This module is designed to guide you through this process of creating a business plan and save you development time!

• Are you considering expanding into a different area of agritourism?  And want to know more about what would be involved, how to manage it, and what expenses and profits are realistic?  
• Have you been asked to submit a business plan for obtaining a loan or applying for a grant?  
• Do you want a business plan for your farm or agritourism operation but find that writing one is overwhelming?  There are too many sections and you’re unsure what type and how much information goes into it? 

You might only have a vague idea of what you want your business to be someday and need some assistance in thinking through the challenges and possibilities of today’s business environment before you can begin to develop a business plan.  Starting a small business or even taking the risk to expand your current operation can be tough and overwhelming!  

In-Person Resources
Do your research and learn what you can about your business idea.  You may benefit from talking with others.  Friends and family often have their “insights” to share with you but you may benefit from discussions with your banker or other trusted financial and business professionals.  The Michigan Small Business Development Center has a team of business consultants that provide one-on-one consulting, business education, market research and technology commercialization to entrepreneurs in all 83 counties.  The Michigan SBDC will connect you with insight and resources to help your small business succeed.

What is a Business Plan?

Implementing change to a business is a major deal. Change takes time, money, resources, and a degree of emotional stress. A business plan can help you “think through” your decision and ultimately give you confidence that the decision was a viable one and right for your business.

Before you can develop a business plan you have to ask yourself, and your family, key questions.

• What are your goals for the farm? Goals can change depending on what you feel you can offer to the public and current market trends.
• What crops do you want to grow now and in the future?
• What type(s) of agricultural or agritourism operation appeals to you? Have you researched these areas?
• Do you have the time needed to develop and manage that area of operation? Do you want or accept the lifestyle required to successfully manage that area?
• Have you done a SWOT analysis for your farm or agritourism operation that includes growing conditions and the market?

Once you’ve worked through the initial planning process of going through ideas, questioning them, and evaluating them for viability, it’s time to begin creating your business plan. Undoubtedly you will continue to think through and evaluate your ideas.

Developing a business plan helps you get the ideas out of your head and onto paper (or the computer!). This is especially important should something happen to you and others must step in to manage your operation.

A business plan demonstrates that you have thought through your business operation with an eye for success. It shows that you know your business, how to manage the various facets of your operation, and what it takes to make it successful.

Overall, a business plan is essential for the long-term success and sustainability of a farming operation. It provides clarity, direction, and a solid foundation for strategic decision-making.

Who Develops the Plan?

A business plan for your farm needs to be written by you. The owner/ manager/ farmer-in-charge is the person who understands the business and the direction it is going. You know what you want to do or not do on your farm. You are the expert on your operation.

Most farmers already have a plan in their mind; they know what they’re doing. They are just not keen on stopping to develop a written plan. Sadly, there is no “easy business plan” button to push.

How Many Business Plans are Needed?

You can develop a business plan for your entire farming business that has sections for various areas of operation, or you can develop an individual plan for each area of operation. For example, a fruit farm with a u-pick component may want a business plan that covers all the fruit production but also sections or separate business plans on the u-pick operation for each type of fruit. There could be a major difference in the approach, marketing, staffing, and resources needed between u-pick apples and u-pick strawberries.

Business Plan Pitfalls

Cornell Cooperative Extension (Pashow, 2024) has identified common pitfalls to avoid when writing your plan.

• Too much detail
• Graphics without substance
• No executive summary
• Inability to communicate plan
• Infatuation with product or service
• Focusing on production estimates
• Technical jargon
• Lack of commitment

If you search online for “how to write a business plan” you’ll find literally millions of online resources from finance companies, banks, universities, training and performance companies, government institutions, and other sources. Some are free, some charge fees, and some resources are better than others. There are less resources tailored to developing a plan for agriculture and small farms, and even fewer are designed to support agritourism. Remember that you can mix and match formats to suit your needs and situation. Below are several to examine.

Artificial intelligence (AI)

Generative AI tools such as ChatGPT and others can keep you from feeling overwhelmed by the business plan writing process and help you think through business concepts. These tools are especially useful for taking ideas that you provide and converting them into polished text.

According to LivePlan (related to BPlans below), the best way to use AI for your business plan is to leverage it as a collaborator and not as a replacement for human creative thinking and ingenuity. A business plan is more than a document – it’s a process of thinking through your business which is best done by you, not AI.

There are pros and cons of using AI to help with your business plan. Examples of AI’s shortcomings include getting facts wrong, providing unrealistic or any innovative ideas, misunderstanding the agritourism industry and ag sector, and lacking creativity.

However, AI is great for research, summarizing, polishing text, analyzing data, and keeping you focused on the process. AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers and work within your operation. So, spend some time understanding how it can be most helpful before using it. AI is a great assistant, but creating a business plan is not a job to outsource to AI.

BPlans

BPlans is an online resource that provides guidance and solutions for small business and entrepreneurs on how to start, plan, fund, and grow your business. Their content is free, and they have resources on how to write a business plan as well as other general business and finance articles.

They currently (Spring 2024) have 16 sample business plans for the ag sector that can give you ideas. Samples include: Agriculture Farm, Agriculture Fruit Farm, Horse Training, Produce Farm, Vineyard Bed and Breakfast, and an Agritourism Farm Stay.

For more information on this resource, please visit:
https://www.bplans.com/farm-and-agriculture-business-plans/

Cornell University

The Small Farms Program at Cornell University’s College of Agriculture and Life Sciences offers over 30 online courses to aid aspiring, new, and experienced farmers. One of their courses is: BF 202: Writing a Business Plan. Note that there is a fee to take their courses.

At the end of the course, you will have a full business plan in a format ready to be implemented on the farm. The business plan may be used to guide you in decision-making while running the farm business. Additionally, the business plan will be in a format ready to submit to a banker, private investor or grantor in the event you are seeking outside funding.

Topics covered include: 1) getting started on a farm business plan, 2) mission statements and goal setting, 3) operations/tactical planning and budgeting, 4) business development and income statements, 5) business organization, and 6) income statements, balance sheet and common loans and grants.

For more information about this course, please visit: https://smallfarmcourses.com/p/bf-202-writing-a-business-plan

AgPlan – University of Minnesota

AgPlan is a FREE, easy-to-use business planning app designed to provide customized assistance for different types of businesses, including agritourism. It was developed by the Center for Farm Financial Management, College of Food, Ag, and Natural Resource Sciences, University of Minnesota to guide farmers and managers in financial management and help them grow their financial skills. This popular resource has the support of other national university extension offices.

The app (https://agplan.umn.edu/) allows you to:

• Develop your own Business Plan
• Learn what you need to include in your plan with Tips & Resources
• View Sample Plans for ideas
• Share your Plan — print, download and work with your own reviewers (such as family members or experts)

There are different templates to choose from such as Ag-Commodity, Ag-Value-Added, Agritourism (new), Organic Transition, Personal Plan, and Small Business. You can create a large, whole farm plan with subsections for your various areas of operation, or individual plans for each area of operation. There are tutorials for developing each section. There are also videos on how to develop each of the seven sections (see reference list below).

Your plan is housed on the AgPlan website though you can export it at any time. It is secured and private, the AgPlan staff can only see your name but not your plan. You can create your business plan in Word or Excel and import it and any attachments such as contracts, lease agreements, maps, and financial analyses to AgPlan. Note that you need to review or update it at least every two years or your plan will “expire” from their system.

Below are representative content templates tailored for a whole farm business plan and an agritourism operation.  They can be customized to fit the specific needs and vision of your business.

Farming Operation

1. Executive Summary

• Overview of the farming operation
• Summary of key objectives and goals
• Brief description of products or crops
• Financial highlights and funding requirements

2. Business Description

• Mission statement highlighting the purpose of the farming operation
• Vision statement outlining long-term goals
• Legal structure (e.g., sole proprietorship, LLC, partnership)
• Location and size of the farm
• Description of the land (soil quality, topography)
• Overview of farming practices (organic, conventional, sustainable)

3. Market Analysis

• Analysis of the agricultural industry
• Identification of target markets (local consumers, restaurants, wholesale markets)
• Demand for products or crops
• Analysis of competitors (other local farms, imported products)
• SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)

4. Products or Crops

• Description of products or crops grown on the farm
• Varieties and species
• Seasonality of crops
• Yield projections
• Certifications or quality standards (organic, non-GMO)

5. Production Plan

• Crop rotation plan
• Irrigation and water management practices
• Soil management and fertility practices
• Pest and disease management strategies
• Harvesting and post-harvest handling procedures

6. Marketing and Sales Strategy

• Marketing channels (farmers markets, CSA subscriptions, online sales, wholesale)
• Branding and packaging
• Pricing strategy
• Promotional activities (farm tours, workshops, social media)
• Customer relationship management

7. Operations Plan

• Equipment and machinery inventory
• Labor requirements (seasonal workers, full-time staff)
• Health and safety protocols
• Storage and transportation logistics
• Supply chain management (seed suppliers, input providers)

8. Financial Projections

• Startup costs (land acquisition, infrastructure development, equipment purchase)
• Operating expenses (labor, utilities, maintenance)
• Revenue projections (based on crop yields, market prices)
• Break-even analysis
• Cash flow projections
• Financing requirements (funding sources, repayment terms)

9. Risk Management

• Identification of potential risks (weather-related risks, market fluctuations, pests and diseases)
• Strategies for mitigating risks (crop insurance, diversification of crops, integrated pest management)
• Contingency plans for unforeseen events (crop failures, economic downturns)

10. Appendices

• Detailed financial statements (income statement, cash flow statement, balance sheet)
• Soil test reports
• Crop rotation schedules
• Certifications and licenses
• Any additional supporting documents

Agritourism Operation

1. Executive Summary

• Introduction to the agritourism venture
• Overview of the business concept
• Description of the target market
• Key financial projections
• Funding requirements

2. Business Description

• Mission statement highlighting the goals of the agritourism business
• Vision statement outlining the long-term objectives
• Legal structure (e.g., sole proprietorship, LLC, partnership)
• Description of the location and facilities
• Overview of the products and services offered (farm tours, workshops, farm stays, etc.)
• Founding team and their roles

3. Market Analysis

• Analysis of the agritourism industry
• Identification of the target market (families, school groups, tourists, etc.)
• Demographic profile of target customers
• Analysis of competitors (other agritourism farms, recreational facilities, etc.)
• SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)

4. Agritourism Activities

• Detailed description of agritourism activities offered
• Farm tours (educational tours, guided tours, self-guided tours)
• Hands-on experiences (pick-your-own, animal feeding, harvesting)
• Workshops and educational programs (cooking classes, gardening workshops, farm-to-table experiences)
• Events and festivals (farmers markets, seasonal celebrations, special events)

5. Marketing and Sales Strategy

• Target customer segments and their preferences
• Marketing channels (website, social media, local tourism boards, partnerships)
• Promotional activities (discounts, special offers, loyalty programs)
• Pricing strategy for different agritourism activities
• Sales process (online booking system, reservations, walk-ins)
• Partnerships with local businesses (restaurants, hotels, tour operators)

6. Operations Plan

• Operating hours and seasons
• Staffing requirements (farmhands, tour guides, educators)
• Health and safety protocols
• Maintenance of facilities and equipment
• Supply chain management (sourcing of produce, merchandise)

7. Financial Projections

• Startup costs (land acquisition, facilities construction, equipment purchase)
• Operating expenses (staff salaries, utilities, insurance)
• Revenue projections (based on visitor numbers, activity fees, merchandise sales)
• Break-even analysis
• Cash flow projections
• Financing requirements (funding sources, repayment terms)

8. Risk Management

• Identification of potential risks (weather-related risks, liability issues, market fluctuations, labor)
• Strategies for mitigating risks (insurance coverage, safety protocols, diversification of activities)
• Contingency plans for unforeseen events (natural disasters, economic downturns)

9. Appendices

• Detailed financial statements (income statement, cash flow statement, balance sheet)
• Marketing materials (brochures, flyers, advertisements)
• Permits and licenses
• Legal documents (leases, contracts)
• Any additional supporting documents

General

___. (n.d.). [BUSINESS PLAN TEMPLATE]. https://www.canr.msu.edu/youth_entrepreneurship/uploads/files/BusinessPlan.pdf
A simple “fill-in-the-blank” template developed by Michigan State University Extension.  Though designed for youth it can provide you with things to think about as well as prompts.

AgPlan. (n.d.). https://agplan.umn.edu/
Main website and registration for using the software.

AIANTA. (2020, September 12). Creating an agritourism business plan. https://www.aianta.org/creating-an-agritourism-business-plan/
Though written with a Native American perspective, the steps and explanations given for creating a business plan hold true for most agritourism operations.  

Michigan Small Business Development Centers Guide to Starting and Operating a Small Business (pdf)

https://www.michiganbusiness.org/4a8307/contentassets/9e9d0c936ff44225b270b26abec9208f/mi-sbdc-english-fullbook.pdf
This excellent booklet was developed by the Michigan Small Business Development Center and has state-specific information.  The sections are: 1) Starting a Business; 2) Michigan SBDC Business Plan Outline; 3) Business Legal Issues; 4) Financial Management; 5) Marketing Your Business; and 6) Hiring Your First Employee.

Michigan Small Business Development Centers (SBDC) (In-person assistance)

https://michigansbdc.org/get-started/start-a-business/
The Michigan SBDCs provide a team of business consultants to assist you at no cost on a wide variety of business topics.

Michigan Small Business Development Centers Locations

https://www.sba.gov/local-assistance/resource-partners/small-business-development-centers-sbdc#find-an-sbdc-in-your-area
Find assistance and counseling in your area to start, run, or grow your business.  Main office located in Detroit with additional offices within Michigan and near the Indiana and Ohio state lines.

Michigan Small Business Training & Events

https://michigansbdc.org/get-started/training-events/
The Michigan SBDCs offer practical small business guidance, delivered both live and on-demand.  Register for upcoming webinars and workshops near you to learn more about running and growing your business.  Many are free.  There are also a variety of e-learning courses and webinar recordings, so you can learn at your own pace, on your own schedule.

Pashow, L. (2024, June 25). Developing an Agritourism Business Plan (#17). Agritourism Fact Sheets. https://cornell.app.box.com/s/56rvu86ctbepnezwv1vbobm8wjdpoi5v/file/1571219104279

U.S. Small Business Administration 

Business Guide. (n.d.). U.S. Small Business Administration. https://www.sba.gov/business-guide
An excellent resource from the SBA that covers many topics important to small business owners within the categories of planning, launching, managing, and growing your business.  Contains general small business information as well as information specific to Michigan.  

U.S. Small Business Administration – Michigan District

https://www.sba.gov/district/michigan
Provides help with SBA services including funding programs, counseling, federal contracting certifications, and disaster recovery.  They can also connect you to their partner organizations, lenders, and other community groups that help small businesses succeed.

How-to Videos on the Seven AgPlan Sections

Global Agritourism Network. (2024, January 29). Business planning for agritourism enterprises [Video]. YouTube. https://www.youtube.com/watch?v=cr0V_rhUO58
An overview of the AgPlan software product (webinar recording).

Global Agritourism Network. (2024b, February 14). Session 1: Business Planning for Agritourism Enterprises [Video]. YouTube. https://www.youtube.com/watch?v=8JbRUp29160

Global Agritourism Network. (2024d, February 22). Session 2: Business Planning for Agritourism Enterprises – Operations [Video]. YouTube. https://www.youtube.com/watch?v=RmHAYutTb6k

Global Agritourism Network. (2024e, March 1). Business Planning for Agritourism Enterprises: Session 3 – Marketing [Video]. YouTube. https://www.youtube.com/watch?v=g56sLeb57Rk

Global Agritourism Network. (2024b, March 8). Business Planning for Agritourism Enterprises: Session 4 – Management & Organization [Video]. YouTube. https://www.youtube.com/watch?v=PkPMPCxCRyg

Global Agritourism Network. (2024e, March 15). Business Planning for Agritourism Enterprises: Session 5 – Financials [Video]. YouTube. https://www.youtube.com/watch?v=0x1DUO25zsU

Global Agritourism Network. (2024d, March 21). Business Planning for Agritourism Enterprises: Session 6 – Executive Summary [Video]. YouTube. https://www.youtube.com/watch?v=flRvpNOO5rw

Global Agritourism Network. (2024e, March 29). Business Planning for Agritourism Enterprises – Closing session [Video]. YouTube. https://www.youtube.com/watch?v=QvPUoA8aFDE

Planning for the Future of Your Farm Series (factsheets)

Disclaimer:  Keep in mind that some of this information adheres to Ohio’s laws and regulations but much is generic and applicable to most farmers.  These factsheets can give you a basic understanding of the topic and point you in the direction for further research.  State and federal laws continue to change.  It is best to follow the advice and guidance of your (Michigan) team of professionals.

Internal Revenue Service. (2022). GIFTING ASSETS PRIOR TO DEATH. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/6_Gifting.pdf

Moore, R., Kirk Hall, P., Bachelor, E., Moore, K., OSU’s Agricultural & Resource Law Program, & Wright & Moore Law Co. LPA. (n.d.). THE PLANNING FOR THE FUTURE OF YOUR FARM BULLETIN SERIES. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/0_PlanningForTheFutureSeriesOverview.pdf

Ohio. (2022). THE FINANCIAL POWER OF ATTORNEY. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/2_FinancialPOA.pdf

Ohio State University Extension. (2022). FARM TRANSITION AND ESTATE TRANSITION PLANNING: WHAT IT IS AND WHAT TO EXPECT. In PLANNING FOR THE FUTURE OF YOUR FARM. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/1_WhatToExpect.pdf

Ohio State University Extension. (2022b). USING BUSINESS ENTITIES IN FARM TRANSITION PLANNING. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/8_BusinessEntities.pdf

Ohio State University. (2022). WILLS AND WILL-BASED FARM TRANSITION PLANS. In PLANNING FOR THE FUTURE OF YOUR FARM. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/4_Wills.pdf

PLANNING FOR THE FUTURE OF YOUR FARM. (2022). STRATEGIES FOR TREATING HEIRS EQUITABLY. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/9_TreatingHeirsEquitably.pdf.pdf

Unknown. (2022a). STRATEGIES FOR TRANSFERRING EQUIPMENT AND LIVESTOCK. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/10_EquipmentLivestock.pdf

Unknown. (2022). USING TRUSTS IN FARM TRANSITION PLANNING. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/PlanningforFuture/7_Trusts.pdf

Farm & Agriculture Business Plan Examples – BPlans. (n.d.). Bplans: Free Business Planning Resources and Templates. https://www.bplans.com/farm-and-agriculture-business-plans/

Lavinsky, D. (2024, April 17). Farm Business Plan Template. Growthink. https://www.growthink.com/businessplan/help-center/farm-business-plan

Nickel, R. (2018, February 8). 11 steps to a Whole-Farm plan. Successful Farming. https://www.agriculture.com/farm-management/business-planning/11-steps-to-a-whole-farm-plan

Parsons, N. (2023, October 25). Best Practices for using AI to write a business Plan – LivePlan. LivePlan Blog. https://www.liveplan.com/blog/collaborate-with-ai-on-business-plan/?deviceId=5190c7cb-0803-4f78-8762-e5c04df0c5f6&__hstc=246577179.f354069d0651251c88385b8d4c1484bb.1713819272736.1713819272736.1713819272736.1&__hssc=246577179.1.1713819272736&__hsfp=2160068541

Parsons, N. (2023a, August 16). The Pros and Cons of using AI for business Planning – LivePlan. LivePlan Blog. https://www.liveplan.com/blog/the-pros-and-cons-of-using-ai-for-business-planning/?deviceId=5190c7cb-0803-4f78-8762-e5c04df0c5f6&__hstc=246577179.f354069d0651251c88385b8d4c1484bb.1713819272736.1713819272736.1713819272736.1&__hssc=246577179.1.1713819272736&__hsfp=2160068541

Pashow, L. (2024, June 25). Developing an Agritourism Business Plan (#17). Agritourism Fact Sheets. https://cornell.app.box.com/s/56rvu86ctbepnezwv1vbobm8wjdpoi5v/file/1571219104279

Proscia, M. T. a. M. (n.d.). BF 202: Writing a Business Plan. Cornell Small Farms Program. https://smallfarmcourses.com/p/bf-202-writing-a-business-plan

Write your business plan. (n.d.). U.S. Small Business Administration. https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan