The A to Z of writing agribusiness plan

A business plan is a description of a business in terms of its goals, reasons for existence and strategies for attaining the objectives.

Components of the plan

1. Business background and objectives of the business

This section provides background information about the agribusiness. It should include:

• Status and form of the agribusiness (old or new and the legal description; sole proprietorship, partnership, cooperative or company).
• Physical location of the agribusiness.
• Vision, mission, goals and philosophy of the agribusiness.
• Opportunity and viability of the agribusiness.

2. Products and services offered by the business

This section describes the products and or services to be offered by the agribusiness.

• The factors which will give one a competitive advantage or disadvantage, for example, the level of quality or uniqueness or proprietary features.
• What are the leasing structures of the products or services if any?

3. Marketing strategy and plan

This section describes the market share that the agribusiness expects to control at the planning period and how much the share should grow annually over the plan period.

It further indicates the agribusiness’ ability to penetrate the market as planned in terms of sales revenue, profits, growth rate and trends.

What share of the market will one have? What is the current demand in the target market? These are growth trends, trends in consumer preferences and trends in product development, growth potential and opportunity for the business.

Marketing plan

This entails:

• How will the product be priced relative to the competition, including customer credit policies?
• How products will reach target customers and coordination mechanism of the actors in a distribution channel.
• What communication methods will be used to ensure that target consumers of agribusiness products are continuously informed in a positive manner? This should include the promotional budget for that purpose.
• People and processes applicable for agribusiness services. What processes will be put in place for service delivery and how will people be involved in that process?

4. Operational plan

This section explains how the agri-enterprise will produce its products. It should include physical location, facilities, equipment, a description of the production process and quality control.

5. Financial Plan

The projections need to be for a period of three to five years. The items covered in this section are:

• Balance sheet (statement of the financial position as at a particular date).
• Income statement (profit and loss account).

6. Agribusiness management and organisational structure

This section outlines who will manage the agribusiness on a day-to-day basis. In case the employees are to be out-sourced, indicate the recruitment procedures.

7. Monitoring, evaluation and controls

All the activities of the agribusiness must be continuously monitored and regularly evaluated to ensure deviations from the plan are rectified promptly.

8. Risks and assumptions

This section identifies the potential risks to the agribusiness. It shows your preparedness in dealing with unforeseen events and ways to mitigate them, including any underlying assumptions.

9. Other details

Brochure and advertising materials, industry studies, blueprints, plans and production machinery. Photos of location and any other materials needed to support the assumptions in the plan.

Dr Langat is an Agribusiness Management Expert, Egerton University