommodate a variety of bale sizes. After the baling, hay is stored for further drying and curing.

Starting a Hay Baling Company

Baling hay carries the potential for producing a profit. The first step is to determine who your customers will be and design a marketing plan to target those individuals. For hay baling, farmers would be the natural target audience. A marketing pitch may center on promoting services to farmers in order to help them save time by using your hay-baling services. Another marketing niche might center on small farmers who may not have access to hay-baling equipment. In order to increase earning potential, hay-baling businesses might also branch out into selling hay as well.

Resources Needed

A hay-baling business requires certain tools in addition to the farmland. A tractor is one of the larger and more costly purchases that you will encounter. A hay-baling business also requires a seeder and mower. In order to harvest the hay, you will need a rake specially made for hay, twine to bind the hay and racks to store the hay. Another requirement is a hay baler and a bale spear. While not necessarily a requirement, an accounting software package is a wise investment to help you run your business.

Before setting up shop, it is best to do market research in your area to determine the need for hay. Many farmers produce their own hay and may not be willing to purchase something they already own. Also, determine your customer early. If you are marketing the hay for bedding purposes only, then how and when you harvest the hay does not play as significant a role as it does when used for feed purposes. When harvesting the hay, timing is critical. If harvested too early, the hay does not dry properly, and if picked too late, it may have quality issues. This means the timing of the promotions for your business are equally critical.

• Startup Biz Hub: How to Start a Hay Farming Business
• MasterPlans: Small Business Plans for Custom Hay Baling

Adele Burney started her writing career in 2009 when she was a featured writer in "Membership Matters," the magazine for Junior League. She is a finance manager who brings more than 10 years of accounting and finance experience to her online articles. Burney has a degree in organizational communications and a Master of Business Administration from Rollins College.

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Hay Farming Business Plan Template

Explore Options to Get a Business Plan.

Are you interested in starting your own Hay Farming Business?

Introduction

Global market size, target market, business model, competitive landscape, legal and regulatory requirements, financing options, marketing and sales strategies, operations and logistics, human resources & management, why write a business plan.

• Business Plans can help to articulate and flesh out the business’s goals and objectives. This can be beneficial not only for the business owner, but also for potential investors or partners
• Business Plans can serve as a roadmap for the business, helping to keep it on track and on target. This is especially important for businesses that are growing and evolving, as it can be easy to get sidetracked without a clear plan in place.
• Business plans can be a valuable tool for communicating the business’s vision to employees, customers, and other key stakeholders.
• Business plans are one of the most affordable and straightforward ways of ensuring your business is successful.
• Business plans allow you to understand your competition better to critically analyze your unique business proposition and differentiate yourself from the market.
• Business Plans allow you to better understand your customer. Conducting a customer analysis is essential to create better products and services and market more effectively.

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• Hay and Forage

Launching a Custom-Hay Business

Brothers launched a custom haying business to pay for college.

Bryan and Zach Otott were just 14 and 12 years old when, for some reason, they got the idea they should have a business of their own. There was, of course, no shortage of work on their farm near Washington, Kansas, owned by parents Jeff and Nancy Otott.

Maybe it was something telling them to get an early start at saving for college. Or, maybe it was simply lessons learned while working alongside their family in the growing of 800 acres of crops and the raising of 300 cow-calf pairs.

Long story short: The Otott brothers run Otott Custom Haying. Each summer, they put up some 2,000 big round bales of hay and straw for customers as far as 15 miles from their home farm. They've been at the business for five years.

The money they earn gets added to income from the cattle they own. Most money then gets put away for college.

The funds are already hard at work for Bryan, who is an ag economics student at Kansas State University. Zach plans to head off to K-State, too, majoring in Agribusiness.

Starting the Business

Settling on the idea of custom haymaking as a business enterprise took some brainstorming. Two sound principles guided their eventual choice of business: They searched for a niche that would meet an unfulfilled need and for work that suited their skills.

"At the start, we tried to think what it was that people didn't like to do," Zach says. "So we started out by cutting down trees and cleaning up pastures by ripping out volunteer trees with our parents' skid loader."

They also began to realize that many people didn't have the equipment for harvesting hay, or that they didn't like the work of putting up hay. "From working on our family farm, we knew how to put up hay," says Zach.

So they turned their focus to haymaking. Equipment was available to them by borrowing it either from their parents or from their uncle. Bryan had, at times, run the baler for his uncle during previous haying seasons.

To get their first customers, they made a few phone calls and hung flyers in local businesses.

Soon, they began getting requests to put up hay, and word-of-mouth then carried the advertising.

"We keep getting more and more customers, and our business just keeps on growing," says Bryan.

Calling the Shots

After getting their first orders for haying, their father bought them a tractor and round baler, purchases which they've been repaying. They use their father's swather for cutting the hay and repay him with an exchange of farm labor.

The brothers take responsibility for servicing and repairing the machinery.

"We charge our customers a per-bale fee for baling," says Bryan. "The bales are net-wrapped and are about 66 inches in diameter. For swathing, we charge by the hour because of the large amount of waterways we swath. These, along with the differing stands of hay we cut, cause slower travel and more time put into that job."

Young as they are, the brothers call all the shots in their business. They take their customers' orders and lay out the schedule for a haying season that runs from May through August.

Some customers, like dairy producers, have time-sensitive alfalfa to put up, starting in May. With Bryan at college in late spring, Zach juggles haying with high school.

Monitoring moisture conditions in alfalfa fields leaves little time for leisurely activities, but Zach doesn't mind. "My dad always told me, 'If you're sitting in a tractor seat, you're staying out of trouble,' " he says.

Related Articles

How to Start a Hay Business: Things I Wish I Knew When I Started

January 2023

When Rob Flowers started his custom hay operation, there was a lot he didn’t know. Now he’s passing along his wisdom to others wondering how to start a hay business. Flowers stopped by the Hay Kings podcast to reflect on his career and share his experiences — both good and bad — as a custom operator. Their conversation highlights how your equipment, customer base and ability to prioritize can help you build a custom operation.

Here are some key parts of the episode, edited for readability.

Hay Kings: Would you say you were prepared when you got started? Or was there a learning curve?

Rob Flowers: Well, I mean, a learning curve, absolutely. Prepared? No. People think it’s as easy as “Let’s go buy a tractor, a cutter, a rake and a baler. We’re going to make hay.”

I always joke I’m a mechanic who started baling hay. You’ve got to know how to service equipment. You can’t be scared of it. I’m not saying everyone needs to know how to rebuild transmissions and engines. I wouldn’t tackle that. There’s people that know more about that than I do. You just have to have a mechanical working relationship with the equipment. That’s the learning curve.

Then there’s the learning curve of when is the hay ready. We’re on Mother Nature’s timeframe, not our timeframe. There’s so many variables involved in it.

Hay Kings : Let’s talk about customers. Where did you start out with your customer base? How has it changed?

Rob Flowers : In the beginning, obviously we had small equipment. An 8-foot cutter, a little ten-wheel rake. We started out baling horse pens. We were kind of the little guy. We’d go in and bale these smaller fields. I had a full-time job at the time. What I could do in the evening between five and dark, we did.

As word got around and we got a couple of larger jobs, we leased some land. But a lot of those original customers we still have. It’s hard for the smaller guys to get somebody in there to bale their property. Everybody obviously wants the big jobs. They pay more. We try to take care of those smaller customers.

We stayed with the majority of those original customers. We’ve added quite a few large ones too — up to 225 acres in one field.

Hay Kings: As we’re talking about those small fields versus those big fields, how do you think about prioritizing those custom deals?

Rob Flowers: I tell people, I try to be honest and upfront and as see-through as I can be. I gotta go to the big stuff first. That’s what allows me to stay in business — taking care of the large customers. I’ll get to you. You just have to be patient. That’s one of the reasons we bought virtually two pieces of every piece of equipment we need. If we’re working on a big field, we can get to some of the smaller fields for some of the customers we’ve had for years in a shorter time frame.

Hay Kings: That’s a fairly big jump in financial terms going to that second piece of equipment. Did that make it that you had to quit your day job?

Rob Flowers : Well, actually no. I got frustrated at my job. My wife and I talked. I said, “I think I can make a living baling hay.” She said, “Do it and don’t look back.” So, I jumped in with both feet.

As that second year evolved after that, I realized, “Hey, I need another piece of equipment,” and I made that step. It was scary. Any time you sign your name on the dotted line for a piece of equipment that’s thousands of dollars, that’s a little scary.

Hay Kings: All of this feels vaguely familiar to me. Starting out with small, older equipment and then at some point you start doing well enough that you can afford something nicer. There’s a progression there. Is that how this has to happen?

Rob Flowers: I think if you want to increase your business, it’s a necessity. I don’t think anyone would argue the fact that it’s nice to crawl into a tractor that’s paid for. I’m not saying that we all have to owe billions of dollars on equipment, but you can’t take wore out equipment and make a living. If I’m having to work on that equipment all the time, I don’t have it in the field. To answer your question, yes, I think you have to evolve equipment if you want to get larger. When you’re custom baling and you want to produce a bale of hay to retail, you’ve got to get in there, get the hay cut and get it baled. It takes speed. With speed, you need high-capacity equipment, you need durable equipment and you need equipment you’re not having to work on all the time.

Hay Kings : This also sounds vaguely familiar to my experience. It’s kind of crazy how someone in Washington and someone in Texas can have similar experiences in that expansion and growth. I really like your commentary here.

Rob Flowers : I’ve seen a lot of people that decide they’re going to get into the hay business. They run over to the local dealership, regardless of what color it is. They say, “I got a great deal on this brand-new tractor and a great deal on this brand-new cutter.”

Now the end of the year is here, and they say, “I’ve got to make a payment and I don’t have the money.” You have to start out small. You have to get that customer base.

Hay Kings: Is there anything you would have done different with your machinery purchases throughout the years? Would you have grown a little faster? Would you have gone to something newer faster? Would you have said, ‘I have to have a nice swather,’ versus ‘I have to have a nice baler.’ Take us through your thought process on that.

Rob Flowers : As far as equipment goes, once I got out of my wore-out first cutter, I always purchase new cutters because there’s no hour meter on them. You don’t know how many acres have been put on the things. You really have to be a good judge of what kind of condition that machine is in. I never regretted buying new cutters. I always felt really confident that I knew if they had hit a stump or they hit a chain or a piece cement or whatever, I knew because I bought them brand new. And I’ve had very good luck out of my cutters because of that.

Hay Kings : I think there’s only one manufacturer that makes a 21-foot cutter. It is okay to say the brand name.

Rob Flowers : Well, I’ll do that then. Shout out to Vermeer. My 21-foot cutters are TM1410 trailed mowers. Those mowers are probably one of the best inventions that anybody has ever come up with. We can take it through a 10-foot gate, and it’ll dance around. It’s agile. It does a great job mowing. The blades are super thick to the point of we can cut 400 acres without flipping the blades on them.

To hear more about Flowers’ experience, thoughts on the market and advice for new custom hay producers, listen to the full episode of Hay Kings below or wherever podcasts are available. Want even more information on how to start a hay business? Check out four tips from custom hay producers.

When you’re ready, your local Vermeer dealer can help you explore equipment. Find your dealer here.

Ready to put up hay? Tips to get you started.

Information noted above was gathered from a third party who was advised his/her experience might be featured in marketing materials. This article contains third-party observations, advice or experiences that do not necessarily reflect the opinions of Vermeer Corporation, its affiliates or its dealers. Individual results may vary based on care and operation of machine and crop and field conditions, which may adversely affect performance.

Vermeer Corporation reserves the right to make changes in engineering, design and specifications; add improvements; or discontinue manufacturing at any time without notice or obligation.

Equipment shown is for illustrative purposes only and may display optional accessories or components specific to their global region.

Please contact your local Vermeer dealer for more information on machine specifications.

Vermeer and the Vermeer logo are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries.

© 2023 Vermeer Corporation. All Rights Reserved.

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Farm Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 3,500 farmers create business plans to start and grow their farm businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a farm business plan template step-by-step so you can create your plan today.

Download our Ultimate Farm Business Plan Template here >

What is a Farm Business Plan?

A business plan provides a snapshot of your farm business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Farm

If you’re looking to start a farm business or grow your existing farm business you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your farm business in order to improve your chances of success. Your farm business plan is a living document that should be updated annually as your company grows and changes. It can be used to create a vegetable farm business plan, or a dairy farm, produce farm, fruit farm, agriculture farm and more.

Source of Funding for Farm Businesses

With regards to funding, the main sources of funding for a farm business are personal savings, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a farm business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

Finish Your Business Plan Today!

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of farm business you are operating and the status; for example, are you a startup, do you have a farm business that you would like to grow, or are you operating a chain of farm businesses.

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. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of farm business you are operating.

For example, you might operate one of the following types among others:

• Vegetable Farm : this type of farm grows a wide variety of vegetables (but not grains or soybeans) and melons in open fields and in greenhouses.
• Dairy Farm : this type of farm primarily raises cattle for milk. Typically, this type of farm does not process the milk into cheeses or butter, etc.
• Fruit Farm : this type of farm primarily grows fruits.
• Hay and Crop Farm : More than half of these types of farms grow hay, while a small number grow sugar beets. A variety of other crops, such as hops and herbs, are included in the industry. Some operators also gather agave, spices, tea and maple sap.
• Industrial Hemp Farm : this type of farm grows and harvests cannabis plants with a tetrahydrocannabinol (THC) content of less than 0.3% by weight.
• Plant & Flower Farm : this type of farm grows nursery plants, such as trees and shrubs; flowering plants, such as foliage plants, cut flowers, flower seeds and ornamentals; and short rotation woody trees, such as Christmas trees and cottonwoods.
• Vertical Farming : This type of farm involves growing crops in vertically stacked layers, often using controlled environment agriculture (CEA) technologies. This method dramatically reduces the amount of land space needed for farming and can increase crop yields.

In addition to explaining the type of farm business you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, acquisition of additional acreage, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the farm business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the farm business industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards decaffeinated farm business consumption, it would be helpful to ensure your plan calls for plenty of decaffeinated options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your farm business plan:

• How big is the farm business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your farm business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your farm business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: food manufacturers, grocery wholesalers, retail grocers, restaurants, individual consumers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of farm business you operate. Clearly food manufacturers would want different pricing and product options, and would respond to different marketing promotions than retail grocers.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other farm businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes processed foods, imported goods, and growing produce themselves. You need to mention such competition to show you understand the true nature of the market.

With regards to direct competition, you want to detail the other farm businesses with which you compete. Most likely, your direct competitors will be farm businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior products?
• Will you provide products that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your products?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a farm business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of farm business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to wholesale crops, will you also offer subscriptions to individuals?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the products you offer and their prices.

Place : Place refers to the location of your farm. Document your location and mention how the location will impact your success. For example, is your farm centrally located near gourmet restaurants and specialty grocers, etc. Discuss how your location might provide a steady stream of customers. Also, if you operate or plan to operate farm stands, detail the locations where the stands will be placed.

Promotions : the final part of your farm business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your farm stand extra appealing to attract passing customers
• Distributing produce samples from the farm stand or at farmers markets 
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites 
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your farm business such as serving customers, delivering produce, harvesting, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or acquire more arable land.

Management Team

To demonstrate your farm business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in farming. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in farming and/or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per week or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your farm, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a massive $100,000 supplier contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for seed, equipment, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a farm business:

• Location build-out including barn construction, land preparation, etc.
• Cost of equipment like tractors and attachments, silos, barns, etc.
• Cost of nutrients and maintaining machinery
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Your new farm’s business plan must include a detailed financial plan based on reasonable assumptions of your costs and revenues. To determine if the results you show in this plan will be attractive to investors, look at industry standard financial metrics to see how you measure up against the farming industry, or your sector of the industry, on average. These are some basic measures and ratios to study.

Value of Production

The value of production is equal to your farm’s cash receipts plus the changes in value of product inventory and accounts receivable, less your livestock purchases. This is a measure of the value of the commodities you have produced in the period.

Net Farm Income

The NFI or net farm income, represents the value of production less direct and capital costs in the time period. This is a dollar figure, and not a ratio relating the income to the investment made, so it cannot be used to compare the farm against other farms.

Gross Margin

This represents the NFI less depreciation. The gross margin shows how much money is available in the year to cover the unallocated fixed costs, and dividends to owners and unpaid operators.

Return on Farm Assets

This is a ratio that can be used to compare the farm with others. This is calculated as NFI plus interest expense less unpaid operator labor, all divided by the total assets of the farm.

Asset Turnover Ratio

This ratio is equal to the value or production over the total farm assets. Combined with the operating profit margin ratio, this shows the efficiency of the farm in generating revenues.

Operating Profit Margin Ratio

This ratio is similar to Return on Farm Assets, but divides the same numerator (NFI plus interest expense less unpaid operator labor) by the value of production figure. This shows the percentage of each revenue dollar that becomes profit. If it is low, a higher turnover can compensate, and if it is high, a lower turnover ratio is required.

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Farm Business Plan Summary

Putting together a business plan for your farm business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. It can be used for a small farm business plan template or any other type of farm. You will really understand the farm business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful farm business.

Download Our Farm Business Plan PDF

You can download our farm business plan PDF here . This is a small farm business plan example you can use in PDF format.  

Don’t you wish there was a faster, easier way to finish your Farm business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.  

Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Lucerne Farming Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Agriculture Sector

Do you want to start a lucerne farm and need to write a plan? If YES, here is a sample lucerne farming business plan template & FREE feasibility report.

There are some unique crops that has pretty high nutritional value for cattle that an aspiring entrepreneur who is interested in the commercial hay and crop farming industry can start and make huge returns on his or her investment and one of such businesses is Lucerne farming.

No doubt, starting a Lucerne farming business comes with its own fair share of challenges, but that does not rule out the fact that it is indeed a profitable business venture. An aspiring entrepreneur can either choose to start a Lucerne farm on a small scale or on a large scale depending on their financial status.

A Sample Lucerne Farming Business Plan Template

1. industry overview.

Lucerne which is also known as Alfalfa and called Medicago sativa in binomial nomenclature, is a perennial flowering plant in the legume family Fabaceae. It is cultivated as an important forage crop in many countries around the world.

It is used for grazing, hay, and silage, as well as a green manure and cover crop. Lucerne usually has the highest feeding value of all common hay crops. It is used less frequently as pasture. In addition to being used as feed, it also has a long history of use as a medicinal herb for humans.

Lucerne farmers are part of the Hay and Crop industry and more than half of the farms in this industry grow hay, while a small number grow sugar beets. A variety of other crops, such as hops and herbs, are included in the industry. Some establishments also gather agave , spices, tea and maple sap.

The Hay and Crop industry displays a low level of concentration. The industry is highly fragmented; no single hay and crop farmer/farm holds a lion share of the available market share in the industry., it is not enough to allow the company to dominate the industry. Lucerne farmers are typically niche farmers, operating on small farm land with no more than a few hundred trees.

The Hay and Crop industry is indeed a very large industry and pretty much thriving in all parts of the world especially in countries such as Spain, Italy, Turkey, Greece, Syria, Morocco, Tunisia and the united states of America.

Statistics has it that in the United States of America alone, there are about 441,166 registered and licensed hay and crop farmers scattered all across the United States responsible for employing about 486,066 and the industry rakes in a whooping sum of $31 billion annually. The industry was projected to enjoy -0.9 percent annual growth between 2014 and 2019.

Studies shows that California is the largest producer of Lucerne in the United States followed by Texas & Montana. California is the largest producer of Lucerne in the United States followed by Texas & Montana. The United States produces over 57.5 million tons of Lucerne. Twenty (20) states produce over 1 million tons of Lucerne.

A recent report published by IBISWorld shows that farmers in the industry produce hay, sugar beets, maple, hops and other crops. In the five years to 2010, industry revenue is expected to grow at an average annual rate of 1.6 percent to $17.0 billion.

Volatile crop prices and unexpected weather patterns are the primary drivers of industry revenue. Varying factors have different effects on the distinct product segments, which ultimately creates high volatility in both revenue and profit for industry participants.

The majority of these are hay farms, reflecting hay’s position as the highest-grossing industry product. In 2010, IBISWorld estimates that hay varieties account for 88.2 percent of total industry revenue, while sugar beets account for 8.8 percent and the rest of the crops account for 3.0 percent.

Lastly, with commercial Lucerne farming business, it will pay you to cultivate both organic and non – organic Lucerne crop. As a matter of fact, consumer preferences will drive demand for organic hay (Lucerne crop) going forward.

2. Executive Summary

Nathan Anderson® Lucerne Farms, Inc. is a world class and registered commercial hay and crop farm that will be based in the outskirt of Wichita Falls, Texas – United States. We have done our detailed market research and feasibility studies and we were able to secure a well – situated and suitable farm land to start our commercial Lucerne farming business.

Our commercial Lucerne farm is a going to be standard commercial Lucerne farm hence will be involved in both commercial Lucerne cultivation and silage, grazed, and fed as green – chop processing and packaging.

We have put plans in place that will help us launch a standard and world – class silage, grazed, and fed as green – chop processing plant within the first three years of officially running Nathan Anderson® Lucerne Farms, Inc. We will process and package silage, grazed, and fed as green – chop that they flood the market both in the United States and in other countries of the world; we want to compete with the best in the industry.

Which is why aside from the fact that we’ve secured the required farming land and most of the farming equipment and machines, we have also hired some key employees who are currently undergoing training so as to be able to fit into the ideal picture of the 21 st century commercial Lucerne farm and silage, grazed, and fed as green – chop production plant workforce that we want to build.

Nathan Anderson® Lucerne Farms, Inc. is well positioned to become one of the leading Lucerne farms in the United States of America, which is why we have been able to source for the best hands and farm machineries to run the farm with.

We have put process and strategies in place that will help us employ best practices when it comes to Lucerne farming processes and silage, grazed, and fed as green – chop processing and packaging as required by the regulating bodies in the United States of America.

Nathan Anderson® Lucerne Farms, Inc. is a family business that is owned by Mr. Nathan Anderson and his immediate family members. The farm cum business will be fully and single handedly financed by Nathan Anderson and his immediate family members.

Before starting Nathan Anderson® Lucerne Farms, Inc., Nathan Anderson has worked with some of the leading commercial hay and crop farms and silage, grazed, and fed as green – chop processing plants in the United States of America; he has a degree (B.Sc.) in Agriculture Science from University of Texas.

3. Our Products and Services

Nathan Anderson® Lucerne Farms, Inc. is a world class commercial hay and crop farm that is committed to cultivating Lucerne crops for both the United States’ market and the global market. We are in business to produce food for cattle and horses et al in commercial quantities. We will also ensure that we operate a standard silage, grazed, and fed as green – chop processing and packaging plant as part of our complimentary business.

We are in this line of business to make profits, and we will ensure that we do all that is allowed by the law of the United States of America to achieve our business goals and objectives. These are the areas we will concentrate on in our Lucerne farm. If need arises, we will definitely cultivate related crops;

• Growing Lucerne (organic and non – organic)
• Producing silage, grazed, and fed as green – chop

4. Our Mission and Vision Statement

• Our vision is to established a Lucerne farm that will become the number choice for cattle farmers and horse owners not just in Wichita Falls – Texas but throughout the United States of America.
• Nathan Anderson® Lucerne Farms, Inc. is a world class Lucerne farms that is in business to cultivate Lucerne crop in commercial quantities and processed silage, grazed, and fed as green – chop for both the United States market and the international market.
• We want our well – packaged silage, grazed, and fed as green – chop to flood every nooks and crannies of the United States of America.

Our Business Structure

Nathan Anderson® Lucerne Farms, Inc. is a Lucerne farm that intend starting small in Wichita Falls – Texas, but hope to grow big in order to compete favorably with leading commercial Lucerne farms in the commercial hay and crop farming industry both in the United States and on a global stage.

We are aware of the importance of building a solid business structure that can support the picture of the kind of world class business we want to own. Which is why we are committed to only hire the best hands in and around Texas.

At Nathan Anderson® Lucerne Farms, Inc., we will ensure that we hire people that are qualified, hardworking, dedicated, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the management of the farm. In view of the above, Nathan Anderson® Lucerne Farms, Inc. have decided to hire qualified and competent hands to occupy the following positions;

• Chief Operating Officer

General Farm Manager

• Administrator/Accountant
• Lucerne Processing and Packaging Plant Manager
• Sales and Marketing Executive
• Field Employees
• Front Desk Officer

5. Job Roles and Responsibilities

Chief Operating Officer:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for the planning, management and coordinating all farm activities across the various sections on behalf of the organization
• Supervise other section managers (Lucerne cultivation manager and silage, grazed, and fed as green – chop processing and packaging manager)
• Ensure compliance during project executions
• Providing advice on the management of farming activities across all section
• Responsible for carrying out risk assessment
• Using IT systems and software to keep track of people and progress of the growth of crops (Lucerne crop)
• Responsible for overseeing the accounting, costing and sale of farm produce after harvest
• Represent the organization’s interest at various stakeholders’ meetings
• Ensures that farming goals desired result are achieved, the most efficient resources (manpower, equipment, tools and chemicals et al) are utilized and different interests involved are satisfied. Responsible for preparing financial reports, budgets, and financial statements for the organization
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Handles all financial transactions for the company
• Defining job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Oversee the smooth running of the daily farming activities across the various farming sections.

Administrato/Accountant

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Responsible for financial forecasting and risks analysis.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the farm
• Serves as internal auditor for the farm

Lucerne crop Cultivation Manager/Supervisor

• Responsible for managing the Lucerne crop cultivation section of the Lucerne farm
• Supervises other workers within the department
• Work closely with the General Manager to achieve the organizations’ goals and objectives

Lucerne Processing and Packaging Manager/Supervisor

• Responsible for managing the silage, grazed, and fed as green – chop processing and packaging section of the commercial hay and crop farm

Sales and Marketing Officer

• Identify, prioritize, and reach out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts.
• Writing winning proposal documents, negotiate fees and rates in line with company policy
• Responsible for handling business research, marker surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develop, execute and evaluate new plans for expanding increase sales
• Document all customer contact and information
• Represent the company in strategic meetings
• Help increase sales and growth for the farm

Field Workers/Contract Staff

• Responsible for preparing farm lands for Lucerne crop cultivation
• Responsible for watering the crop
• Weeding or fertilizer and/or pest control application
• Handles farm implements and machines as instructed by the section manager/supervisor
• Assist in handling the harvest of Lucerne crop
• Carries out task in line with the stated job description
• Assist in transport working tools and equipment from the farm and back to the designated store room
• Handles any other duties as assigned by the line manager

Client Service Executive/Front Desk Officer

• Welcomes guests and clients to the farm by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Receives parcels/documents for the organization
• Distribute mails in the organization

6. SWOT Analysis

Nathan Anderson® Lucerne Farms, Inc. do not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis. We know that if we get it right from the onset, we would have succeeded in creating the foundation that will help us build a standard Lucerne farm that will favorably compete with leading commercial Lucerne farms in the United States of America and in the rest part of the world.

We are quite aware that there are several large scale, medium scale and small scale Lucerne farms all over Wichita Falls – Texas and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Nathan Anderson® Lucerne Farms, Inc. employed the services of an expert HR and Business Analyst with bias in the commercial hay and crop farming industry to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

Here is a summary from the result of the SWOT analysis that was conducted on behalf of Nathan Anderson® Lucerne Farms, Inc.;

Our strength as a Lucerne farm is the fact that we have healthy relationships with loads of major players in the commercial cattle farming industry; both suppliers and buyers of Lucerne and silage, grazed, and fed as green – chop within and outside of the United States.

We have some of the latest commercial hay and crop farming machines, tools and silage, grazed, and fed as green – chop processing equipment that will help us cultivate Lucerne crop in commercial quantities with less stress. Aside from our relationship (network) and equipment, we can confidently boast that we have some the most experienced hands in Wichita Falls – Texas in our payroll.

Our weakness could be that we are a new Lucerne farms in the United States, and perhaps the fact that we decided to diversify our farming activities could count against us initial. We are aware of this and from our projection will overcome this weakness with time and turn it to a major advantage for the business.

• Opportunities:

The opportunities that are available to us cannot be quantified, we know that there are loads of cattle farmers and horse breeders and owner that rely on the supply of olives from Lucerne farms in the United States of America and other parts of the world. We will ensure that we maximize the opportunities available to commercial Lucerne farmers. As prices increase with increased demand, Lucerne farmers will begin to experience revenue growth.

Livestock farmers regularly purchase hay as feed for their herds. Demand for hay usually increases during adverse weather conditions when the area of natural pastures is lower. Demand from beef cattle production is expected to increase this year; however, the unpredictable nature of demand with respect to consumer preferences and international trade poses a potential threat to the industry.

7. MARKET ANALYSIS

• Market Trends

Despite the fact that Lucerne farming has been in existence since time immemorial, which does not in any way make the industry to be over saturated; Lucerne farmers are exploring new technology to continue to improve the cultivation processes and also silage, grazed, and fed as green – chop preservation and processing processes; mechanized farming has indeed increased the tons of olives produced by farmers.

The fact that there is always a ready market for silage, grazed, and fed as green – chop and Lucerne crop makes the business highly thriving and profitable. Lastly, the diverse composition of the industry creates a mixed bag of trends.

An individual farm is not profitable in any given year, but a farmer is likely to see a profit over the long run as a result of mixed crops and successful rotations. With that in mind, profits have fallen over the past five years as a result of increased input costs, particularly fertilizer, and unprecedented economic conditions.

Hay farming displayed steady revenue growth over the three years to 2008 as an increasing number of cattle farmers turned to hay instead of high-priced corn and soybean feed. However, in 2009, livestock farmers’ efforts to cut input costs turned them away from high-protein Lucerne hay in favor of lower-priced feed mixes.

8. Our Target Market

We will ensure that we position our business to attract consumers of silage, grazed, and fed as green – chops not just in the United States of America alone but also other parts of the world which is why we will be exporting some of our farm produce either in raw form or processed form to other countries of the world.

Below are some of our target market;

• Cattle farmers
• Horse breeders
• Sheep farmers
• Goat farmers
• Horse owners
• Herbal medicine manufacturers

Our Competitive Advantage

Nathan Anderson® Lucerne Farms, Inc.  is fully aware that there are competitions when it comes to selling commercial hay and crop farm produce including Lucerne crop and silage, grazed, and fed as green – chop all over the globe, which is why we decided to carry out thorough research so as to know how to take advantage of the available market in the United States and in other parts of the world.

We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are effective and reliable Lucerne farming processes that can help us sell our produce at competitive prices, robust business and distribution network and excellent relationship management.

Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we will operate an all – round standard commercial Lucerne farms that will also include silage, grazed, and fed as green – chop processing plant. With this, we will be able to take advantage of all the available opportunities within the industry.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (start – ups Lucerne farms) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Nathan Anderson® Lucerne Farms, Inc. is in the commercial hay and crop farming business for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry to achieve our corporate goals and objectives.

In essence we are not going to rely only on the sale of our farm produce to generate income for the business. Below are the sources we intend exploring to generate income for Nathan Anderson® Lucerne Farms, Inc.;

• Sale and supply of freshly harvested Lucerne crops
• Sale and supply of silage, grazed, and fed as green – chop

10. Sales Forecast

We conducted a thorough market survey and feasibility studies and we were able to discover that the sales generated by a commercial hay and crop farm depends on the size of the farm, the nature of the commercial hay and crop farm.

We have perfected or sales and marketing strategies and we are set to hit the ground running and we are quite optimistic that we will meet or even surpass our set sales target of generating enough income/profits from the year of operations and build the business from survival to sustainability.

We have been able to critically examine the hay and crop farming industry cum Lucerne farm line business and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some workable assumptions as well with respect to the nature of Lucerne farm that we run.

We will be running a standard silage, grazed, and fed as green – chop processing plant with a capacity to export well – branded and packaged silage, grazed, and fed as green – chop to states all across the United States of America Below are the projections that we were able to come up with for the first three years of running Nathan Anderson® Lucerne Farms, Inc.;

• First Fiscal Year (FY1): $200,000
• Second Fiscal Year (FY2): $350,000
• Third Fiscal Year (FY3): $400,000

N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown that can impact negatively on household spending, bad weather cum natural disasters (draughts, epidemics and floods), and unfavorable government policies . Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

We are quite aware that the reason why some Lucerne farms hardly make good profits is their inability to sell off their Lucerne crops as at when due. In view of that, we decided to set up a standard silage, grazed, and fed as green – chop processing plant to help us maximize profits.

Our sales and marketing team will be recruited base on their vast experience in the industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization. We want to build a standard and world – class Lucerne farm that will leverage on word of mouth advertisement from satisfied clients (both individuals and businesses).

In summary, Nathan Anderson® Lucerne Farms, Inc. will adopt the following strategies in marketing our Lucerne farm produce;

• Introduce our business by sending introductory letters alongside our brochure to stake holders in the cattle farming industry, horse breeders, sheep farmers, goat farmers and horse owners et al.
• Advertise our business in agriculture and cattle farmers related magazines and websites
• List our Lucerne farms on yellow pages ads
• Attend related agriculture and animal feed expos, seminars, and business fairs et al
• Leverage on the internet to promote our business
• Engage in direct marketing
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Any business that wants to grow beyond the corner of the street or the city they are operating from must be ready and willing to utilize every available means (both conventional and non – conventional means) to advertise and promote the business. We intend growing our business which is why we have perfected plans to build our brand via every available means.

We know that it is important to create strategies that will help us boost our brand awareness and to create a corporate identity for our Lucerne farm business. Below are the platforms you can leverage on to boost our Lucerne farm brand and to promote and advertise our business;

• Place adverts on both print (newspapers and magazines) and electronic media platforms
• Sponsor relevant community based events/programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our business
• Install our Bill Boards on strategic locations all around Wichita Falls – Texas
• Engage in roadshow from time to time in targeted neighborhoods
• Distribute our fliers and handbills in target areas
• List our Lucerne farms in local directories/yellow pages
• Advertise our Lucerne farms in our official website and employ strategies that will help us pull traffic to the site.
• Ensure that all our staff members wear our branded shirts and all our vehicles and trucks are well branded with our company logo et al.

12. Our Pricing Strategy

Some of the factors that will help you sell your Lucerne crops at the right price that will guarantee that you make profits is dependent on your strategy while some of the factors are beyond your control. For example, if the climatic condition is unfavorable and if there are natural disaster in the location where you have your Lucerne farm, then it will directly affect the harvest of Lucerne and also the prices of your farm produce.

In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our Lucerne crops and silage, grazed, and fed as green – chop et al are sold a little bit below the average prices in the United States of America. We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our soybean farming business

• Payment Options

The payment policy adopted by Nathan Anderson® Lucerne Farms, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Nathan Anderson® Lucerne Farms, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via online bank transfer
• Payment via check
• Payment via Point of Sale Machines (POS Machines)
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for farm produces purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our Lucerne crops and processed (well – branded and packaged silage, grazed, and fed as green – chop).

13. Startup Expenditure (Budget)

Below are some of the basic areas we will spend our start – up capital in setting up our Lucerne farm;

• The total fee for incorporating the business in United States of America – $750.
• The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
• The amount needed to acquire/lease a farm land – $50,000
• The amount required for preparing the farm land – $70,000
• The cost for acquiring the required working tools and equipment/machines/fencing et al – $10,000
• The amount required for purchase of the first set of Lucerne seedlings et al – $50,000
• The amount required to set up a standard silage, grazed, and fed as green – chop processing plant within the farm facility – 100,000
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
• The cost of launching an official website – $600
• The amount required for payment of workers for a period of 3 months – $100,000
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,000

Going by the report from detailed research and feasibility studies conducted, we will need an average of two hundred and fifty thousand dollars ($250,000) to start a standard Lucerne farm with silage, grazed, and fed as green – chop processing plant business in the United States of America.

Generating Funds/Startup Capital for Nathan Anderson® Lucerne Farms, Inc.

Nathan Anderson® Lucerne Farms, Inc. is a family business that will be owned and managed by Nathan Anderson and his immediate family members. They are the sole financier of the firm, but may likely welcome other partners later which is why they decided to restrict the sourcing of the start – up capital for the business to just three major sources.

These are the areas where we intend sourcing for fund for Nathan Anderson® Lucerne Farms, Inc.;

• Generate part of the start – up capital from personal savings and sale of his stocks
• Generate part of the start – up capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Nathan Anderson® Lucerne Farms, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to sell our farm produce (Lucerne crop and even processed and packaged silage, grazed, and fed as green – chop) a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Nathan Anderson® Lucerne Farms, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our organization’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner of our business strategy.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more as determined by the management of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of All form of Insurance for the Business: Completed
• Leasing of farm land in Wichita Falls – Texas and preparing the farm land: Completed
• Conducting Feasibility Studies: Completed
• Start – up Capital Generation: Completed
• writing of business plan: Completed
• Drafting of Employee’s Handbook: Completed
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
• Recruitment of employees: In Progress
• Building /construction of fence et al: In Progress
• Purchase of the needed working tools, machines and equipment: Completed
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Farm land Treatment, Health and Safety Arrangement: In Progress
• Establishing business relationship with vendors and key players in the industry (cattle farmers, fertilizer suppliers, herbal medicine manufacturers and transporter / haulage companies et al): Completed

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12: Business Plans

What is a business plan.

A business plan is a document that helps you to organize and succinctly summarize the vision you have for your business. The plan contains the operational and financial objectives of a business, the detailed plans and budgets showing how the objectives are to be realized.

A good business plan will contain the following:

• Your business vision, mission statement, key values, and goals
• Description of the product(s) you intend to produce
• Strengths, Weaknesses, Opportunities and Threats the business may experience are described
• Production plans
• Marketing plans
• Estimated start-up costs
• Information on your legal structure and management team
• Current financial statements or projected financial statements.
• Resume or brief explanation of your background and relevant experience
• Less than 10 total pages so that people actually read it

Helpful Publications for Writing a Business Plan

General Business Resource Publications:

• Starting an Ag-Business? A Pre-Planning Guide http://publications.dyson.cornell.edu/outreach/extensionpdf/2004/Cornell_AEM_eb0408.pdf
• Business Transfer Guide: Junior Generation http://publications.dyson.cornell.edu/outreach/extensionpdf/2016/Cornell-Dyson-eb1605.pdf
• Producing a Business Plan for Value-Added Agriculture http://publications.dyson.cornell.edu/outreach/extensionpdf/2007/Cornell_AEM_eb0708.pdf
• Business Planning for the Agriculture Sector: A Guide to Business Plan Development for Start-up to Mid-size Operations http://publications.dyson.cornell.edu/outreach/extensionpdf/2010/Cornell_ pdf
• Building a Sustainable Business (Sustainable Agricultural Research Education (SARE)Publications) sare.org/publications/business.htm 280 pages of education and practical exercises to guide you through the financial, management, and interpersonal skills needed to start a successful farm business. Order hard copy for $17 or download PDF online for free.

Cornell Cooperative Extension Publications for Specific Commodities:

• Landscape Business Planning Guide http://publications.dyson.cornell.edu/outreach/extensionpdf/2003/Cornell_AEM_eb0313.pdf
• Writing a Business Plan: A Guide for Small Premium Wineries http://publications.dyson.cornell.edu/outreach/extensionpdf/2002/Cornell_AEM_eb0206.pdf
• Writing a Business Plan: An Example for a Small Premium Winery https://ageconsearch.umn.edu/bitstream/122203/2/Cornell_AEM_eb0207.pdf

Getting Help Writing a Business Plan

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Sample Business Plans

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• Soil Testing
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Below are examples of different farm business plans and a loan application:

Oregon Flower Farm Business Plan Example

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Farm Business Plan

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.

20+ Farm Business Plan Examples

1. farm business plan template.

• Google Docs

Size: A4 & US

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• Apple Pages

Size: 21 KB

7. Farm Business Plan Template

Size: US, A4

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17. Farm Business Planning Example

Size: 736 KB

18. Simple Farm Business Plan Example

19. Agri-Business Plan for a Farm Example

Size: 270 KB

20. Agricultural Farm Business Plan Example

Size: 515 KB

21. Farm Business Plan Example

Size: 153 KB

What Is a Farm Business Plan?

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.

Importance of a Farm Business Plan

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.

How To Create a Farm Business Plan

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.

1. Begin with a Realistic Plan

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.

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 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.

3. Set an Action Plan

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.

4. Present the Values and Benefits

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.

5. Proofread the Plan

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.

FAQ’s

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.

Is a business plan necessary?

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.

What are the two primary elements of a business plan?

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.

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