AGRICULTURAL VALUE CHAIN AS AN APPROACH TO AGRIBUSINESS 2
Framework for business plan development
i. Executive Summary
This is a summary of each aspect of the plan. This part is only completed after the business plan has been done. It should be short and precise to a maximum two pages. If it is the only thing that a reader will read it needs to give a synopsis of what business want to do or achieve.
ii. Introduction/Background
It is a summary of the business, its history and position/possible position in the market place. This part gives an overview of your business or potential business, vision and objectives. The introduction consists of the following:
- Business overview
- Where is your business or where are you going to establish your business?
- What are you going to do or what are you currently doing?
- Vision and mission
The vision is a dream and this is what you will focus your energies and resources on in getting the business to work. The mission will be achieved through the objectives of the business.
- Objectives/goals:
This section needs to include production and/or financial related objectives specific to the enterprise or potential enterprise. Objectives need to comply to the S.M.A.R.T principles as follows:
- S - Specific: An objective need to be specific and not vague, it needs to say this is what the business want to achieve.
- M - Measurable: ability to measure an objective.
- A - Achievable: Take into consideration the available resources or potential resources to achieve the stated objective;
- R - Realistic: Do not set unrealistic objectives which cannot be achieved or reached. The objective needs to be understandable to the reader.
- T - Timeframe: The objectives need to be for a specific period so that their achievement can be assessed. This pertains to the projected time that in anticipation it would take to achieve the objectives.
iii. SWOT Analysis
This part gives you an indication of the Strengths, Weaknesses, Opportunities and Threats that are involved in your new or existing crop business. It also identifies the internal and external factors that are favourable or unfavourable to achieve business - s objectives. It is important to look at ways to build on the positive issues and address negative issues (how will the potential risks be addressed?). The 5 Ws (what, how, where, who and when) can assist in drafting a plan.
- Strengths are attributes of a person or of the business that can contribute in achieving the objectives.
- Weaknesses are attributes of a person or of the business that can lead to not achieving the objectives.
- Opportunities are external conditions that will contribute to the achievement of the business objectives.
- Threats are external conditions that can lead to not achieving the stated objectives.
- Strengths and Weaknesses are factors internal to the business and
- Opportunities and Threats are factors, outside or externally, of the business.
iv. Risks
This part deals with the different risks involved in starting or expanding an existing irrigation business. A risk can be defined as any deviation from the expected outcome. Types of risks are: business risks, financial risks and political/legal risks. It should also indicate what risks will be accepted by the business and what would be mitigated and how.
v. Assumptions
There may be external circumstances or events that must occur for the business to be successful. Believing that such an event is likely to happen, and then it would be an assumption. The assumptions need to be realistic and relevant to the environment hosting the business or crop business sector itself.
Conclusion
A business plan is the written guide to your business's success. You can have others prepare your business plan, but you really should be the one developing the plan using others only for assistance. The plan reflects your image and views of your business. The process of developing the plan may be much more valuable as a learning experience than the plan itself. When completed, you should have your plan reviewed by someone objective but knowledgeable in your business operations. Business Overview is the first in a series of five sections that will help you prepare a business plan for your proposed agri-business operation.