Farm Business Operational Plan

A Farm Operational Plan is a document that helps Agricultural entrepreneurs document all important operational aspects of a business. Serves as a guide toward profitability. This is a living document that should be revised every time there are changes in the business. Think of the Farm Operational Plan document as a road map that will:

Explain the day-to-day details related to the operation.
Streamline farm processes.
Improve the clarity of short-, medium-, and long-term goals of your agricultural operation.

Below, you will find the six components that make up a Farm Operational Plan:

1. Inventory of Physical Resources
This is an inventory of available resources on the farm and what other resources will be needed. Resources could include the following:
- Land – characteristics such as size, soil type, waterbodies, hardiness zone, etc.
- Infrastructure – buildings, irrigation lines, wells, fencing, etc.
- Equipment and supplies – tractors and other farm machinery, farm supplies such as pots, irrigation pipes, fertilizer bags, pesticides, animal inventory, medications, seeds, plants, etc.
The inventory should be detailed and include everything relevant to the farm operation. In any good inventory, farmers should also answer the following questions:
- What do I have and what do I need?
- When do I need to replace equipment, take a vacation, etc.?

2. Operational Human Resources
This explains the number of employees needed and what tasks need to be completed on a specific day of the operation.

It defines:
- The job duties per employee.
- The availability of labor (who is doing the task).
- Backup employees when others are unavailable to perform their job duties.
It also defines the timing for peak labor and the chain of command among employees.

3. Regulations

This is a list of all federal, state, and local regulations your farm business should comply with. Depending on your farm activities, this will include permits or licenses such as retail or wholesale permits, specific agricultural commodities permits, pesticide licenses, food safety certificates, biosecurity procedures, waste management procedures, etc. If any of your farm tasks do not comply with laws and regulations, you will have to redefine your operation and adjust to comply with the law.

4. Production Plan / Management Calendar
This is a list of all the crops within the farm, how many acres are being planted per season, and what equipment or materials are needed to achieve production goals.

It includes:
- The expected production yield per crop and the harvest schedules (quantity of product per acre and possible revenue).
- All labor contracts, including farm employees and external contractors (compensation of employees and costs of external services).
- Costs of equipment and materials (structures, machinery, utilities, planting materials, feed, etc.).
Think of the production plan as a detailed description of all the tasks, machinery, and workforce needed to obtain the final product of your farm on a daily basis.

. . . . .

A management calendar could help you keep track of your production Plan.

The management calendar should include:
- All production, planting, and harvesting times.
- All marketing dates.
- Supply calendar:
  - Supply ordering
  - Equipment needs
  - Labor needs for harvest and processing
  - Cash flow sheets (income and expenditures)

5. Contingency Plan or Risk Management Plan
Every farm should have a contingency plan in case of risks or accidents. The contingency plan should include the following:
- A natural disaster plan in case of drought, hurricane, flooding, or fire.
- An injury plan that includes procedures and contacts for the nearest medical facilities, fire department, and any other emergency county personnel. For livestock operations, it should also include veterinarian emergency contacts.
- An electrical outage procedure plan (generator location and usage).
- Food safety procedures that comply with the law. Examples: HACCP plan or food safety audit information.

6. Transition Plan / Succession Plan

This is a plan for the property aside from a regular business plan. It defines who will take over the business (next generation and job descriptions) if the owner is no longer available. It also provides a list of decision-makers if the owner of the business is unable to make them. This will include legal documents such as estate documents, wills, and taxes, among other documents.

The University of Missouri Extension has developed a guideline for a Short Term Operating Plan for farms and ranches. You can access these guidelines here: