The finding is staggering. A recent IPSOS Reid poll found that certain farms achieve five-times higher return on assets because of one key element. Perhaps more surprising is how accessible this element of a farm business is — it’s a written business plan.
That number is impressive, but even more striking is the associated finding that only 26% of surveyed farms actually have a written plan.
To explore why so many farms fail to plan, RealAgriculture’s Shaun Haney speaks with Rob Hannam, founder of Synthesis Agri-Food Network, for this episode of Mind Your Farm Business.
While not every farm leader may be a natural planner, Hannam says that a business plan need not be a 30-page, graph-laden document. “The best farm business plan is the one that gets used,” Hannam says in the interview below, and that could mean it’s a one-page, concise document.
Can’t see the above video? Find it here.
If the length of the plan doesn’t matter, what does? Hannam says what’s most important is that your business plan address the following four key elements:
- A shared vision and direction for the farm
- Trends and opportunities, both positive and negative, external from the farm itself
- An action plan — what are you going to do to make this vision happen? Who is responsible for what? How long do you have to accomplish each goal?
- A scorecard — choose numbers that are meaningful to your farm and that you can monitor over time, i.e. profit per acre, pounds of gain per day.
From there, your plan should be considered a living document, and one you go back to often, to review and revise as your farm business evolves.
Disclaimer: Royal Bank of Canada and its subsidiaries are not responsible for the information provided in this podcast, and this information does not necessarily reflect the views of Royal Bank of Canada or any of its subsidiaries. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its subsidiaries.