How to Write Superior Livestock Business Plan

Create the Business Plan by making three main plans: Strategic Plan, Operating Plan, and a Succession Plan:

• Strategic Plan. This is where you tie in all your brainstorming thoughts, ideas, objectives and goals together from steps 2 to 4. Basically, the kind of business plan you would see other firms develop is the following:
  • Vision Statement: A statement of what you or your farm will look like in the next 5 to 10 years.
  • Mission: This determines or defines the purpose the organization attempts to perform in society. This statement should concisely explain what the company does, for whom and why.
  • Values: These are general standards or guidelines that are important to your farm and farm family.
  • Situational Analysis: This is the process of identifying and understanding how your business is positioned within the environment you operate, both internal and external. Step 3 is what this part of the strategic plan is all about.
  • Goals: What are the major achievements you would like to accomplish in the next 3 to 5 years?
    

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  • Objectives: How do you plan on achieving your goals?
  • Critical Success Factors: Areas of performance critical to long-term successes of an organization, and its development, growth and achievement. For each CSF you should define one or more Key Performance Indicators (KPIs), which are metrics you will use to determine if you are achieving your CSFs. CSFs are expressed as general statements of goals (“Maintain customer satisfaction.”) while KPIs are more specific (“Decrease in number of product packaging complaints.”)
  • Plan of Action: Strategies and actions that are implemented to meet the targeted objectives.
    • In a nutshell, you don’t have to go through the headache of answering all of the questions posted above. Instead, use the three simple questions above in Step 4 as a means to answer all 8 of these standard business-plan questions.
      

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• Operating Plan. This is the plan where you outline the day-to-day activities of the business including what gets done, how it’s done, who does it and when it’s done. This plan is generally shorter term and usually revolves around a production cycle. There are four sub-plans that are important to this plan: Production plan, Marketing plan, Financial plan, and Human Resources plan:
  • Production Plan: What will be grown or processed to be sold? For livestock producers this includes two main components: Animals, and Cropping systems. With the animals, this is where you lay out things like breeding, culling, weaning, care of newborn animals, herd health, etc. The second includes number of acres and type of commodity to be grown to support the herd (hay, silage, green feed, pasture, grain, etc.). Identify all types of enterprises on your farm.
    • Production resources are also important to mention: Land base, Equipment base, and Buildings and Structures.
  • Marketing Plan: Where and how will you sell your commodities? Remember, selling is just getting rid of what you have. When you market, you have to plan to sell commodities at a good price.
    

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  • Financial Plan: This includes budget analysis, revenues and expenses, debt, unpaid labour, opportunity costs, benchmark analysis of yourself from other operations, statements of cash flow, depreciation of machinery, animals, buildings, etc., wages, family living costs, etc.
  • Human Resources plan: Most farms rely on one worker (i.e., the owner) to run the operation. Nevertheless, human resource plans should highlight hiring issues facing the business and how to address them. It should further describe the kind of people that are required to operate the business (general responsibilities, title, skills, availability and any training programs needed.)
  • Quality plan: Quality control is the ability to define what you will produce and the desired quality you must achieve in your products, establish the processes required to do so, continually check your product against quality parameters, recognize when you have not delivered the desired quality and have the means to improve your process activities to correct the issue and return your product to the desired quality. There are many quality frameworks and methodologies, but one of the simplest is Dr. W. Edward Deming’s Continuous Quality Improvement cycle. It has four steps, which are repeated continuously to gradually improve quality and process maturity over time.
    

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    • Plan: Establish the objectives for whatever it is you intend to do, the processes necessary to achieve those objectives, and the metrics and measurements required to control the processes and prove that the objectives are being achieved.
    • Do: Execute the plan and collect metrics and measurements along the way as defined in the previous phase.
    • Check: Review the results, metrics, and measurements and determine if any improvements can and should be made to the plan.
    • Act: Implement the improvements so the next time the process is executed the results will be better.
• Succession Planning. This can be the hardest part of a business plan, as one has to plan what should happen if the main operator is injured or worse, dies. Succession planning includes developing a continuity plan for your business and determining the process of transitioning a business to new owners. This transition may be an outside sale (equipment and land auction sale), or an inheritance sale (passing the business down to the next generation).
  

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