How to write a business plan for an agronomy consulting company?
Creating a business plan for an agronomy consulting company is an essential process for any entrepreneur. It serves as a roadmap that outlines the necessary steps to be taken to start or grow the business, the resources required, and the anticipated financial outcomes. It should be crafted with method and confidence.
This guide is designed to provide you with the tools and knowledge necessary for creating an agronomy consulting company business plan, covering why it is so important both when starting up and running an established business, what should be included in your plan, how it should be structured, what tools should be used to save time and avoid errors, and other helpful tips.
We have a lot to cover, so let's get to it!
Why write a business plan for an agronomy consulting company?
Understanding the document's scope and goals will help you easily grasp its structure and content. Before diving into the specifics of the plan, let's take a moment to explore the key reasons why having an agronomy consulting company business plan is so crucial.
To have a clear roadmap to grow the business
It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...
In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for an agronomy consulting company is essential to create successful and sustainable businesses.
To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.
Once you know where you want your agronomy consulting company to be, you'll have to identify:
- what resources (human, equipment, and capital) are needed to get there,
- at what pace the business needs to progress to get there in time,
- and what risks you'll face along the way.
Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.
To get visibility on future cash flows
If your small agronomy consulting company runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your agronomy consulting company's future cash flows.
So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.
The good news is that your agronomy consulting company business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.
To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.
By diligently monitoring your agronomy consulting company's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.
To secure financing
Crafting a comprehensive business plan for your agronomy consulting company, whether you're starting up or already established, is paramount when you're seeking financing from banks or investors.
Given how fragile small businesses are, financiers will want to ensure that you have a clear roadmap in place as well as command and control of your future cash flows before entertaining the idea of funding you.
For banks, the information in your business plan will be used to assess your borrowing capacity - which is defined as the maximum amount of debt your business can afford alongside your ability to repay the loan. This evaluation helps them decide whether to extend credit to your business and under what terms (interest rate, duration, repayment options, collateral, etc.).
Similarly, investors will thoroughly review your plan to determine if their investment can yield an attractive return. They'll be looking for evidence that your agronomy consulting company has the potential for healthy growth, profitability, and consistent cash flow generation over time.
Now that you understand the importance of creating a business plan for your agronomy consulting company, let's delve into the necessary information needed to craft an effective plan.
Information needed to create a business plan for an agronomy consulting company
You need the right data in order to project sales, investments and costs accurately in the financial forecast of your agronomy consulting company business plan.
Below, we'll cover three key pieces of information you should gather before drafting your business plan.
Carrying out market research for an agronomy consulting company
Carrying out market research before writing a business plan for an agronomy consulting company is essential to ensure that the financial projections are accurate and realistic.
Market research helps you gain insight into your target customer base, competitors, pricing strategies and other key factors which can have an impact on the commercial success of your business.
In particular, it is useful in forecasting revenue as it provides valuable data regarding potential customers’ spending habits and preferences.
Your market research may reveal that agronomy consulting companies with a strong online presence may see increased demand for their services. Additionally, it could show that consumers may prefer agronomy consulting companies that offer a wide variety of services, such as fertilization, disease diagnosis, and pest identification.
This information can then be used to create more accurate financial projections which will help investors make informed decisions about investing in your agronomy consulting company.
Developing the sales and marketing plan for an agronomy consulting company
As you embark on creating your agronomy consulting company business plan, it is crucial to budget sales and marketing expenses beforehand.
A well-defined sales and marketing plan should include precise projections of the actions required to acquire and retain customers. It will also outline the necessary workforce to execute these initiatives and the budget required for promotions, advertising, and other marketing efforts.
This approach ensures that the appropriate amount of resources is allocated to these activities, aligning with the sales and growth objectives outlined in your business plan.
The staffing and equipment needs of an agronomy consulting company
Whether you are at the beginning stages of your agronomy consulting company or expanding its horizons, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is vital to ensure your business's success.
To achieve this, both the recruitment and investment plans must align coherently with the projected timing and level of growth in your forecast. It is essential to secure appropriate funding for these plans.
Staffing costs for a agronomy consulting company might include wages for agronomists, administrative staff, and customer service representatives. Equipment costs might include computers, software, and other technology for conducting research and analyzing data. Additionally, the company might need to purchase soil testing kits, farm equipment, and vehicles for surveying farms.
To create a financial forecast that accurately represents your business's outlook, remember to factor in other day-to-day operating expenses.
Now that you have all the necessary information, it's time to dive in and start creating your business plan and developing the financial forecast for your agronomy consulting company.
What goes into your agronomy consulting company's financial forecast?
The financial forecast of your agronomy consulting company's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.
The four key outputs of a financial forecast for a agronomy consulting company are:
- The profit and loss (P&L) statement,
- The projected balance sheet,
- The cash flow forecast,
- And the sources and uses table.
Let's look at each of these in a bit more detail.
The projected P&L statement
The projected P&L statement for an agronomy consulting company shows how much revenue and profit your business is expected to make in the future.
A healthy agronomy consulting company's P&L statement should show:
- Sales growing at (minimum) or above (better) inflation
- Stable (minimum) or expanding (better) profit margins
- A healthy level of net profitability
This will of course depend on the stage of your business: numbers for a startup will look different than for an established agronomy consulting company.
The forecasted balance sheet of your agronomy consulting company
The projected balance sheet of your agronomy consulting company will enable the reader of your business plan to assess the overall financial health of your business.
It shows three elements: assets, liabilities and equity:
- Assets: are productive resources owned by the business, such as equipment, cash, and accounts receivable (money owed by clients).
- Liabilities: are debts owed to creditors, lenders, and other entities, such as accounts payable (money owed to suppliers).
- Equity: includes the sums invested by the shareholders or business owners and the profits and losses accumulated by the business to date (which are called retained earnings). It is a proxy for the value of the owner's stake in the business.
Analysing your agronomy consulting company projected balance sheet provides an understanding of your agronomy consulting company's working capital structure, investment and financing policies.
In particular, the readers of your plan can compare the level of financial debt on the balance sheet to the equity value to measure the level of financial risk (equity doesn't need to be reimbursed, while financial debt must be repaid, making it riskier).
They can also use your balance sheet to assess your agronomy consulting company's liquidity and solvency:
- A liquidity analysis: focuses on whether or not your business has sufficient cash and short-term assets to cover its liabilities due in the next 12 months.
- A solvency analysis: takes and longer view to assess whether or not your business has the capacity to repay its debts over the medium-term.
The projected cash flow statement
A cash flow forecast for an agronomy consulting company shows how much cash the business is projected to generate or consume.
The cash flow statement is divided into 3 main areas:
- The operating cash flow shows how much cash is generated or consumed by the operations (running the business)
- The investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.)
- The financing cash flow shows how much cash is raised or distributed to investors and lenders
Looking at the cash flow forecast helps you to ensure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.
It is also a best practice to include a monthly cash flow statement in the appendices of your agronomy consulting company business plan so that the readers can view the impact of seasonality on your business cash position and generation.
The initial financing plan
The sources and uses table or initial financing plan is a key component of your business plan when starting an agronomy consulting company.
It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).
This table helps size the investment required to set up the agronomy consulting company, and understand how risks will be distributed between the business owners, and the financiers.
The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.
Now that you have a clear understanding of what will go into the financial forecast of your agronomy consulting company business plan, let's have a look at the written part of the plan.
Need inspiration for your business plan?
The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.
The written part of an agronomy consulting company business plan
The written part of an agronomy consulting company business plan plays a key role: it lays out the plan of action you intend to execute to seize the commercial opportunity you've identified on the market and provides the context needed for the reader to decide if they believe your plan to be achievable and your financial forecast to be realistic.
The written part of an agronomy consulting company business plan is composed of 7 main sections:
- The executive summary
- The presentation of the company
- The products and services
- The market analysis
- The strategy
- The operations
- The financial plan
Let's go through the content of each section in more detail!
1. The executive summary
The first section of your agronomy consulting company's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.
When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.
Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.
Then you should follow with an overview of the addressable market for your agronomy consulting company, current trends, and potential growth opportunities.
You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.
Finally, you should detail any funding requirements in the ask section.
2. The presentation of the company
As you build your agronomy consulting company business plan, the second section deserves attention as it delves into the structure and ownership, location, and management team of your company.
In the structure and ownership part, you'll provide valuable insights into the legal structure of the business, the identities of the owners, and their respective investments and ownership stakes. This level of transparency is vital, particularly if you're seeking financing, as it clarifies which legal entity will receive the funds and who holds the reins of the business.
Moving to the location part, you'll offer a comprehensive view of the company's premises and articulate why this specific location is strategic for the business, emphasizing factors like catchment area, accessibility, and nearby amenities.
When describing the location of your agronomy consulting company, you could emphasize the potential for growth in the area. It may be located in an area with a well-established agricultural sector, where there is potential to increase productivity and profitability through the application of agronomic practices. The area might also have favorable economic conditions, with a diverse population and a range of businesses across a variety of industries. This could indicate that the area is ripe for investment and has a strong customer base for your consulting services. Furthermore, this location could be well connected, with access to transportation links and other services that may be necessary for your business.
Lastly, you should introduce your esteemed management team. Provide a thorough explanation of each member's role, background, and extensive experience.
It's equally important to highlight any past successes the management team has achieved and underscore the duration they've been working together. This information will instil trust in potential lenders or investors, showcasing the strength and expertise of your leadership team and their ability to deliver the business plan.
3. The products and services section
The products and services section of your business plan should include a detailed description of what your company offers, who are the target customers, and what distribution channels are part of your go-to-market.
For example, your agronomy consulting company could offer soil testing services to help farmers understand the composition of their soil and determine how to best manage their land. It could also provide advice on the most efficient ways to irrigate the land and the best fertilizers to use in order to maximize crop yields. Finally, your company could specialize in data analysis to provide insights into regional agronomy trends and suggest strategies for improving yield and profitability.
4. The market analysis
When outlining your market analysis in the agronomy consulting company business plan, it's essential to include comprehensive details about customers' demographics and segmentation, target market, competition, barriers to entry, and relevant regulations.
The primary aim of this section is to give the reader an understanding of the market size and appeal while demonstrating your expertise in the industry.
To begin, delve into the demographics and segmentation subsection, providing an overview of the addressable market for your agronomy consulting company, key marketplace trends, and introducing various customer segments and their preferences in terms of purchasing habits and budgets.
Next, shift your focus to the target market subsection, where you can zoom in on the specific customer segments your agronomy consulting company targets. Explain how your products and services are tailored to meet the unique needs of these customers.
For example, your target market might include farmers who are looking to diversify their crop production. This could include farmers who are looking to grow crops in an environmentally sustainable way. They may need help in understanding the best practices for growing crops and consulting services to help them achieve their goals.
In the competition subsection, introduce your main competitors and explain what sets your agronomy consulting company apart from them.
Finally, round off your market analysis by providing an overview of the main regulations that apply to your agronomy consulting company.
5. The strategy section
When crafting the strategy section of your business plan for your agronomy consulting company, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.
In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.
The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.
For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.
In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.
Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.
Your agronomy consulting company faces a variety of risks. For example, you could face a risk of liability if a client claims that your services were inadequate or caused harm. Additionally, you might face a risk of financial losses if a project does not turn out as expected. For instance, you may incur costs if a crop fails due to unexpected weather conditions or pests. To minimize these risks, it is important to have reliable insurance coverage and contingency plans in place.
6. The operations section
In your business plan, it's also essential to provide a detailed overview of the operations of your agronomy consulting company.
Start by covering your team, highlighting key roles and your recruitment plan to support the expected growth. Outline the qualifications and experience required for each role and your intended recruitment methods, whether through job boards, referrals, or headhunters.
Next, clearly state your agronomy consulting company's operating hours, allowing the reader to assess staffing levels adequately. Additionally, mention any plans for varying opening times during peak seasons and how you'll handle customer queries outside normal operating hours.
Then, shift your focus to the key assets and intellectual property (IP) necessary for your business. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, make sure to include them in this section.
You may have key assets such as proprietary scientific models or software to help with agronomy decisions. This could include custom-designed decision support systems for crop monitoring and forecasting. Additionally, you might have intellectual property such as copyrights, trademarks, or patents related to agronomy or agriculture. These could include inventions, processes, or methods related to agronomy and crop production.
Lastly, include a list of suppliers you plan to work with, detailing their services and main commercial terms, such as price, payment terms, and contract duration. Investors are interested in understanding why you've chosen specific suppliers, which may be due to higher-quality products or established relationships from previous ventures.
7. The presentation of the financial plan
The financial plan section is where we will present the financial forecast we talked about earlier in this guide.
Now that you have a clear idea of what goes in your agronomy consulting company business plan, let's look at the solutions you can use to draft yours.
What tool should I use to write my agronomy consulting company's business plan?
In this section, we will be reviewing the two main solutions for creating an agronomy consulting company business plan:
- Using specialized online business plan software,
- Outsourcing the plan to the business plan writer.
Using an online business plan software for your agronomy consulting company's business plan
The modern and most efficient way to write an agronomy consulting company business plan is to use business plan software.
There are several advantages to using specialized software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
Hiring a business plan writer to write your agronomy consulting company's business plan
Outsourcing your agronomy consulting company business plan to a business plan writer can also be a viable option.
Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.
However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.
From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).
You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.
The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.
For these reasons, outsourcing the agronomy consulting company business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.
Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.
Why not create your agronomy consulting company's business plan using Word or Excel?
I must advise against using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write your agronomy consulting company business plan. Let me explain why.
Firstly, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is highly technical and requires a strong grasp of accounting principles and financial modelling skills. It is, therefore, unlikely that anyone will fully trust your numbers unless you have both a degree in finance and accounting and significant financial modelling experience, like us at The Business Plan Shop.
Secondly, relying on spreadsheets is inefficient. While it may have been the only option in the past, technology has advanced significantly, and software can now perform these tasks much faster and with greater accuracy. With the rise of AI, software can even help us detect mistakes in forecasts and analyze the numbers for better decision-making.
And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Moreover, software makes it easier to compare actuals versus forecasts and maintain up-to-date forecasts to keep visibility on future cash flows, as we discussed earlier in this guide. This task is cumbersome when using spreadsheets.
Now, let's talk about the written part of your agronomy consulting company business plan. While it may be less error-prone, using software can bring tremendous gains in productivity. Word processors, for example, lack instructions and examples for each part of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they don't handle formatting for you.
Overall, while Word or Excel may seem viable for some entrepreneurs to create a business plan, it's by far becoming an antiquated way of doing things.
- A business plan has 2 complementary parts: a financial forecast showcasing the expected growth, profits and cash flows of the business; and a written part which provides the context needed to judge if the forecast is realistic and relevant.
- Having an up-to-date business plan is the only way to keep visibility on your agronomy consulting company's future cash flows.
- Using business plan software is the modern way of writing and maintaining business plans.
We hope that this practical guide gave you insights on how to write the business plan for your agronomy consulting company. Do not hesitate to get in touch with our team if you still have questions.
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