Recently, I had the opportunity to speak as a guest lecturer in the dairy entrepreneurship class at Virginia Tech. I am pleased that Virginia Tech’s Dairy Science Department is forward thinking and preparing its students for change in the industry. The class focuses on entrepreneurial activities as many in the industry use innovation to drive business and to create additional sources of income. 

Every student in this bright and early 8 a.m. class was female, including freshman and transfer students. The higher presence of females in dairy education is a notable trend across various colleges of agriculture. However, this is not completely a surprise as today, the majority of FFA and 4-H participants and leadership is also female.

During the class, one student asked, “Why take the time to develop a business plan?” My initial response was to compare agriculture to another industry, saying, “Airline pilots would not start a trip without filing a flight plan. This often allows them to circumvent bad weather or alter their flight path to arrive at their destination safely.” While this comparison is applicable, the more direct answer is that whether it is a two-page outline or complex 50-page plan, a business plan is a vital part of business success.

In today’s business environment, there are often surprises and opportunities along each step. The process of building a successful business can be summarized in four steps: plan, strategize, execute and monitor. Specifically, develop a basic plan on paper and think it through in strategic terms. Then execute the plan and monitor the progress. In agriculture, producers often will either take the time to plan and strategize or simply “shoot from the hip.” In the positive part of the economic cycle, haphazard management might work. However, in tougher economic times like many face today, these four steps can assist in allocating resources such as capital, time, labor and management. Without efficient alignment of resources, it is difficult for the business to take advantage of opportunities when they are presented.

Next, a business plan can serve as a communication tool with owners, management and employees, and also externally with customers and suppliers. A good business plan allows for adjustment and usually evolves as business and market conditions change. A plan is especially useful in tracking progress in regards to short-term and long-term goals.

Most importantly, a business plan allows for a risk-free, trial run of an idea. A new business idea can be exciting, but emotions do not make a good foundation upon which prudent business decisions can be made. Whether it is selling registered livestock, adding to a grain operation or pursuing supplementary income through a niche market, a business plan forces one to first think through potential income, expenses, resources and other factors before committing capital.

Through the years, entrepreneurship courses have been created at colleges of agriculture throughout the nation. It is interesting to watch their curriculums develop as the industry changes and evolves. Of course, the major theme in most of the courses remains the business plan.

P.S. Under the guidance of Dr. Alex White, the Virginia Tech Dairy Science Department is actually developing the first business plan for their fall showcase dairy cattle sale. This is an academic project, but it focuses on action. Interestingly, the students in this year’s entrepreneurship class are geographically diverse, ranging from California to Vermont, from Florida to the Canadian border.