Homesteaders are not afraid of hard work and do not collapse when confronting a challenge. This is why it is difficult to understand why many homesteaders do not spend the time and effort to create a business plan. Yes, creating a business plan seems intimidating at first. If you are not seeking capital, you may think you don’t need one. But if you want to make money on your homestead, you have a homestead business. And you increase the chances of success exponentially with a business plan. In an effort to make the process less intimidating, I will include examples for each section using a fictitious homesteading venture.
In its simplest form, a business plan is a map for your business. It is a living document, meaning as things change, it can change as well. It keeps you focused on your mission, the products and/or services, the deadlines you need to meet to stay (or get) in the black, and your financial benchmarks. I recommend not only having an overall business plan, but also creating one for each significant venture. For example, in addition to the overarching plan, it is a good idea to write out a plan if you decide you want to add sheep to your homestead. Having a plan to refer back to when you are faced with a business decision frees up mental space, keeping you from sleepless nights wondering if you made the right decision.
If you are trying to elicit funding, you will need to create a traditional business plan. These can run dozens of pages because they are extremely detailed. For a personal guide, and for our purposes here, a lean business plan will suffice. Regardless of the type of plan, each document will cover the same material. Your homestead business plan will have an executive summary, a description of your business, market analysis, competitive analysis, description of organizational management, description of products and services, a marketing plan, a sales plan, and financial projections. If you are seeking capital, you will also include a request for funding.
Your executive summary is the first section of your business plan, but because it should be the last thing you write, we will go over the other sections first. The executive summary is arguably the most important part of the document, so keep it in mind as you are working through the other sections.
Parts of a Business Plan for Your Homestead
Description of Business: In this section, you will declare the business you are in and what your business does. It’s worth spending some time on this section because you can repurpose it to use in your About section on your website and social media platforms. Done well, it also makes a terrific addition to brochures and newsletters. Example: Heritage Turkey – After learning about the antibiotics pumped into commercial turkeys, as well as the inhumane conditions they live in and poultry workers endure daily, Always Saturday Farmstead, a homestead business dedicated to healthy, sustainable food raised in humane conditions, incorporated heritage turkeys on our family farm. Our heritage turkeys are antibiotic-free, and enjoy a free-range life where, in addition to organic feed, they spend their days foraging on pasture.
Market Analysis: Think about who your potential clients are and what they value, then research your local marketplace to make sure your product fits a niche in the market. While conducting a market analysis, begin thinking about how your product or service is different and better than what is currently on the market. Example: Supercenters offer commercial turkeys at a low price, though these turkeys are raised and harvested industrially, eat cheap feed, and are regularly treated with antibiotics. Additionally, there is an independent turkey farmer 45 miles from our farm, though that farmer also does not raise heritage turkeys or provide pasture/high quality feed.
Competitive Analysis: Similar to market analysis, this section digs deeper into the competition and encourages you to find exactly what makes your product or service special. It is here more than anywhere else that you are going to figure out whether this product is a good idea. After all, if the farm down the road is selling heritage turkeys, you are not going to want to jump into that business. You don’t want to compete with your neighbors. A good friend down the road is always better than a few dollars in the bank. Example: There is not an independent farmer within 200 miles selling pasture-raised heritage turkeys, making Always Saturday Farmstead the first in our community to offer this product. In addition to taking orders for Thanksgiving turkeys, we also take orders for smoked turkey, whole or sliced, and smoked turkey tamales. For every turkey purchased, we donate one to a local family, in partnership with our local police department.
Description of Organizational Management: This section provides a brief overview of personnel, as well as their responsibilities. Example: Heritage Turkey falls under the umbrella of Always Saturday Farmstead LLC. Alan Calhoun is responsible for the purchasing poults, constructing housing, and seeding pasture. Jenny Calhoun is responsible for day-to-day care, social media, ordering logistics, and financials. Both Alan and Jenny are responsible for harvesting and delivering orders.
Description of Products and Services: This is where you will state what product or service you are offering, how you produce it, and what resources are necessary for the production. Example: Always Saturday Farmstead produces heritage turkeys during the month of November. In addition to poults, this operation requires housing, warming equipment, organic feed, feeders and waterers, predator-proof fencing, harvesting equipment, and food bags. Additional requirements include internet connection and social media platforms for marketing purposes.
Marketing Plan: In this section, you will decide who your target market includes, how you will reach them, what marketing resources are required, a tentative timeline and budget, and how you will measure success. Example: Always Saturday Farmstead will begin preparing the market for heritage turkeys in early May as the entire process of preparing the farm for turkeys will be on our website and social media platforms. Posts will not only allow potential clients to see what goes into turkey farming but will educate the public about the dangers of commercial turkey farms. Beginning in September, we will include a brochure at our farmers market booth, as well as an order form. Our collaboration with the police department will be emphasized. The goal for year one is to sell 35% of the turkeys raised, donate 35%, and allow the remaining turkeys to breed.
Sales Plan: This is the place for an overview of your sales strategy, including the steps you will take to achieve your sales goals. Example: The sales strategy for heritage turkeys relies heavily on social media to inform and educate our existing base about the benefits of heritage turkeys. To reach an untapped local market, we will make use of the local radio station and newspaper, and we will begin promoting Thanksgiving turkeys at our farmers market booth beginning mid-September. We will host a family fall farm day, where the public can see the turkeys in the pasture, tour the farm, and have an opportunity to order a turkey.
Financial Projections: This section projects when the business will generate a profit, and how the company will grow. First-year projections are guesswork but try to err on the conservative side. It is much more encouraging to outdo your projection than it is to fall short. Example: We expect to fall short of a profit during year one due to the novelty of the product in our area, as well as the one-time expenses inherent in a new venture, such as housing and fencing. In year two, we project we will break even due and that we will have a consistent customer base and see a profit by year three.
Once you have done the work for each section, it is time to write the executive summary. The executive summary is simply a summary of everything you have just written. Its job is to not only provide an overview but to impart some of your enthusiasm for the project to your readers. There is no example for this section, as it relies on your passion for the project and creativity in telling the story. You have already done the work – this is where you can have fun with the business plan.
As a new year begins, I encourage you to take a weekend or two and sketch out a plan for one or two of your upcoming homestead projects. If your goal is to make a living from your homestead, it is one of the smartest things you can do!