The key reasons 'why' you need to plan in business is to:
Define your goals: Establishing a mission and vision will help you define the scope and scale of your business.
Set goals and set out how they will be achieved, by setting short, medium and long-term goals.
Help your investors, staff and customers identify with your vision.
Define your value proposition or unique selling proposition.
Understand where you ‘fit’ – who are your competitors; are there similar products/services in the market? What are the trends in your market?
Identify your customers and analyse the size of the market.
All of these things help you consider the opportunities, constraints, enablers and blockers to you achieving your business goals – your ‘why.’
Other reasons to plan
There are many other reasons why we need to plan and many of these will inform the overarching ‘Business Plan’.
For example, a primary producer will have to plan things like:
The physical layout of the farm, to ensure the most efficient production from the land and water resources available and to match land capability and productivity expectations. Without having a good understanding of the carrying capacity or productivity of the physical assets of the farm, developing production forecasts, to inform the assumptions within your business plan, cannot be completed without a level of confidence to support your business case.
Conformity with legislative requirements; work health and safety, food safety, etc. all have their own systems and record-keeping requirements which will require attention to how you plan and manage your business.
Quality management system: Many primary producers are now required to implement some form of quality standard, whether part of a supply contract (e.g. with a supermarket) or an international standard (e.g. ISO
Labour: planning for peaks and troughs in labour requirements, for example at sowing, harvesting, etc.
Production planning: timing of sowing, agronomic inputs, watering, harvesting. These would all need to be timed in accordance with seasonal requirements and possible variations, and may need to be refined based on the timing of the product hitting the market, for example to take advantage of higher seasonal prices.
Water use and water supply: particularly where irrigation is used.
Cashflow Planning: funding of input costs, cashflow budgeting, production forecasting, estimated crop values, etc.
Financial Planning: Funding capital works; calculating the best return on investment etc.
Livestock planning: breeding, animal health (vaccines, inoculations, drenching, etc.)
Plant and equipment: all need to be justified financially and their maintenance and replacement programmed.
Fixed infrastructure: buildings, fences, reticulated water supplies, etc. need to be planned and designed to meet their functional requirements; we also need to plan for their maintenance and their replacement, particularly for fixed assets that have shorter life-spans.
An agricultural contractor (or an agribusiness servicing primary producers), in addition to many of the above, would have to think particularly about:
Workflow planning: balancing seasonal variations in terms of labour and equipment demands.
Customer management: attracting, keeping and managing customers. You have to be able to service your customers’ needs, on time and on budget or you won’t have them for long, so planning workflows; plant and equipment requirements; communications; etc.
Business financials: time and expense tracking and invoicing; record keeping