Business Plan for an Organic Farm
Your proposal for the organic food business you would start; About the amount of interest in “going organic and natural” in America's eating habits. Your final plan must address the following: Who is your target market? What are its demographics? What lines of foods will you carry? It should be focused to your market with a small number of grocery items, each with its ability to sustain your customers' allegiance. Your final plan should include a proforma income statement showing estimated revenues and operating expenses, taxes, legal fees, marketing and advertising costs, etc. Also consider becoming a “locavore” food seller, meaning selling meats, produce, etc., from a radius of not more than, say, 50 miles. This is becoming important to millennials.
Your final business plan should have the following financial (simplified) statements (based on your reasonable assumptions of revenues and expenses): a cash-flow statement for at least six months; and a proforma (estimated) income statement for six months showing revenues and expenses and profitability (or losses).
IMPORTANT: Your business plan should emphasize a marketing strategy showing: demographics of your potential customers; an overview of the consumer trends affecting your business; a brief assessment of your competition (showing what the market wants, what the market gets, and what YOUR BUSINESS can provide). With this you are revealing your "sustainable competitive advantage." Your business plan should be about 75% in the marketing area and 25% in the financial projections area.
Example from Professor:
To give you some idea of what I look for in your Business Plan, below is my reaction to one student's business plan:
Marco: Received and reviewed your business plan for your restaurant in NYC. Your plan describes well your philosophy of providing "the depth of PR cooking." Good demographics shown in your plan with an eye toward growing revenues based on demographic expectations. Expecting full occupancy in your restaurant might not be realistic; 70 - 75% is more in line with reality. Your sales projections of $1.2 million could be high. It's also unusual to show a net income during the first few years of operations. I don't see any payroll taxes in your income statement; some good restaurants have moved toward paying the wait staff high wages (with tips being discouraged) in order to reduce turnover, which creates better service to customers, and true labor costs are therefore reduced. Even so, you'll have certain employees who will be paid wages which require payroll taxes on your part. Your plan is nicely presented with most aspects of a model business plan within. Grade on plan, 94/100.
Business Plan
Student’s Name
Institution
Date
Business Plan for an Organic Farm
A research conducted by Organic Trade Organization shows that the Americans are currently buying more organic food and household products than ever before. Statistics show that in 2016, the sale of organic food products and goods had increased by 8%, hitting $47 billion( Walker, O, & Ruekert ,. 2007). The total food sales in America are boosted by organic foods. People have chosen to go organic due to several reasons with the main reason being the avoidance of pesticides and chemicals or any hazardous thing that isn’t found in organics. (Walker, O, & Ruekert,. 2007).
Another reason is how organic foods are beneficial to the environment since they help protect the ozone layer. Fresh fruits, vegetables, meat and poultry products have been the most demanded organic products(Walker, O, & Ruekert ,. 2007). Although organic farming is faced with various challenges like the time needed for these products to grow, the number of farmers and the amount of land required, most people have ventured into it since the potential benefits in terms of profit are noticeable.
Executive summary
The organic farm will be a one acre farm that will be acquired by hiring. It will mainly focus on growing fresh fruits and vegetables. It will be based on the principle of conserving the environment and natural resources, hiring, growing and eating of local products. It will be created so as to meet the needs of the local community by doing retail sales and the expanding market. Its target will be individuals who are conscious of what they eat and feed their children. Since at first it can’t meet all the demands of the consumer market, it will collaborate with certified organic producers to bridge the gap. The development of e-commerce will enable the farm to reach a wider range of market in America with deliveries being done through third party agents until the enterprise is capable of doing deliveries. The purpose of the business plan is to provide guidance on the long and near term goals. It will be a tool that will gauge on how the farm will be doing in the future as compared the set targets so as to keep it on track. The business plan will also help lenders to understand the need for financing since it explains the use of funds and also facilitate debt repayment.
Mission
The mission of the business will be to be a major supplier of the freshest horticultural products in America and the larger market so as to be able to satisfy the needs of the customers and achieve excellent customer satisfaction.
Vision
To be the leading farm in terms of quality horticultural products both locally and globally.
Business objectives
To produce the most fresh indigenous organic products both locally and globally.
To develop the most effective farming strategy so as to increase production and meet the demands of organic horticultural products both locally and globally.
To understand the needs of organic products consumers and be able to meet them.
Business name
The name of the proposed business will be “Going natural” organic farm.
The industry
Organic food production is one of the fastest growing food sectors in America. Organic products are products grown or processed in accordance to the set standards by the United States department of agriculture. Demands by consumers for a wide variety of fresh horticultural products has led to the growth of the industry, making supermarkets and mass merchandisers increase their stock for organic products. Growth of the industry has led to a series of questions like who are the people buying these organic products? Understanding the major consumers can lead to increased profits to the members of the industry like retailers or farmers.
Products
The proposed business will start in April. It will mainly focus on products like carrots, tomatoes, garlic, melons, apples, onions, lettuce, spinach, kales and broccoli.
Planting schedule
The business will use a detailed planting schedule to ensure that there is a constant supply of products even during the summer and spring, which will involve the setting up of a greenhouse and a water system. Also, there will be planting of small bits of the products often to make the supply steady and plant more.
Product sourcing and distribution
Most of the indigenous products will be produced locally in the farm and the exotic ones will be obtained from suppliers. The initial target market is the local community consumers who will be able to acquire the products through a retail shop established in the farm. As the business expands it will establish an e-commerce that will be able to reach consumers globally with deliveries being made by the third party agent up to when the business can make its own deliveries. The distribution will be demand based whereby the products will be plucked from the farm when there is an order so as to ensure maximum freshness of the produce.
Future products
The business plans to start the sale of organic meat and meat products in the future by partnering with registered beef farmers to supply the product from a radius of not more than 50 miles from the farm. The long term plans are also to introduce organic dairy farming whereby an extra acre of land will have to be acquired
Market analysis.
America is composed of both high and low income earners. The growing consumer demand for organic food has led to the expansion of organic farming. Understanding consumer needs like what they are consuming, who is buying the products and the driving force for going organic helps a business in maximizing profits. Most of the research done shows that the consumers usually buy the organic products due to the taste, nutritional value, interest of trying something new and also the environmental benefits seen with the growing and consumption of organic products (Walker, O, & Ruekert ,. 2007).
A survey done in 2004, shows that people with an income of above $50,000 are the most common organic food purchasers. They mainly buy these products so as to avoid the medical expenses associated with the medical complications that come with the consumption of inorganic products since their income barely sustains them to include more expenses (Walker, O, & Ruekert,. 2007). Graduates and also people with children of less than 18 years are also believed to be organic food consumers. They have been sensitized on the benefits of organic products and wouldn’t want to predispose their children to the harm associated with inorganic produce. Another study shows that high income earners with less children were more likely to purchase organic products. The studies give us a guideway on our main targets who are the high income earners with more than $50,000, people with children of less than 18 years and graduates.
Industry analysis
Research shows that organic farming industry is capital intensive with an average annual revenue of an employee being $390, 000. Globally, the production of organic crops revenue is more than $1 trillion and the U.S is among the major producers. Larger farms have an advantage since they are able to get the latest technology in seeds and also equipment. Some of the major companies are Dole Food Company and Sunkist Growers. Smaller farms can compete with the big one by harvesting non-genetically modified products or specializing in specialty products.
Size of the market
According the nutritional journal, the sales of organic products in 2008 in the U.S were $21.1 billion, making it over 3% of the total sale of foods. The U.S alone has over 1 trillion farms whose revenue is about $205 billion. The main competitors ar...