Agricultural Business Plan Template
If you want to start an agricultural business or expand your current agricultural business, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of agricultural business plans.
The following agricultural business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want.
Sample Agricultural Business Plan
I. Executive Summary
Business Overview
[Company Name] is a new agricultural business that produces crops for [location] and the surrounding area. [Company Name] will specifically grow root vegetables, including potatoes, onions, and beets. The company will work hard to grow these vegetables organically and without any chemicals. We will sell our produce at local farmer’s markets as well as to local restaurants and other establishments that would like to use or sell our produce.
Products Served
[Company Name] grows a variety of root vegetables for [location] and the local community. All produce will be organically grown. We alternate our crops, so the exact crops that are grown will be dependent on the season and current crop cycle. Some crops that we plan to grow include the following:
- Potatoes
- Onions
- Beets
- Carrots
- Garlic
- Radishes
Customer Focus
[Company Name] will primarily serve the residents and businesses of [location] and the surrounding areas. Any individual or establishment that is interested in purchasing our crops is welcome to partner with us. We will sell our crops to individuals at local farmer’s markets and directly to wholesalers, grocery stores, and restaurants.
Management Team
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [Founder’s Name] has been a farm operations manager for the past [X] years, bringing a plethora of knowledge and skills that will prove to be invaluable to all aspects of the business. After working as a farm operations manager, [Founder’s Name] desired to run his own agricultural business that grows organic produce and benefits the local community. He will utilize his prior knowledge and experience to manage crop production, operations, and other aspects of the business.
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- There is currently a high demand for quality produce in the community, specifically organic produce grown by local agricultural businesses.
- The management team has a track record of success in the agricultural industry.
- The crop production business (and the agricultural industry in general) is a proven business and has succeeded in communities throughout the United States.
Financial Highlights
[Company Name] is currently seeking $750,000 to start the company. Specifically, these funds will be used as follows:
- Land: $200,000
- Equipment: $200,000
- Working capital: $350,000 to pay for marketing, salaries, and other costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new agricultural business that produces crops for [location] and the surrounding area. [Company Name] will specifically grow root vegetables, including potatoes, onions, and beets. The company will work hard to grow these vegetables organically and without any chemicals. We will sell our produce at local farmer’s markets as well as to local restaurants and other establishments that would like to use or sell our produce.
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [Founder’s Name] has been a farm operations manager for the past [X] years, bringing a plethora of knowledge and skills that will prove to be invaluable to all aspects of the business. After working as a farm operations manager, [Founder’s Name] desired to run his own agricultural business that grows organic produce and benefits the local community. He will utilize his prior knowledge and experience to manage crop production, operations, and other aspects of the business.
[Company Name]’s History
[Founder’s Name] incorporated [Company Name] as an S-corporation on [date of incorporation]. The operations aspects of the business will be run from [Founder’s Name]’s home, while the agricultural aspects will be run from the land purchased for crop production.
Since incorporation, the company has achieved the following milestones:
- Found land to grow the crops and wrote a letter of intent to purchase it
- Developed the company’s name, logo, and website
- Determined agricultural equipment and inventory requirements
- Began recruiting key employees with experience in the cultivation industry
[Company Name]’s Products/Services
[Company Name] grows a variety of root vegetables for [location] and the local community. All produce will be organically grown. We alternate our crops, so the exact crops that are grown will be dependent on the season and current crop cycle. Some crops that we plan to grow include the following:
- Potatoes
- Onions
- Beets
- Carrots
- Garlic
- Radishes
III. Industry Analysis
The crops and products grown by local farmers and crop production companies are essential to the health of local communities. They provide jobs to the locals and result in locally grown food that the nearby residents can purchase. Larger agricultural businesses do not offer these benefits to smaller communities. Because of this, there has been a greater demand and emphasis on the sustainability of local agricultural companies that can directly benefit the local community.
Furthermore, local communities are demanding that crop production and other agricultural companies grow their products organically. Organic foods are much healthier for individuals to eat because they provide more nutrition and aren’t laced with chemicals. Improved technology and research into organic methods are making this form of crop production more profitable and sustainable.
Therefore, with the increasing demand for local organic farms, we are confident that [Company Name] will succeed in the local market and benefit [location].
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the industries and community residents of [location] and its surrounding areas. We will sell our produce at farmer’s markets to individuals and directly to establishments that wish to partner with us.
Customer Segmentation
The Company will primarily target the following customer segments:
- Individuals: We will market our brand and sell our produce to individuals of the local community through farmer’s markets and similar events.
- Restaurants: Local restaurants are eager to create dishes that utilize produce grown locally. We will partner with these restaurants to showcase our produce to the community and increase our brand awareness.
- Grocery stores: Many local grocery stores showcase local manufacturers and agricultural businesses. We will partner with them to offer small displays where customers can find and buy our produce.
V. Competitive Analysis
Direct & Indirect Competitors
The following farms and agricultural businesses are located within a 50-mile radius and, therefore, directly or indirectly compete with [Company Name].
AgraFarm
AgraFarm is one of the largest raw food manufacturers in the U.S., owning a 15,000-acre farm for agriculture. It has well-established connections with big FMCG companies and has been thriving in the industry for 12 years. It also has automated equipment and machines, which helps in improving its operations and reducing costs. AgraFarm is also known for delivering large orders at the right time without delay.
BDA Farms
BDA Farms was established in 1998. BDA Farms is a very well-known company that provides good quality organic produce to companies. It also has a very good brand value, and its product packaging is second to none. BDA Farms is located in [location], and it has a very effective distribution and supply chain network.
BeetFarms
BeetFarms was initially a beets producer company and then branched out to other vegetables. BeetFarms is now one of the ten largest vegetable producers in the state. The Company’s packaging and processing units are located in [location]. It has recently acquired other local vegetable producers, expanding its operations as well as limiting the variety of farms producing vegetables for the community.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include the following:
- Management: [Company Name]’s management team has years of experience in agricultural operations, which will prove invaluable to all aspects of the business.
- Relationships: Having lived in the community for [X] years, [Founder’s Name] knows all of the local leaders, media, and other influencers. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
- Quality products at affordable pricing: [Company Name] will provide quality products at affordable pricing, as it has high-quality equipment and uses the latest techniques.
VI. Marketing Plan
The [Company Name] Brand
[Company Name] seeks to position itself as a respectable, middle-market competitor in the crop production and agricultural industries. Customers can expect high-quality root vegetables that are affordable and nutritious.
The [Company Name] brand will focus on the Company’s unique value proposition:
- Production of high-quality organic produce
- Affordable pricing
- Providing excellent customer service and customer experiences
Promotions Strategy
[Company Name] expects its target market to be individuals and local establishments in the food industry. [Company Name]’s promotions strategy to reach the audience includes:
Website/SEO
[Company Name] will develop a professional website that showcases pictures of the farm and the products we will grow. It will also invest in SEO so that the company’s website will appear at the top of search engine results.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. [Company Name] will advertise its company offerings in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Public Relations
[Company Name] will hire an experienced PR agency/professional(s) to formulate a compelling PR campaign to boost its brand visibility among the target audience. It will look to garner stories about the company and its services in various media outlets like television stations, radio shows, etc.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of various forms and technologies of commercial cultivation and post customer reviews that will increase audience awareness and loyalty.
Industry Events
By attending regional farming conferences, association meetings, and symposia, [Company Name] will network with industry leaders and seek referrals to potential customers. [Founder’s Name] will often attend with the assistant manager, but both may attend separately in the future as they gain experience in this networking.
Direct Mail
The company will use a direct mail campaign to promote its brand and draw customers, as well. The campaign will blanket specific neighborhoods with simple, effective mail advertisements that highlight the credentials and credibility of [Company Name] as a high-quality crop production business.
Pricing Strategy
[Company Name]’s pricing will be competitive. Pricing will be about 50% lower than retail prices to allow wholesalers and retailers to earn their margins.
VII. Operations Plan
Functional Roles
In order to execute [Company Name]’s business model, the Company needs to perform several functions, including the following:
Agricultural Functions
- Prepare the soil in between growing seasons
- Tend and harvest crops
- Oversee farmhands
- Operate and maintain farming machinery
- Package produce
- Sell crops to retailers and farmer’s markets
Administrative Functions
- Marketing functions
- Bookkeeping
- Social media and website management
- Connect with local retailers and farmer’s markets
- Hire and train staff
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [Founder’s Name] has been a farm operations manager for the past [X] years, bringing a plethora of knowledge and skills that will prove to be invaluable to all aspects of the business. After working as a farm operations manager, [Founder’s Name] desired to run his own agricultural business that grows organic produce and benefits the local community. He will utilize his prior knowledge and experience to manage crop production, operations, and other aspects of the business.
Hiring Plan
In order to launch the business, we will also hire the following additional employees:
- Administrative Assistant or Virtual Assistant (1 to start)
- Assistant Manager (1 to start)
- Farmhands (2 to start)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sales of root vegetables to its customers and local food establishments.
The major cost drivers for [Company Name] will be labor expenses, land purchase, equipment purchases and maintenance, and marketing expenses.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $750,000 to start the company. The capital will be used for funding capital expenditures and land and equipment purchases, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
- Land purchase: $200,000
- Equipment purchase and maintenance: $200,000
- Working capital: $350,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Acreage for Crops | 300 |
|---|---|
| Number of customers per month | |
| FY1 | 50 |
| FY2 | 75 |
| FY3 | 100 |
| FY4 | 125 |
| FY5 | 150 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
