Small scale farmers normally face a lot of challenges setting up a successful and thriving farming business. While some of these challenges have to do with unfavorable policies, others are as a result of non availability of a clear plan or line of action for the business.

The business plan is the document containing every blueprint that needs to be implemented. This is why this article seeks to act as a guide for agro-entrepreneurs who seek establish or have established small scale farm businesses.

It highlights the basic requirements every small scale farming business plan should possess and enables the farmer who has little or no idea on writing a compelling business plan to have a grasp of what is required as well as how to go about implementing same.

Here is a sample business plan for starting a small farm.

Executive Summary

The importance of the executive summary section of any business plan cannot be overemphasized. This is because this is part of the document that allows anyone going through it to have a general idea/picture of what is contained in the business plan.

As the name suggests, it summarizes the key components of the plan and is normally meant for investors who in most cases are busy and hardly have the time going through the entire document. They browse through the summary to check the specifics. If your business is going to attract funding from investors/lenders, the executive summary of the plan holds the key.

Therefore it is necessary that you commit your time and efforts towards producing a sound executive summary which by extension will result in a well written overall business plan. The executive summary should clearly state the purpose for which funding is required as well as the exact amount needed.

Details of loan repayment should be clearly spelt out. This demonstrates your capacity to run an effective business capable of repaying the loan as well as interests incurred. For some investors, providing more than one repayment option is required.

Choice of an Ideal Legal Structure

The selection of a suitable business structure for your small scale farming is necessary. There are several types of legal structures to choose from and each of these structures offers a unique opportunity for different types of businesses.

Some legal structures include Limited Liability Partnerships LLP, Limited Liability Company LLC, Partnerships, Sole Proprietorships and more. Because we are concerned with small scale farming businesses, these types of businesses operate under the sole proprietorship structure or partnership structure.

These are the most ideal legal structures under which small scale agro businesses operate.

However, as small scale agricultural businesses expand, the need to change to a more suitable legal structure becomes necessary. This is to enable the business adjust its operations to accommodate current realities. Hence if you plan on changing you legal structure in future, you should state clearly why you need to change your structure as well as the when this change will come into effect. You also need to state how the change in structure will benefit your business.

Business Description

Anyone reading your business plan will need to have a general idea of what the business is all about. The business description section of the plan should provide relevant information about the business.

This should include the history, the current or present state of affairs as well as future projections about where the business should be in the nearest future. You should also include the trends in the agro industry with respect to small scale farming as well as what you will be producing and how these products will be of benefit or importance to your clients.

Using these trends, you should be able to have a target of where you want your business to be in the foreseeable future as well as the challenges and opportunities you will have to surmount and take advantage of respectively.

Defining your Products and Services

Because small scale farming can involve the cultivation or distribution of a variety of farm produce as well as the provision of agricultural services such as training, you should clearly define these products as well as services so the reader is able to have a broader understanding of all your business activities and products.

While providing these products and services, you should also be able to picture the worst case scenario and provide the best possible ways of solving problems which may arise unexpectedly.

Identifying your Target Market

It is important to clearly identify your target market before commencing business operations. This is because without a clear market for which your products are meant for, you will be stuck after producing your products with no distribution channels. You should clearly explain how you did your market research to arrive at your target market.

Knowing the buying habits as well as the type of agricultural products which are most needed by your target market will give you a head start and allow you streamline your efforts towards providing acceptable agricultural products and services

Financial Details

Under this section of your business plan, you should be able to provide relevant summary of all your financial needs.

This should also highlight your application for loans with which to fund your business activities, your budget or cash flow statements, a three year financial projection, actual performance statements for businesses which have been in existence as well as a break-even analysis. Details of these will enable you keep track of all spending and also help streamline your business operations.

These are some of the basic requirements which must be contained in any small scale farming business plan. It is necessary that you take your time in producing a well-written business plan as this is key to the success of your business. Your business plan, if well written can attract the funding you need.

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