Benefits of Business Planning

Previously, we focused on the challenges and remedies of business planning based on a breakout session at a conference for young and beginning farmers. As a follow up to that discussion, another young producer asked the group to enumerate the benefits of business planning.

Think Big
One producer spoke up and shared that business planning had challenged him to “think big.” As he began the planning process, he first needed a vision, or a mission statement, to anchor his goals. In his experience, business planning gave life to his aspirations inside a logical, realistic timeframe that stretched from the next year to five and 10 years into the future. Joined by others in the group, this producer said that business planning energized him and the business.

Be Reasonable 
While business planning allows one to “think big” on paper, reality quickly sets in when one must think through the impacts and limitations of resources such as land, labor, capital and, to some extent, management. The development of a business plan establishes boundaries and parameters within the realities of the market, financials and life pursuits.

Of those who had previously completed the business planning process, many indicated that one of the biggest benefits was setting goals. In fact, knowing the business and personal goals of partners, parents and spouses brings a sense of relief. Additionally, established goals brought clarity and transparency both relationally and for the business. This part of the process helped bridge the gap between execution and the discipline needed to execute. There is an old saying “after you create the plan, then you’ve got to work the plan” which is very applicable to this process.

Family Unity
As an added benefit, many indicated the process brought their families together. This process required the family to think through and develop its history, establish its goals, and discuss how much financial leverage was comfortable. And even for those who discovered family interests were at odds, the family relations seemed to relax once these realizations were made.

Finally, the benefit of business planning is that it requires individuals to work on the business rather than just working in the business. Matching the energy and passion of dreams with the focus and clarity of goals, business planning paves the way for a successful, sustainable business as well as lasting family and business relations.