Writing a business plan? 3 things to include in your farm background
A business plan is a crucial document for any company, including farms. It acts as a roadmap that explains who you are, how your farm operates, and your finances.
One section, the company background and history, is part of introducing a solid business plan, but farm business owners often overlook it.
While taking time to write out this information may seem less valuable than setting goals or calculating financial data, it’s a critical part of the document. That’s because some people reading your plan — such as lenders, investors or partners — may not be familiar with you or your farm business.
“The background and history section is your opportunity to share the history, decisions and milestones that helped bring your operation to where it is today,” says Val Panko, FCC business advisor. “If you are starting a new business, it’s an opportunity to share what led you here and what inspired you to take the leap.”
Why telling your story matters
Count on the reader of your business plan to know nothing about your farm, so it makes sense to explain the origin.
Your farm history can go a long way in illuminating values, character and commitment.
The farm's history, along with your personal experience and qualifications, strengthens the other components of the business plan, including the sales and marketing of your products or services.
“Understanding the skill level and management capability is a crucial factor in the decision to grant credit, but the challenge is that management ability is one of the most difficult factors to measure,” explains Michelle Sandercock, credit manager at FCC. “If you consider the background and history of a business to be congruent to a resume, sharing your history can go a long way in illuminating values, character and commitment.”
This is your opportunity to create that narrative and direct the reader to your motivations and intentions, Panko adds.
What to include
To begin writing your company background and history, consider these steps.
1. Dig into your roots and provide a brief historical timeline
Where and when was the farm founded? When were major assets acquired? If you’re not the company's founder, indicate when the transition of ownership and management took place.
2. Outline the business ventures that worked out and those that did not
Briefly explain why major farm business decisions were made and what the outcomes were. What are your key achievements? What has changed since you started? Are there key values you wish to retain?
3. Describe your current business
How does your farm fit within the current market? What are your farm's current major initiatives? What solutions do you provide to your customers? What significant changes could impact the operation?
Remember that not all the questions suggested in business planning resources must be addressed. Choose the questions that best tell your farm story and answer the ones that draw the picture you want your readers to see, advises Panko.
Looking for more business plan advice and support?
Download FCC’s free business plan bundle, designed for Canadian agriculture. The guide, template and sample plan make starting your business plan easier.
Article by: Rebecca Hannam
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