Business plans are key to securing farm, equestrian and rural business finance and mortgages

Business planning is a crucial part of any farm, equestrian or rural business. Get it right and you earn the trust of lenders, suppliers and staff, and give yourself a useful tool to track performance and make improvements. Get it wrong and you may not even get your business ideas off the ground.

Business plans for securing finance

You know that a business plan is essential in helping your farm or rural business secure investment finance. A written record of your goals coupled with realistic, substantiated financial projections and a track record of delivering against those goals sends a message loud and clear to your prospective lenders - you understand your business and have the skills and knowledge to deliver the results you promise. Banks and other lenders will respond to that more readily than weak and badly presented business plans. You often only get one chance to make a good impression to your lenders, so you must make it count by presenting a strong and robust plan.

Other reasons to have a business plan

Contrary to popular belief, a business plan isn't just used to help your farm or rural business secure finance. You can use it to review your business, check progress, hold yourself accountable and control the fate of the business. By revisiting and reviewing the plan against progress regularly you can spot new opportunities and highlight areas for improvement. A plan will also help with financial management and cash flow monitoring. When the market and prices are volatile frequent reviews are more important.

What do you include in a business plan?

For a business plan for your own use and to put in front of lenders you will need to cover or include:

• Executive summary - an outline of the business proposal
• The business – the background, the plans, the long term and short term goals, the timescales
• The industry or market – the competitors, the market characteristics
• Marketing and sales – target customers, positioning, promotion methods
• Management – key staff, skills gaps and how they will be overcome
• Operations – facilities, equipment, transport
• Financial forecasts – including income, profit and loss, cash flow and balance sheet
• The extra funding you need
• Assets you can use as security
• Risks – where things could go wrong, and an exit strategy
• Assumptions/accompanying notes – substantiate all figures and give a sound basis for how you have calculated them

For a lending application the bank or lender will also want to see three years of historic accounts with explanations of the stock numbers, acreage or other enterprise details submitted with each set.

We have created a template that can help you:

• Farm or rural business plan guide

Most importantly, the information in the business plan needs to be realistic and well presented. You may find you need professional help. Use your accountant, consultant or other financial experts. R&BS have years of experience in preparing business plans and successful lending applications for farm, equestrian and rural businesses.