Help meet their needs while simultaneously increasing your farm revenue - with Agritourism
This online resource will teach you how.
Business and Financial Planning
Without a plan, any business is probably pre-destined to fail. But on the flip side, by preparing a good plan (and sticking to it), your chances for success in your agritourism endeavor are greatly multiplied. Incorporate a winning plan, stay with it and you will be a winner.
Building your Business Plan
Within a business plan, challenges, goals, strategies and values come together and are defined. Clarifying these factors are a must so your business has roots. Establishing these things will also allow you to see the situation clearly before making unreasonable commitments. Use the business plan to guide you in your financial and management decisions and you will do well.
Business lenders will most likely require that you have a business plan secured. Why? Because a stated above, a clear cut business plan sets winners apart from the losers. Your financial situation as well as your financial expectations should be expressed within the plan. It should always be kept current and it is wise to reevaluate and update it periodically too.
Planning Your Plan
There are some very important things your business plan should possess. They are as follows:
- Executive summary to begin the plan.
- Mission statement to define your business intentions.
- Business concept to summarize your ideas.
- Goals and expectations should be listed, explained and expounded upon.
- Background and research information should be included.
- Management history and needs should be explained.
- Your marketing plan should be strategized.
- Your financial plan should be strategized including income, expenses, capital costs and projections for the first three years.
- An exit strategy should be included.
- An appendix should be written as well.
Establishing Your Entity
When it comes to agritourism, selecting the legal business structure that is the best fit for you is imperative. You may be established already in your business and wanting to simply transfer from the older generation to the youngest or you may be needing to protect your assets from liability.
There are many scenarios when it comes to establishing your entity. No two are just alike. Whatever your need of a business structure is, there is a model or plan to suit most every need. Do note that you may require the assistance of a professional such as an attorney or accountant to determine which plan suits your business best. In addition, you will have to have a good insurance policy and conscious management as well.
Here are some of the types on entities:
Limited Liability Corporation (LLC)
An LLC may be taxed as a partnership or as a corporation. You can be a single LLC which is call a “disregarded entity”. There are benefits to being and LLC that are worth checking into with a professional.
This type of entity is made up of a group of people with a common core interest, such as farmers.
Non-profit agencies are tax exempt.
Corporations are made up as shares and can be taxed as a corporation or partnership.
Budgeting is another factor of your business that will have to be done, no question about it. The failure to budget wisely can easily cause a business’ demise. Initially, you will require a full budget plan. Partial budgeting is one aspect that you will incorporate when you make a change or expand or to figure the specifics on one area of your business, such as the pumpkin patch or small animal section. The more you know and record about each element of your agritourism business, the better.
When figuring your budget, you will include the added returns, the potential of the enterprise or the potential for the change of enterprise, the costs, the lease or payments, any construction or improvements required, the increase of utilities, legal accounting costs incurred, fencing and new equipment needed, permits, taxes, land, signage, facilities (such as restrooms), ADA compliance, paying employees, sales of produce from the farm, tour and admission fees, marketing and anything else you can think of that brings in or takes out money from your business.
Keeping Good Records is a Must
Good records show the facts. With the facts, you can reach a workable plan where with figures that are not shown, you will not be working with the real facts and can easily get into financial trouble. Don’t procrastinate keeping up with the financial record for that leads to problems as well. If you are not good at keeping the finances straight and accounted for in a timely manner, find someone who is...bottom line.
With well-kept records, you will be able to identify areas of poor and good performance, analyze progress, plan for the future and many other things that are very conducive to your agritourism business. Keeping good records will help assure your business succeeds.
Pricing Your Wares
Good financial records will help you determine how to price your wares. You can also compare with what others in similar businesses charge. Take into consideration what your customers are willing to pay as well.
Financing Your Business
Financing is usually the biggest obstacle farmers face when launching an agritourism business. Public and private investments are an option you may want to check into as well. Be sure to look at grants that may be available for your business too. You may be surprised to learn of all the resources available in the agritourism field in your area.
There will be additional expenses beyond just securing your land and whatever means you intend to make your living from such as horses, crops, fruit trees or small fiber animals. Taxes will be inevitable. Regulations will require that money be spent as well. Permits and licenses should be planned for too. It can be overwhelming to think of all the extra expenses your business will incur but remember, that is what stops many from taking the big step into agritourism which is a good thing. Find a way to make your business work despite the expenses and you’ll come out a winner.