Why do I need a formal business plan?
Operating any business without a plan is like building a house without blueprints. A good business plan provides you with a profile of where you want your business to be in one year, three years, five years or maybe even longer.
The most important characteristic of a well-constructed business plan is that it provides your business with short- and long-term objectives. Without objectives, it will be difficult for you to measure progress during the year and your degree of success at the end of the year.
What should be included in a business plan?
A good business plan features a short-term component and a long-term component:
- The short-term component is a cash flow statement that shows when and how your business generates and consumes cash.
- The long-term component outlines your long-term business objectives.
What benefits does the short-term component provide?
The short-term component of the business plan—your cash flow statement—is a useful planning tool. The short-term component can identify:
| Short-Term Component | |
| Objectives | For Example |
| Financial objectives | Decrease total debt by $20,000 by year end. |
| Production Goals | Ship 19,000 pounds of milk per cow. |
| Expense and management goals | Stay within 2 percent of budgeted expenses. |
What does the long-term component provide?
The long-term component articulates your long-term objectives by detailing specific targets you expect to reach at three months, six months, nine months and the end of the year. Your long-term component can identify a wide range of objectives:
| General Objectives | |
| Objectives | For Example |
| Financial goals | For revenues, expenses or debt reduction |
| Production targets | For bushels of corn shipped |
| Capital Acquisitions | Such as a new harvester or milking parlor |
| Labor Management | To increase/reduce work force by two employees |
Specific Objectives |
|
| Identify long-term debt levels per operating unit | |
| Determine liquidity levels that will help meet unexpected adversity | |
| Set conditions under which expansion is feasible | |
| Itemized targets for expense management | |
How
do I get started?
Your local Western New York loan officer can help you develop a comprehensive
business plan or serve as a sounding board for your ideas.
We can help you create a business plan at any time of the year. Contact
us at info@farmcreditwny.com
for more information today!
monthly newsletter.- 9 Business Succession-Planning Mistakes to Avoid
- Can outsourcing sharpen your competitive edge?
- Who needs a consultant?
- Why you need financial statements to successfully manage your business ... and how Farm Credit can help!
- Management reports do a lot more than count beans!
- Financial Solutions - improve management
- Dairy Farm Summary
Home | About Us | Financial Solutions | Notebook | Community | Links
Online Banking | Governance | Financial Highlights | Search | Site Map | Contact Us
©
1999-2005 Farm Credit of Western New York, ACA. All rights reserved.