Planning for Success

A speaker at a recent workshop stated: "Spend less time in your business and more time on your business". What does this mean to beef producers? The idea of spending more time developing or examining your business plan rather than working in the field or barn to ensure the day to day activities are operating efficiently may not seem too exciting!

The Canadian Chamber of Commerce e-learning centre cited ten key reasons why small businesses fail, and the number one reason was: "Lack of an adequate, viable business plan." If developing and maintaining a business plan for your operation seems like a daunting task - remember that a business plan is a game plan or road map for a defined period of time.

Why Plan? Planning is essential as it helps define goals, outlines roles and responsibilities, sets a benchmark to record and compare progress and provides essential documentation usually required by financial institutions and government assistance programs.

First and foremost you need to develop a Strategic Vision or a statement of where your business is headed; a Business Mission or a statement of how you do business; and key objectives and goals - once these are established you are ready to tackle a business plan.

Example:

Strategic Vision: Farm XYZ become the leading producer of grass fed beef in the county

Business Mission: Farm XYZ will produce quality beef products for the local market.

Key Objectives and Goals: Expand direct sales to include 20 families, 3 restaurants and 2 speciality shops.

These three components now provide a clearer picture of who you are and where you want to go with your business.

Planning also includes developing a business plan that reviews the Strengths, Weaknesses, Opportunities and Threats (SWOT) of your operation.

Strengths and Weaknesses are the two things that are in your control, while Opportunities and Threats are less in your control, and even be totally out of your control such as the weather, world markets, etc. Knowing your strengths and weaknesses will help in addressing and dealing with the opportunities and threats that come your way.

Much attention is given to conducting a SWOT analysis of your business in the Quest for New Farm Value™ - Value Plus workshops (developed by Farm Management Canada and Gary Morton of Morton Horticultural Associates) being held this winter across Ontario. An exercise in the workshop includes participants:

  • Listing three business strengths.
    Examples: Enjoy producing high quality beef; family members are engaged in the business; enjoy working with people and building customer loyalty.
  • Listing three business weaknesses.
    Examples: Little focus on financial records to understand what areas of the business are declining or growing; marketing efforts are too broad and not focused; no written business plan in place to direct the business in the short and long term.
  • Listing three business opportunities.
    Examples: Growth in interest by consumer in local food, growing support for the farmer; proximity to growing urban markets.
  • Listing three business threats.
    Examples: weather; world markets and economics; food recalls.

Once you have conducted your SWOT analysis you are in an excellent position to develop a plan that examines how you will build on your strengths and opportunities, improve weaknesses and manage threats.

The components of a successful business plan include a production plan, human resource plan, financial plan and a marketing plan. The marketing plan is often the most challenging to prepare as it involves trying to understand the consumer and the ever changing marketplace.

A comprehensive marketing plan examines global and consumer trends; reviews the marketing mix of product, price, place and promotion; and provides details of how you will market your product or service over a certain period of time.

For those new to marketing their product or service, marketing is often described in terms of the 4P's. The 4P's affect every marketing decision you make from production to the end user and include:

Product: Your product or service
Price: What you will charge for it
Place: The path your product will travel to get to the end user
Promotion: How will you let people know about it

Once you have addressed the 4P's of marketing for your product it is important to continually evaluate if your marketing plan is gleaning the results you had hoped for. If not you will need to re-tool your plan going forward.

For information and resources on business planning visit:

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) - Business Management Unit website at:

http://www.omafra.gov.on.ca/english/busdev/agbusdev.html
http://www.omafra.gov.on.ca/english/busdev/facts/08-051.htm

Subscribe to our OMAFRA Agricultural Business Update Newsletter at: http://www.omafra.gov.on.ca/english/busdev/news/index.html#agbus

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For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca