Published October 30, 2024 • 3 Min Read
A business plan isn’t just something you write when you start a business. It’s a living document that can help you respond to the complexities of today’s agriculture industry while working towards your evolving farming business goals.
The agricultural business is changing rapidly and becoming more complex. From commodity price swings to changes in ownership structures, there’s more to farm business management than there used to be.
These complexities highlight why a formal business plan is crucial to progressing toward your operation’s business goals. In fact, a comprehensive study by the Business Development Bank of Canada (BDC) found that top-performing operations were far more likely to have written business plans than lower-performing ones.
Read on to learn why a robust business plan is invaluable at any business stage and how to start your business planning journey.
A living document connecting today to tomorrow
Impressively, many Canadian producers have built successful businesses using an informal and intuitive approach to planning. You might think, ‘I’ve gotten this far without a formal plan; why do I need one now?’ That’s understandable.
A robust business plan is much more than a strategy people write when they start a business. Like a map, a business plan helps business owners, at any stage of business, connect the dots between three key elements:
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Where they are now
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Where they want to go
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How they’re going to get there
A business plan is a living document that, if updated annually as markets change and people develop, can help even the most successful farming operations respond to the unique challenges of today’s ag industry while staying focused on their next move.
The future doesn’t have to be about expansion
Many producers feel comfortable with where they’ve gotten. They’ve worked hard to build their businesses and now enjoy a steady-as-she-goes period. And fair enough. While many companies use a business plan to focus on expansion, it may be more helpful to view it as a tool for navigating what comes next — whatever that may be.
You may be thinking of expanding operations, or perhaps you’re thinking of:
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investing in new technologies
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scaling back your involvement
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bringing new family members into your operation
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opening a side venture or
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preparing for a sale
Whatever your next move, a business plan can help you think creatively about options, how to respond to potential obstacles, and the steps you need to take to make those moves happen.
Start creating the future you want
Getting started on your business plan or even evaluating the plan you already have can feel daunting. While the process can take time, we’ve put together an informative and easy-to-use Farm Business Planning Guide that helps you evaluate your goals based on four key aspects of your business: financials, operations, marketing and people.
No matter where you are on your journey, this guide can help simplify the business planning process and inspire you to think creatively about your next move.
Get in touch with an RBC agricultural relationship manager to review an existing plan or help get you started.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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