Do you want to start an agriculture farm on small scale? Looking forward to developing an agriculture farm business plan?
If yes, find in this article a sample business plan on agriculture farm which will help you in creating one of your own.
Before you start writing a business plan for the agriculture farm, it is worthwhile to mention that the executive summary section which comes first in the final plan document needs to be written after you finish writing all the other sections.
The executive summary is normally a 2 to 3-page document
Sample Agriculture Farm Business Plan
1. Executive Summary
Botanical Bounty is an existing farm dedicated to the production of botanical perennials. Botanical Bounty has been formed as an Oregon-based Limited Liability Corp. (L.L.C.) located outside of Albany, Oregon. Botanical Bounty is working hard to become a leading producer of botanical plants for the natural supplement industry as well as plant nurseries. By leveraging a well thought out business plan executed by a skilled management team, Botanical Bounty will generate over $216,000 in year three sales.
Keys to Success
Botanical Bounty has identified three keys that will be instrumental in their success. The first is the implementation of strict financial controls. By having the proper controls, production efficiency will be maximized. The second key will be the never ending pursuit for the industry’s highest concentration levels of botanical ingredients in each plant. The third key is the recognition and implementation of the philosophy that 100% customer satisfaction is required to ensure a profitable business. Profits are a by product of satisfying customers, not the other way around.
Botanical Bounty is a 10 acre farm that concentrates on the growing of botanical medicinals. Botanical Bounty has chosen five plant species that have significant market demand as well being well suited for growth in the Willamette River Valley. Botanical Bounty will feature: Echinacea – an immune system booster; Ginseng – a source of energy; St John’s Wort – for mild depression; Skullcap- for inflammation; and Ginger – a stomach soother.
Botanical Bounty has three distinct customers: supplement companies, processors of botanicals for supplement companies, and nurseries that resell the plants. The first two customers purchase the plants for use in their products which they ultimately sell to the end consumer. The market for natural supplements is quite exciting. Surveys show that over 158 million consumers (over 55% of U.S. population) use dietary supplements. An estimated 115.3 million consumers buy vitamins and minerals for themselves, and 55.8 million purchase them for other members of their family, including children. Consumer surveys consistently find that nearly half of all Americans now use herbs – a statistic that is particularly remarkable when we realize that today’s herbal products industry is just over a quarter century old.
Botanical Bounty will be lead by the husband and wife team of David and Sue Nealon. David brings a wealth of business and project management skills to the company. While working at Yahoo!, David was responsible for the successful launch and market lead capture of Yahoo!s driving directions section. Utilizing these skills, David will be responsible for the business operations of the farm. Sue, with a background of plant biology will be the driving force of the operation, growing the highest active ingredient content plants in the country. Additionally, because of her wealth of knowledge, she will be the leader of the sales department.
Botanical Bounty began as a hobby for David and Sue two years ago. Over the last two years they have worked out all of the bugs related to production. Additionally, they are now quite hungry to succeed, creating one of the premier botanical perennial farms in the country. To finance our growth and full-time production, we need to purchase $35,000 worth of new equipment as long-term assets. To that end, we are seeking a $100,000 10-year loan. Sales forecasts conservatively indicate that $190,000 revenue will be generated in year two, rising to $216,000 the following year.
The Botanical Bounty has identified several objectives for the business:
- Become a leading supplier of botanical perennials for the health/vitamin industry.
- Reach the point of sustainable profitability.
- Enjoy work while making a good living.
It is Botanical Bounty’s mission to become the leading provider of botanical perennials to the health/vitamin industry. This will be accomplished by providing quality plants at fair prices while exceeding customer’s expectations.
1.3 Keys to Success
Botanical Bounty will adhere to three keys that will be instrumental in its success:
- Strict financial controls.
- The never ending pursuit of the highest concentration of botanicals in every plant.
- Ensuring that all customer’s needs are met and they are satisfied with the purchased products.
2. Company Summary
Botanical Bounty is an Oregon based perennial farm that grows a variety of botanical medicinal perennials. The company has been formed as an Oregon L.L.C. The farm has been in existence for two years now, initially operating as a hobby as rather than a profit producing business.
2.1 Company History
Botanical Bounty has been in operation for two years. Initially it was started as a hobby where Susan could use her plant biology skills while covering some of the costs. The Nealon’s were able to achieve this lifestyle due to a windfall that David received as a result of exercised stock options. After the second year, the Nealon’s decided that although they had the money to live on for many years, it would be irresponsible to needlessly spend it so they got serious about the business and made a concerted effort to become profitable.
Botanical Bounty has chosen the Willamette River Valley as an ideal place to grow perennials. Botanical Bounty has 10 acres of land which they use for production. During several of the winter months, production is moved into their green house for propagation. Botanical Bounty employs a drip irrigation system for all of the plants.
2.2 Company Ownership
Botanical Bounty is an Oregon L.L.C. owned by David and Susan Nealon. The L.L.C. business formation has been chosen as a strategic way to shield the Nealons from personal liability.
Botanical Bounty offers a range of botanical perennials (plants where the root structure remains, allowing the plant to regrow every year). Botanical perennials were chosen for two main reasons. The first is the medicinal value that they offer, therefore the plants have a positive contribution to society by improving people’s health. The second reason is that the market for medicinal herbs is a very strong industry with excellent growth, ensuring demand for their plants. Botanical Bounty will offer the following excellent:
Echinacea was used extensively by Native Americans and the early settlers also adopted its use. It has been used for years in alternative medicine to support the immune system, and to purify the blood, especially during season changes and during the cold and flu season. Scientific studies have confirmed the presence of natural chemicals, echinacosides, which increase white blood cell activity.
Ginseng stimulates and increases endocrine activity in the body. Promotes a mild increase in metabolic activity and relaxes heart and artery movements. Stimulates the medulla centers and relaxes the central nervous system.
St. John’s Wort
St. John’s Wort has been used as a medicinal for thousands of years, but has only recently been studied for its medicinal value. Now proven to have many highly active compounds including rutin, pectin, choline, sitosterol, hypericin and pseudohypericin. The flowers and leaves are medicinal as analgesic, antiseptic, antispasmodic, aromatic, astringent, cholagogue, digestive, diuretic, expectorant, nervine, resolvent, stimulant, vermifuge and vulnerary. Some compounds of the plant have been shown to have potent anti-retroviral activity without serious side effects and they are being researched in the treatment of AIDS.
Skullcap is a powerful medicinal herb, it is used in alternative medicine as an anti-inflammatory, abortifacient, antispasmodic, slightly astringent, emmenagogue, febrifuge, nervine, sedative and strongly tonic. Some valuable constituents found in the plant are scutellarin, catalpol, other volatile oils, bitter iridoids and tannins. Scientific studies are proving this to be a valuable plant in many areas for mental disorders. Skullcap is used in the treatment of a wide range of nervous conditions including epilepsy, insomnia, hysteria, anxiety, delirium tremens, withdrawal from barbiturates and tranquilizers.
Ginger roots and dried herb are medicinal and edible, it has a spicy, hot, crispy, taste and can be eaten fresh in small quantities in salads, used as a relish, a condiment, or made into a sauce for meat, especially good on chicken, or used to make ginger candy. Widely used as an alternative medicine ginger contains the valuable constituent aristolochic acid, scientific study shows it to have anti-inflammatory, antiviral, antitumor activity, cures warts in some cases and is a broad-spectrum antibacterial and antifungal.
Botanical Bounty sells these excellent perennials in plant form for the botanicals to be extracted by their customers. Botanical Bounty concentrates on producing the healthiest plants which have the highest concentration of active botanicals.
4. Market Analysis Summary
Botanical Bounty has identified three main customer groups: supplement companies; botanical processors; and other nurseries. The customer segments are distinct enough to be able to target each one differently. The industry that Botanical Bounty produces for has been undergoing consolidation for several years now. Botanical Bounty will be able to serve the industry by leveraging their competitive edge of healthy, potent plants.
4.1 Market Segmentation
Botanical Bounty has identified three different target market segments which they will sell to:
This customer group manufactures botanical supplements for their own label products. The companies purchase the plants and extract the active ingredients and transform them into sellable products for their own brand. There are a handful of large companies that operate in this market space. Ten years ago there were many different ones but through consolidation the industry has grown in size but decreased in the number of different players.
These customers purchase the the plants, extract the botanicals and either sell the concentrated botanicals to the end producers or they themselves produce the supplement and sell the final product to other companies for their private label products. In essence they are the subcontractor for the supplement companies. These companies therefore are one layer within the manufacturing system and do not sell to the end consumer. They act as a supplier/processor for the retail brands.
Other Nurseries/Garden Centers
This customer group purchases the plants which they in turn sell at retail to the individual end consumer. The typical consumer is a health conscious individual who is interested in either extracting the botanical from the plant immediately or growing the plant in their own garden for future use.
5. Strategy and Implementation Summary
Botanical Bounty will leverage their competitive edge in order to gain significant market share. Their competitive edge is their ability to consistently produce plants with high active botanical percentages as well as a high ratio of healthy plants (sellable).
The marketing strategy will have the objective of raising awareness and visibility of their industry-leading percentages of active botanicals. The strategy will communicate the fact that Botanical Bounty’s plants will yield a significantly higher amount of botanicals measured per plant.
The sales strategy, in addition to reinforcing the competitive edge, will seek to qualify leads by concentrating on Botanical Bounty’s ability to perform reliably on long-term contracts, becoming a stable supplier to the larger companies that need a steady supply stream.
6. Management Summary
The Botanical Bounty management team is made up of the husband and wife team of David and Sue Nealon. David studied at Pomona College, a small liberal arts school in central California. David graduated with a dual major of Business and Philosophy. David worked at a bicycle shop for a year before joining Yahoo! as employee number 34. David was a Project Manager and was in charge some business development activities. His first “home run” was the development, launching, and management of Yahoo!’s driving directions service. David recognized the value of providing people with precise, custom driving directions.
Initially is was a daunting task to develop revenue for this service which the individual users did not pay for, but David was able to generate sufficient advertising dollars specifically for his service. David was ultimately responsible for the entire project, providing him with a wealth of project management and operations skills. After this direction service became the market leader for this niche, David moved on to other projects at Yahoo! David spent a total of four years at Yahoo! providing him with a wealth of experience.
Sue Derent Nealon is the biology/horticulture manager for Botanical Bounty. Sue studied at the University of Oregon, first receiving her undergraduate degree in biology and later her Master’s in Plant Biology. Sue’s Master’s thesis was a dual thesis in plant fertility and herbal concentrations. The plant fertility topic was a study of different types of compost and the effects on fertility. The second topic explored the interrelationships of nutrients and temperature and the effect that they have on the plants’ production of the respective botanicals. The topics of her thesis were chosen based on her desire to continue with her education professionally as a grower.
After school Sue moved down to California to work at one of the largest indoor growing operations in California. Wanting to be closer to her parents, the Sue and David moved to the Willamette River Valley in Oregon in pursuit of Sue’s dream of running her own farm. For the first two years she ran the farm as a hobby, just figuring things out without a concern for profits. After several serious conversations, they decided to really make the farm a business.
Playing to their strengths Sue will manage the farming operations and sales, while David handles the business operations.
Starting an agriculture farm business if done properly has the potential to be a profitable venture. We hope this sample agriculture farm business plan will encourage you in starting your own venture.