It's easy to write your own cattle farming business plan, requiring little time or money. You can even make the process easier by downloading a free business plan template online or buying one from cattle farming consultant firms.
Creating a well-thought-out cattle business plan can make all the difference between success for the beginner farmer who makes one, and failure for the one that fails to write it.
This guide will help you create the perfect plan when starting your farm, even with little to no money.
Table of Contents
Reasons To Have A Business Plan
Having a workable business plan is important for the following reasons:
- It helps you raise capital from angel investors, relatives, friends, partners, and financial institutions like banks
- It acts as a living guide for the starting, implementation, operation, and ending of your cattle farm
- It helps keep all the involved persons in organic sync with the farm’s goals and objectives
- It boosts your chances of success with efficient management and acts as the stepping stone for a systematic record-keeping culture
- It helps you to theoretically analyze your business idea to measure its feasibility (practicality) and viability (success potential), and theoretically determine your strengths, weaknesses, opportunities, and threats (SWOT analysis)
- It helps you plan for growth and expansion along the same operational procedures or branching into directly and indirectly related lines of action, such as value addition to your products
How To Write The Perfect Cattle Farm Business Plan
Writing the perfect business plan for a cattle farm doesn’t have to be challenging, whether yours is set to be a small-scale farm or a complex one.
To write an operational business plan, you must include:
- Organizational plan
- Management plan
- Financial plan
- Operations plan
- Marketing plan
- Exit strategy
Let’s take a closer look at each of these aspects.
The organizational plan provides a detailed description of the business concerning the reason for its existence, goals, and objectives.
The mission and vision statements usually appear in the executive summary of formal business plans.
If yours is an internal-use-only plan, you could place the two items in the organizational plan or leave them out altogether. However, this second option runs the risk of losing sight of what your vision is for the farm.
The organizational plan basically answers the question, “What business am I in?”. You can answer this question by listing your intended products, services, location, market, and what makes your business unique.
You could raise animals for milk, value-added dairy products, beef production, and high-quality semen. You can also make money selling live animals as calves, lactating cows, pet cows, and bred heifers.
Cattle services aren’t so popular, but you could look into cow tourism/cattle farm agri-tours, cow cuddling/hugging therapy, and educating aspiring and practicing cattle entrepreneurs.
Your organizational plan should also list your short-term and long-term goals and objectives for the farm. These could be guided by your reasons for the establishment of the farm.
The management of most small farms is easy. The farm owner doubles up as the farm manager and field worker, eliminating the need for an elaborate management plan.
Sometimes, family farm owners may receive free or paid assistance from family members or friends, making it necessary to expand the plan.
The management plan must also be detailed if the farm will involve other key players such as investment partners and specialized workers like the driver, farm manager, accountant, sales and marketing officer, and lawyer.
Your plan should provide details such as:
- All stakeholders enlisted by their experience in cattle farming or technical know-how of the business
- Names of staff and partners, together with their respective positions
- General responsibilities of each stakeholder
- The hierarchy of command from the management team down to the lowest employee on the farm
Your financial plan can make or break your business. It comprises four key aspects:
- Your financial status and funds required: How much money do you have in savings or partner-raised capital? How much start-up capital do you need? And how much is required in operational expenses? Do you have an emergency or risk management fund? If you need outside money, what type of funding are you seeking? This could be credit card debt, grants, and loans from private lenders or commercial banks.
- Use of funds: What will your capital be used for? Typical uses include working capital, licensing, salaries/wages, infrastructure, pasture establishment/development, and daily operational costs. Other uses include cattle purchasing, raw materials for feeds, land, farm machinery and equipment, and unforeseen expenditure.
- Revenue model: How will your farm make money?
- Financial statements: You can’t improve what you haven’t measured. There’s every need to prepare financial reports like balance sheets, profit and loss statements, income statements, tax statements, and break-even analysis. You’ll also need to consider monthly cash flow projections, payback period, and repayment of loans and investor money with interest.
The operations plan details the technical aspects of your day-to-day cattle-keeping business. It’s a detailed overview of how your business will run and how products will be manufactured.
It includes aspects such as:
- Feeding program: This details what you’ll feed your cattle to achieve the required nutritional levels and desired weights, production levels, and body condition. It shows the types of feeds and how they will be mixed and offered to cows.
- Quality assurance for products or services
- Health program: This details cattle treatment, vaccination procedures, disease prevention mechanisms, breeding protocols, vet and animal nutrition services, post-mortem procedures, and dead cow disposal measures.
- Operational strategy: Will yours be a cow-calf operation, feedlot finishing operation, backgrounding, zero-grazing, or open-range ranching?
The marketing plan provides details such as:
- Your target market
- Customer knowledge based on customer analysis of demographics, likes, dislikes, estimated disposable incomes, expectations, consumption behavior for the products you produce, and their location.
- Market analysis to learn cattle industry projections and prevailing market trends
- Pricing strategy for your services or products based on prevailing market prices or private calculations informed by your cost of production
- Competition analysis and how you’ll deal with business competition (both nearby farms and those out of state)
- Marketing strategy, promotion, and distribution of products or services
The exit strategy is useful when you want to leave the business permanently or temporarily. It shows when, how, and why you might exit the business. The most common reasons are prohibitive feed costs and ever-increasing operating expenses.
The exit plan details options such as:
- Selling your business to a larger farm (acquisition)
- Selling parts of the business or all of it to other smallholders, for example, through an auction
- Diluting or selling your ownership in a partnership farm
- Succession with a continuity plan for handing over to the next generation if you become incapacitated or your corporeal existence comes to an end.
When To Amend Your Business Plan
You might need to review and amend your cattle farming business plan along the way for the following reasons:
- Desire to change from one product line to another. You could shift from beef cattle like Hereford and Angus to dairy cattle like Friesians and Guernseys.
- Realization of objectives. You might realize the objectives you set out to achieve, making it necessary to change tactics if there’s nothing more to achieve.
- The departure of partners leading to a lower number of partners or a total shift to a sole proprietorship model
- Addition of new partners
- Substantive market changes or disruptions that warrant a change in standardized operation procedures
- The need to retreat to regroup if things haven’t been going according to plan and you wish to overhaul the business
- Changes in cattle, such as a shift from light-feeding cattle breeds to heavy feeders like Holsteins
- Changes in cattle feed crops. You might want to shift from grass-based farming to rearing cows using field forage crops like corn for silage.