Organic Farmer Network: Network Discussion Summary

Topic: Business Plan

Charlie wants to do a business plan for their farm. “We received a copy of the book Julia recommended "Building A Sustainable Business," developed by the Minnesota Institute for Sustainable Agriculture." This looks like a very helpful resource. Do any of you have experience developing a business plan, and if so, how did you find it be helpful? Is it worth the time and work?”

Ken replies: “I'd be interested in seeing what a business plan is. My plan has always been - improve my soil, raise produce, sell it, take in more than I spend, make money. I've never written it down, or seen the need, possibly because I never had to borrow money against the business itself. I have always kind of flown by the seat of my pants. I would find it interesting to see what you come up with.”

Rose replies: “I think a business plan is probably a good idea if you are using it as a decision making tool to determine the profitability (or not) of your business. I have never done one for the same reasons that Ken stated. The hard thing about agriculture is that it is not as predictable as other business ventures and just because you invest more doesn't mean you will get more out in any given year. I think if you are looking to make a major change or capital investment it makes sense to do some evaluation. For example, Ellen is embarking on a whole new phase in her operation and a business plan would probably be real useful. I had some students do an analysis of the farm that look at profitability based on my goals. At that time, a personal goal was to maintain my income but work less (yeah, right). The analysis had me switch a good portion of my farm to flowers based on the information I provided to the students. In theory this was probably correct but it would have changed the diversity of crops on the farm and I felt it would be too risky---people have to eat but can do without flowers. I saw the effects of an economic downside last year on my flower crop. I sold pretty much everything I grew but the speed of which I sold them at the farmer's market was definitely slower than in past years. It will be interesting to see what this year brings.”