1. Business Plans to Guide, Lead and Follow

2. Heather Gessner McCook County Extension Educator Mark Major Jerauld County Extension Educator South Dakota State University Cooperative Extension Service

3. What is a Business Plan It is an ongoing process that begins with the identification of values and ends with strategic planning to address critical management functions

4. “Business planning is a critical component to any operation. Even though a ‘seat of the pants’ approach to farming might work, it takes to long to figure out if a decision is a poor one; you can waste years doing the wrong thing when you could have done the right thing.” ---Greg Reynolds, Riverbend Farms

5. Who should take the time? Beginning/Starting Farmers Families farming with older children or that want to bring children back to the operation Marketing Groups New/Value-Added Product Lender/Investor information Holistic

6. If you are planning on: Changing management practices Expanding the operation Incorporating more family members or business partners Transferring or selling the business Adding a value added component Adding a new business venture

7. Who puts this thing together? YOU DO –Anyone with a vested interest in the operation should be invited to add their input

8. Family members Employees Partners Renters Other producers Landlords Customers Resource organizations Input dealers Lenders Community members Technical experts

9. Building A Sustainable Business A Guide to Developing A Business Plan For Farms and Rural Business Minnesota Institute for Sustainable Agriculture

10. Parts To A Business Plan Cover Executive Summary Table of Contents Business Background (History and Business Mission Current Situation) Vision and Goals Key Planning Assumptions Marketing Strategy Operations Strategy Management and Human Resources Strategy Financial Strategy Projected Income Statement and Cash Flow Appendices (Relevant support info.: market research, resumes, brochures, letters of recommendation, tax returns etc.)

11. The Three Questions Where did I come from? What is my current situation? Where do I want to go?

12. Business Plan Guides the Business Through Its Life Cycle START/BEGIN GROWTH CONSOLIDATE TRANSFER/SELL Financial Management in Agriculture, 7 th ed., Barry et al., 2002

13. Through all those stages business owners need to keep in mind the “BIG 4” Management Areas Marketing Operations Human Resources Finance

14. Where Do We Start? 1.Identify Values What is important to you? These are not goals. Identify the values that bring everyone together. Personal values need to be combined with the values of the whole team.

15. Personal Values “Because our health is directly tied to the health of the environment, we strive to produce healthy dairy and meat products by utilizing sustainable methods in their production…” ----Cedar Summit Farms

16. 2.Review History and Take Stock of Your Current Situation What is my current situation? Document your business history and take stock of your current situation. Relay as accurately as possible these facts.

17. Current Status Current market assessment Working assets Crop/Livestock production systems Human resources Family situations Financial documentation Risk Management

18. SWOT Analysis Analysis of your operations: Strengths Weaknesses Opportunities Threats

19. 3.Clarify Your Vision Where do you want to go? What are your goals? Clarify a future vision for the business and develop goals and a mission statement that reflect the values you have identified.

20. Where do you want to go? Expanding Exiting Ownership change Production changes Vertical integration Business Mission Statement

21. 4.Strategic Planning and Evaluation What routes can you take to get where you want to go Development and evaluation of strategic marketing, operations, human resources and financing alternatives is the largest and maybe the hardest part of the plan.

22. Strategic Planning & Evaluation Value added products Inventory management Marketing plans/Risk Management Production systems Permits, Policies, & Regulations Resource allocation/Human resources Executive Summary

23. Most important part of the Business Plan Typically includes –Identity –Location –History –Ownership –Industry and competition –Product –Marketing –Human Resources –Finances

24. 5.Present, Implement and Monitor Your Business Plan Which route will you take and how will you check your progress along the way Pull everything together into a formal, written plan that can be used as an in-house tool, to obtain credit, help everyone remember where you want to go.

25. Implementation How are you going to create this beast? Outline Implementation to-do list Monitoring list Tasks and Workload breakdown

26. Tying it all together Look at where you’ve been Decide where you are Figure out where you want to go Compile facts, figures, and resources Implement and monitor progress

27. USE IT!! The biggest part of this process is to use the Business Plan Make it available Revise it as needed Reevaluate your goals and checkpoints Don’t use it as a bookend!