Posted on December 1, 2018 @ 03:27:00 PM by Paul Meagher
Yesterday I picked up a couple of thin books on creating business plans. I am hoping this will motivate me and remind me of of the elements to include in my farm business plan. I intend to do most of the plan write up in December. I think December is a great month for business planning as January 1, 2019 is a natural choice to start implementing a business plan. December often marks the end of of fiscal year for tax reporting purposes and you can be starting to figure out what you earned and spent in the last year and use that to help in your planning.
The plan that I am developing with my wife will map out what we will do in the next 3 years to establish an estate winery operation on our farm (where wine is produced and sold on the farm). We have been gearing up for this by planting grape vines for the last few years, but to date we haven't created a formal business plan for how we expect this venture to unfold in the next 3 years.
Often you will need to create a business plan to obtain financing as the funder needs some idea of what you hope to accomplish, when, how much it will cost, how you will promote it, and what you expect to earn as profit. In our case, we need to formulate a business plan as part of a winery registration process. Funding and registrations are popular reasons for needing a business plan.
One element of a farm business plan that you might not see included in other types of plans is a section labelled "Holistic Context". Here the decision makers agree on a set of statements about values and constraints that they need or wish to operate under. Stating your holistic context explicitly can serve to setup valuable constraints on how the rest of your business plan will be formulated. Holistic context statements help to ensure that your plan is realistic with respect to values and the constraints of capital, time, machinery, etc... that the partners have to dedicate to the venture.
If traveling each year, for example, is really important to the partners, and this is included as one of your holistic context statements, then that constraint makes it harder to raise animals that might require 24 hour care 365 days a year. The farm owners state their holistic context so that they don't run into conflict in their business planning and how they run the operation. I wouldn't necessarily include an holistic context section in a business plan that I would be presenting for funding, but in the context of a registration process I think it makes more sense to do.
You can learn about how to formulate Holistic Context statements in
How To Write A Holistic Context: A Step By Step Guide. Ridgedale Permaculture provides an example of a well fleshed out set of Holistic Context statements (scroll down the page to view them). To be honest, I wasn't very by-the-book in coming up with my holistic context statements. I viewed the excise of coming up with some holistic context statements as a useful way of identifying constraints on how the business plan should be put together; otherwise, it is too open ended and only guided by what is good for the business. That can lead to an unrealistic plan for the owners if it doesn't match their holistic context.
The purpose of this blog is to remind entrepreneurs that December is often a good month to write business plans that go into effect
January 1, 2019. I also wanted to share with you the idea of starting the business planning process by formulating Holistic Context statements. These statements can serve to make writing the rest of your business plan easier because they provide useful constraints on your overall business planning and your write up. If your plan only makes sense relative to your Holistic Context statements, then it might be useful to include it as a section of your business plan.