12.05.08 - No Business Plan, No Farming Success
By Terry Dulaney CEO AgVenture.
AgVenture’s Stephen Lary (right) discusses the importance of having a well thought business plan with Dale Pillow of Archula Plantation, Schlater, MS. The first and most important decision is to decide which crops to plant and which fields to plant them on. Even though most farmers don’t decide that until after harvest, they REALLY NEED to make those decisions as soon as the planters begin to roll the previous spring.
Farmers are the only group of businessmen I know who start a new business every year. That’s right. They go to the field every year to produce an entirely new crop, in an entirely new environment, with an entirely new set of products and management ideas. Pretty impressive. The problem is many farmers begin their new businesses every year without a well-developed business plan. That’s the reason so many of them struggle to stay in business or at least fail to improve over the previous year. Any successful business MUST have a carefully thought out business plan to start-up and operate.
If an entrepreneur went to his banker to borrow money to start a new business, what would be the first words out of the banker’s mouth? "Let me have a look at your business plan.” If you’re the typical 21st century farmer you would say, "I don’t have one yet, but I plan to develop one as the year progresses.” Knowing what bankers know about the failure rate of new businesses, especially those without a well thought out business plan, he could simply laugh and ask you to leave his office without loaning any money. He knows the risk of starting a new business without a business plan which lays out products to be produced, costs of production, and a marketing plan. How ludicrous it is today for farmers to believe they can do exactly that. Farming has become more complicated and requires much more planning, far in advance. Penciling out numbers before hand gives entrepreneurs control and a sense of direction.
What are the most important decisions a farmer needs to make that only a carefully constructed business plan can supply the answers to? The first and most important decision is to decide which crops to plant and which fields to plant them on. Even though most farmers don’t decide that until after harvest, they REALLY NEED to make those decisions as soon as the planters begin to roll the pre- vious spring. A farmer’s business plan must not be based on knee jerk reactions that change-in-step to every violent swing in market prices or to what friends within their circle of influence tell him to do. Those plans are seldom correct because they are not based on decisions tailored for your own operation. A good business plan is a plan for the future based on what you WANT and NEED to have happen. A farmer must begin his cropping decisions much earlier in the season than he has in the past. Remember that 75% of all varieties never yield to their potential because they’re planted on the wrong field. It takes time to make those key decisions. Once those decisions are made, fields can be prepared for next year, inputs can be purchased or booked, and the marketing can begin.
A cropping plan is the blueprint of every farming business. Your AgVenture Maximum Profit Seed Specialist can help you get your cropping plan underway, get your seed varieties chosen, and place those varieties on the right fields. Not only will your year be more profitable but it will greatly simplify your life.
For more information contact AgVenture Mid-South, 877-974 SEED or 662-627-7060. You will be glad you did.