developing business plans for ag producers texas cooperative extension

Developing Business Plans Developing Business Plans for Ag Producersfor Ag Producers

Texas Cooperative Extension

Role of the Business Plan

Learning experience for producer

All pertinent information in one location– Historical financial information– Resource inventory– SWOT analysis

The Curriculum

Is there a need for a business planning curriculum in agriculture?

– Tomorrow’s Top Ag Producer ($1,000 reg fee)– Changed definition of Business Plan to

Management Plan

The Curriculum

The Purpose:

… to provide Extension faculty and staff and paraprofessionals with lesson plans designed to develop business

plans for their agricultural producers.

The CurriculumWho’s Involved?

Texas Cooperative Extension (authors)– Stan Bevers– Dr. Blake Bennett– Dr. Jason Johnson– Wade Polk– Bill Thompson– Brenda Duckworth

SRRMEC (funding)

The Curriculum

Each topic/section includes:

Publication

Worksheets

Case Study- TTAP Enterprises

The Curriculum

1. Executive Summary

2. Business Organization

3. Business History

4. Mission Statement

5. Resource Inventory

6. SWOT Analysis

The Curriculum

7. Legal and Liability Issues

8. Setting Goals

9. Production Plan

10. Financial Plan

11. Marketing Plan

12. Completed Business Plan for Case Study

“Business Plan” becomes…

Management Plan

The Curriculum

Detailed Complete Includes both financial and production Plan to identify and promote strengths

and opportunities Plan to identify and compensate for

weaknesses and threats

The Curriculum

Lesson 6…

S.W.O.T. Analysis

S.W.O.T.

Strengths

Weaknesses

Opportunities

Threats

S.W.O.T.

For each weakness or threat, there should be an off-setting strength or opportunity to

compensate.

Strengths

Internal element Low-cost producer

– Financial Plan Competent and reliable employees

– Resource inventory Marketing niche

– Marketing plan Expertise in production (A.I.)

– Production plan & resource inventory (skills)

Weaknesses Internal element Highly leveraged

– Financial plan

Poor brush control, underutilized grassland– Resource inventory

Not utilizing futures market– Marketing plan

Inadequate facilities or machinery– Resource inventory

Opportunities

External element Are there new technologies that would

lower costs? Will diversification of enterprises increase

profit? Can my operation command a competitive

edge?

Threats

External element Ethanol explosion to a cattle feeder Drought causing water shortage What’s happening in the market that might

effect your enterprises? Are there siblings fighting over family

land?

The Curriculum

Publication

Worksheets

Case Study

TTAP EnterprisesS.W.O.T.

See handout for SWOT Analysis on TTAP Enterprises.

Implementation of Curriculum

TTAP I– Four week-long sessions, November and

January– Time spent on each section– Each session includes a study hall, panel

discussion, social event, & homework– Extension personnel and experts in each field

head the discussions

TTAP AgendaSession I

Lesson 2- Business Organization– Organizational Structure (Stan Bevers)– Business Structure (Bill Thompson)

Lesson 3- Business History– Stan Bevers

Lesson 4- Mission Statement– Greg Clary

Lesson 5- Resource Inventory– Jason Johnson

TTAP AgendaSession I

Lesson 6- SWOT– Blake Bennett

Lesson 8- Setting Goals– Goals & Objectives (Jason Johnson)

Lesson 10- Financial Plan– Introduction to Financial Statements (Brenda

Duckworth)– Management Accounting (Brenda Duckworth)

Lesson 11- Marketing Plan– Sources of Risk (Wade Polk)

TTAP AgendaSession II

Lesson 5- Resource Inventory– Personality Tests (Don Tyler)– Family Issues (Don Tyler)– Personnel Management (Don Tyler)

Lesson 9- Production Plan– Wade Polk

TTAP AgendaSession II

Lesson 10- Financial Plan– Advanced Management Accounting (Brenda

Duckworth)– Financial Plan (Stan Bevers)– FARM Assistance (Wade Polk)– Family Financial Plan (Jason Johnson)

TTAP AgendaSession III

Lesson 7- Legal & Liability Issues– Contracts (Wayne Hayenga)– Crop Insurance & LRP (Ken Stokes)– TRAMM (Ins. Game) (Stan Bevers)

TTAP AgendaSession III

Lesson 11- Marketing Plan– Requirements for an Effective Market (Stan

Bevers)– Strategic vs. Tactical Plans (Stan Bevers)– Agricultural Policy (Joe Outlaw)– Concurrent Marketing Sessions

• Livestock- David Anderson• Grains- Mark Waller

– Introduction to Futures & Options (Mark Waller)

TTAP AgendaSession IV

Lesson 1- Executive Summary– Stan Bevers

Lesson 7- Legal & Liability Issues– Legal & Liability (Judon Fambrough)– Intergenerational Transfer (Wayne Hayenga)

TTAP AgendaSession IV

Role of Participant to Mentors (Jason Johnson)

Mentor Training (Jason Johnson)

Presentation of Business Plans to Mentors

TTAP AgendaSession IV

and finally…

TTAP AgendaSession IV

Graduation!!(whew….)

Implementation of Curriculum

Each section relies on information from other sections– Resource inventory includes fixed (depreciable)

assets

Sections should reconcile– Resource inventory & depreciation schedule

Implementation of Curriculum

When completed, producer has a

Management Plan of Continuation

Process is as important as end product!

Implementation of Curriculum

Goals are determined according to information gathered in process

Goals must be revisited each year– Were they attained? If not, why? If so, set

them higher.

Availability

Texas Cooperative Extension Personnel (handout)

Website– http://agrisk.tamu.edu