One of my favorite 1980s television series was “The A Team.” The colorful group of vigilantes and their amazing way of pulling things off within an inch of disaster always had me on the edge of my seat. One of the famous sayings that their leader Hannibal would often say is, “I love it when a plan comes together.” The ironic part of this statement is, more often than not, it seemed like they had no plan until the very last second when everything fell into place.
In 2010, the movie based on the television series was released, with the same colorful characters and a similar chaotic approach to solving crime. However, halfway through the movie, Hannibal admits to not knowing how to move forward and is about to give up when Face, one of the other A-Team cohorts, steps up and says he has a plan. The next few scenes show them putting painstaking detail into their plan to solve the crisis they face. And, in the end, the plan comes together to save the day.
A Plan Captures the Dream
Too often in many family businesses, our approach to business planning is more like the scenario that plays out in the television series than it is like the one depicted in the movie. We focus much of our time on the day-to-day activities involved in the operation, reacting to the emergencies at hand, and do not stop to think about where we want to be 25 years from now or even a year from now. If we do think about it, it is typically while we have a few hours of time in the field or in the barn to plan and dream. We then store those dreams away in our head but rarely put them down on paper. We also often avoid talking through those plans with our partners and others involved in the farm for fear that they might not share the same vision we have.
Benjamin Franklin once said, “If you fail to plan, you are planning to fail.” While this might seem like a harsh statement, there is truth to it. Statistics show that a business plan doubles your chance of survival and success. Furthermore, businesses with formal written plans in place are 12 percent more profitable that those without plans. Still, only 23 percent of companies use a formal planning process to make important strategic decisions shaping their future.
Although creating a formal business plan requires time and detail, it can be very beneficial, whether you are starting a new farm business, expanding your existing farm, adding a new enterprise, or even just protecting your existing business from volatility in the marketplace. Those who have taken the time to create a business plan find themselves with a new sense of clarity for where they are headed and what it will take to get there.
The Fundamentals of a Plan
Going through the business planning process can also build consensus and understanding among partners on your vision, mission, and goals for the business. Having that formal written business plan in place can help you navigate in times of disagreement or uncertainty in your business. Essentially, a business plan provides a roadmap to your business’ future.
Having a written plan can help you communicate business ideas to your business associates and employees, as well. A business plan can be helpful in securing loans, grants, and other funding. Many business plans include a financial analysis and risk management strategy, which can also help you manage your financial risks when prices fall.
The fundamental components of most business plans include a vision and mission for the business, your business goals, and information on business history, structure, resources, and ownership. The plan may also include an outline of products marketed and future expectations related to those products. A succession plan for bringing in additional family members or other partners may also be part of the plan.
As director of both the Center and our Dairy Excellence Foundation, I rely heavily on our business plans to move our organizations forward. Every three years, the Board of Directors from each organization meet to revisit our mission and vision to develop a strategic plan for the next three years. Our staff team then uses that strategic plan to craft our annual business goals that enable us to carry out the priorities identified by the board. We then use these goals as a barometer to assess our performance as individual team members and as an organization by comparing our activities to the objectives set forth by the plan. Honestly, without that planning process in place, I feel like we would really struggle as an organization and as a team.
We Can Help
To help more farms develop written business plans, the Center is partnering with the Penn State Extension Dairy Team and with AgChoice Farm Credit to offer two educational opportunities in the coming weeks. On Wednesday, April 21, the Center and Penn State are hosting a virtual Business Planning Roundtable from 1 – 3 p.m. for anyone who wants to learn more about the fundamentals needed to get started writing their own plan. On Wednesday, April 28, from 12 – 1 p.m., Phil Taylor, a business planning consultant from AgChoice Farm Credit, will join the Center’s monthly Protecting Your Profits webinar to show farmers how they can utilize a business plan to improve their operation.
Both events are free to attend, but those interested in the Roundtable on April 21 must pre-register. To register, go to www.centerfordairyexcellence.org/roundtable/ or call 717-346-0849. If you are interested in joining the Protecting Your Profits webinar, you can do so either through ZOOM or by conference call. To join, go to www.zoom.us and enter “848 3416 1708” as the Meeting ID and “474057” as the passcode. Alternatively, you can join via phone by dialing 1-646-558-8656 and using the Meeting ID and passcode provided above.
If you would rather talk to someone face to face about business planning, the Center will be hosting regional Business Planning Roundtables in person this fall across Pennsylvania. Details will be announced this summer. In the meantime, we can connect you with someone who may be able to sit down and help you write your own business plan if you don’t want to wait to get started. Call us at 717-346-0849 or email me at jsebright@centerfordairyexcellence.org.
Editor’s Note: This column is written by Jayne Sebright, executive director for the Center for Dairy Excellence, and published monthly in the Lancaster Farming Dairy Reporter.