Do you want to start an agro equipment company? If YES, here is a sample agriculture equipment manufacturing business plan template & FREE feasibility report. The fact that there is no commercial farm without standard agricultural equipment means that the market for agricultural equipment will always experience upper trajectory. As an investor that has the capacity and engineering background, you should look towards this line of business and interestingly there are unrestricted market for agricultural equipment.

Below is a sample agricultural equipment manufacturing company business plan template.

A Sample Agriculture Equipment Manufacturing Business Plan Template

1. Industry Overview

Companies in the tractors and agricultural machinery manufacturing industry manufacture agricultural machinery and equipment, in addition to powered lawn and garden equipment. Key agricultural equipment include tractors, harvesting and seeding machinery, grinders, mixers, wool presses, windmills and other hardware.

The Tractors and Agricultural Machinery manufacturing industry over time has experienced rapid growth due to rapid technological advancements, falling costs and new uses of agricultural machinery and equipment.

Going forward, the demand for agricultural machinery and equipment and of course the revenue generated are projected to increase rapidly as agricultural machinery and equipment manufacturing explodes in popularity and accessibility, especially in commercial farming markets.

Statistics has it that in the united states of America alone, there are about 1,371 registered and agricultural machinery and equipment manufacturing companies responsible for employing about 83,779 and the industry rakes in a whooping sum of $39 billion annually.

The industry was projected to enjoy -5.8 percent annual growth between 2014 and 2019. Although the industry is still pretty much open for new investors, but the establishments with the dominant market share in the industry are Deere & Company, CNH Industrial NV and AGCO Corporation.

Please note that the total U.S. industry market size for Tractors and Agricultural Machinery Manufacturing Industry statistics cover all companies in the United States, both public and private, ranging in size from small businesses to market leaders. In addition to revenue, the industry market analysis shows information on employees, companies, and average firm size et al.

Research carried out by IBISWorld estimates that industry revenue will decrease at an average annualized rate of 2.1 percent to $33.94 billion over the five years to 2015. Immediately following the recession, the industry performed strongly, with high crop prices boosting demand for ethanol and solid climate conditions. These factors boosted farm income and demand for tractors and other agricultural implements.

However, the industry began declining in 2013, as weak commodity prices, a stronger dollar and softening demand for rural produce has caused farmers to put off new equipment purchases. In 2015, revenue is expected to continue declining. Global demand is expected to continue weakening as the dollar continues to increase and interest rate hikes are introduced.

If you are looking towards starting your own tractors and agricultural machinery manufacturing business, then you should endeavor to do your research, set the required structure and assemble the required team.

The tractors and agricultural machinery manufacturing business is still open to new entrepreneurs and investors to come in and build a successful business. But they must first and foremost ensure that they conduct thorough feasibility studies and market survey before situating the business in any location.

2. Executive Summary

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is a U.S based agricultural machinery manufacturing company. We have been able to secure a standard production facility in a conducive environment in Lake Tahoe – Nevada. We chose to start in Lake Tahoe because the city has continued to be a major center for venture capital investment.

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. will be involved in the manufacturing of agricultural machinery and equipment such as tractors, harvesting and seeding machinery, grinders, mixers, wool presses, windmills and other hardware.

We will also be involved in the manufacturing of powered lawn and garden equipment for homes. Our business goal is to become one of the leading agricultural machinery manufacturing company in the United States and we will make sure that every agricultural machinery that leaves our production facility can favorably compete with the best in the industry.

Our workers are going to be selected from a pool of talented and highly creative engineers in and around Lake Tahoe – Nevada. We will make sure that we take all the members of our workforce through the required trainings that will position them to meet the expectation of the company.

At Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. our client’s best interest come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by delivering excellent and efficient tractors and agricultural machinery and also meeting our client’s needs precisely and completely.

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is a private business that is owned and managed by Mr. Darren Stanley and his immediate family members. Darren Stanley studied Printing Technology from Illinois Institute of Technology and he has over 22 years’ experience working with the leading agricultural machinery manufacturing companies in the United States of America.

3. Our Products and Services

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is established with the aim of maximizing profits in the industry. We want to compete favorably with companies in the United States of America which is why we have but in place a competent quality assurance team that will ensure that all the agricultural machinery that we manufacture meet and even surpass our customers’ expectations.

We will work hard to ensure that Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is not just accepted in Lake Tahoe – Nevada but also throughout the United States of America.

We will be involved in the;

  • Manufacturing farm tractors and attachments
  • Manufacturing harvesting equipment and machinery
  • Manufacturing irrigation equipment
  • Manufacturing seeders
  • Manufacturing sprayers and spreaders
  • Manufacturing windmills
  • Manufacturing powered agricultural mowers
  • Manufacturing livestock feeding and watering equipment

4. Our Mission and Vision Statement

  • Our vision is to establish a standard and world class agricultural machinery manufacturing company whose products and brand will not only be accepted in Lake Tahoe – Nevada and throughout the United States of America.
  • Our mission is to build a world class tractors and agricultural machinery manufacturing company that will be known to manufacture top notch tractors and agricultural machinery and to become the number one choice for the agriculture sector and other stake holder in and around the United States.
  • We want to build a company that can favorably compete with other leading brands in the industry.

Our Business Structure

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. intends starting small in Lake Tahoe – Nevada, but hopes to grow big in order to compete favorably with leading companies in the industry. We are aware of the importance of building a solid business structure that can support the kind of world class business we want to own. This is why we are committed to only hire the best hands within our area of operation.

At Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc., we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

  • Chief Executive Officer (Owner)
  • Plant Manager
  • Human Resources and Amin Manager
  • Sales and Marketing Manager
  • Engineers and Technologists
  • Accountants/Cashiers
  • Customer Services Executive/Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

  • Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
  • Responsible for fixing prices and signing business deals
  • Accountable for providing direction for the business
  • Creates, communicates, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
  • Responsible for signing checks and documents on behalf of the company
  • Evaluates the success of the organization
  • Reports to the board

Admin and HR Manager

  • Responsible for overseeing the smooth running of HR and administrative tasks for the organization
  • Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
  • Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
  • Defines job positions for recruitment and managing interviewing process
  • Carries out staff induction for new team members
  • Responsible for training, evaluation and assessment of employees
  • Responsible for arranging travel, meetings and appointments
  • Supervises the smooth running of the daily office activities.

Plant Manager:

  • Responsible for overseeing the smooth running of the production plant
  • Responsible for approving tractors and agricultural machinery designs and concepts
  • Part of the team that determines the quantity of tractors and agricultural machinery and other products that are to be produced
  • Maps out strategies that will lead to efficiency amongst workers in the factory
  • Responsible for training, evaluation and assessment of factory workers
  • Ensures that the steady flow of both raw materials to the factory and easy flow of finished products through wholesale distributors to the market
  • Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
  • Ensures that the factory meets the expected safety and health standard at all times.
  • Interfaces with third – party suppliers (vendors) of raw materials
  • Controls tractors and agricultural machinery distribution and supply inventory
  • Supervises the workforce in the factory.

Sales and Marketing Manager

  • Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
  • Models demographic information and analyze the volumes of transactional data generated by customer purchases
  • Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
  • Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
  • Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
  • Document all customer contact and information
  • Represent the company in strategic meetings
  • Help increase sales and growth for the company

Engineers and Technologists

  • Responsible for designing and manufacturing of farm tractors and attachments
  • Harvesting equipment and machinery
  • Irrigation equipment
  • Seeders
  • Sprayers and spreaders
  • Powered agricultural mowers
  • Livestock feeding and watering equipment

Accountant/Cashier:

  • Responsible for preparing financial reports, budgets, and financial statements for the organization
  • Provides managements with financial analyses, development budgets, and accounting reports
  • Responsible for financial forecasting and risks analysis.
  • Performs cash management, general ledger accounting, and financial reporting
  • Responsible for developing and managing financial systems and policies
  • Responsible for administering payrolls
  • Ensures compliance with taxation legislation
  • Handles all financial transactions for the organization
  • Serves as internal auditor for the organization

Client Service Executive/Front Desk Officer

  • Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
  • Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
  • Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
  • Manages administrative duties assigned by the manager in an effective and timely manner
  • Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
  • Receives parcels/documents for the company
  • Distribute mails in the organization
  • Handles any other duties as assigned by the line manager

6. SWOT Analysis

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. employed the services of a core professional in the area of business consulting and structuring to assist our organization in building a well – structured tractors and agricultural machinery manufacturing business that can favorably compete in the highly competitive industry in the United States

Part of what the business consultant did was to work with the management of our organization in conducting a SWOT analysis for Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc.;

  • Strength:

Our core strength lies in the power of our team; our workforce. We have a team of creative and highly proficient agricultural machinery manufacturing engineers and technologists, a team with excellent qualifications and experience in various niche areas in the industry.

Aside from the synergy that exists in our carefully selected agricultural machinery manufacturing technologists and engineers, we have some of the latest and efficient tractors and agricultural machinery and of course our work output and products will be guided by international best practices.

  • Weakness:

As a new tractors and agricultural machinery manufacturing company in Lake Tahoe – Nevada, it might take some time for our organization to break into the market and gain acceptance especially from the government and other high – profile clients in the highly competitive industry; that is perhaps our major weakness. Another weakness is that we may not have the required cash to promote our business the way we would want to.

  • Opportunities:

Private investment in computers and software signals a greater focus on technological change. In particular, this investment has an effect on demand for industry products. As connectivity- and autonomy-supporting technology advances in farm equipment, consumers are incentivized to purchase new equipment to take advantage of efficiency gains.

The level of investment in computers and software is expected to rise in the coming year, representing a potential opportunity for this industry. Expected technological advances are forecast to incentivize new purchases.

  • Threat:

Many tractors and related machinery products are purchased on credit. When interest rates increase, demand for new products from this industry generally decreases due to higher financing costs. Farmers’ inability to purchase equipment at a high prime rate drives down demand and impedes industry growth. The prime rate, a proxy for all interest rates, is expected to rise in the coming year, representing a potential threat to this industry.

7. MARKET ANALYSIS

  • Market Trends

Over the five years to 2015, the US farming segment has also experienced growth in corporatization and consolidation. Price competition has particularly resulted in major consolidation within the industry, causing many smaller industry players to exit the market, as larger players acquire the smaller companies.

Demand for large tractors over 100 horsepower has gone up in response to this trend. Profit is expected to remain stable over the five-year period to 2021 as rising labor productivity will help maintain profitability.

Recent trends in the agricultural machinery manufacturing industry shows that rise and fall in market prices are key factors that affected by supply, demand, and the cost of goods/services sold. Higher demand or COGS will put upward pressure on prices. Higher competition among Tractors & Agricultural Machinery Manufacturing companies will put a downward pressure on prices.

8. Our Target Market

Before starting our agricultural machinery manufacturing company, we are certain that there is a wide range of both business and individual clients who will need our products. We will ensure that we develop strategic pacts with major players in the agricultural sector.

This will give us several options to generate revenue for our company. In view of that, we have created strategies that will enable us reach out to our target market and for the start, we will concentrate only on;

  • Commercial crop farmers
  • Cattle farmers
  • Poultry farmers
  • Hydroponic farmers
  • Cow and calf operation business owners
  • Fish and seafood farmers
  • Fish hatcheries
  • Tractors and agricultural machinery merchants
  • Landscapers

Our competitive advantage

We are quite aware that to be highly competitive in the Tractors and Agricultural Machinery Manufacturing industry means that you are not only expected to be able to deliver consistent and highly efficient agricultural machinery, but you must be able to meet set targets. No one would want to continue to order products from you if your products are not reliable.

Our competitive advantage lies in the power of our team; our workforce. We have a team of creative and highly proficient tractors and agricultural machinery manufacturing technologists and engineers, a team with excellent qualifications and experience in various niche areas in the industry.

Aside from the synergy that exists in our carefully selected agricultural machinery manufacturing technologists and engineers, we have some of the latest and efficient production machines and equipment and of course our work output and product will be guided by international best practices in the industry.

Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.

9. SALES AND MARKETING STRATEGY

We are not ignorant of the fact that there are growing competitions in the Tractors and Agricultural Machinery Manufacturing industry which is why we have been able to hire some of the best marketing experts to handle our sales and marketing.

Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be well equipped to meet their set targets and the overall business goal of Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc.

Our goal is to grow Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. to become one of the leading agricultural machinery manufacturing companies in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force to reckon with not only in Lake Tahoe – Nevada but also in other cities in the United States of America

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is set to make use of the following marketing and sales strategies to attract clients and win contracts;

  • Introduce our tractors and agricultural machinery manufacturing company by sending introductory letters alongside our brochure to players in the agricultural sector and key stake holders in and around the United States of America.
  • Promptness in bidding for tractors and agricultural machinery supply contracts from the government and other larger farming corporations
  • Advertise our business in relevant tractors and agricultural machinery magazines, newspapers, TV and radio stations
  • List our business on yellow pages ads (local directories)
  • Attend relevant international and local expos, seminars, and business fairs et al
  • Create different packages for different category of clients in order to work with their budgets
  • Leverage on the internet to promote our business
  • Engage direct marketing approach
  • Join local chambers of commerce and industries to network and market our services
  • Encourage word of mouth marketing from loyal and satisfied clients

Sources of Income

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is established with the aim of maximizing profits in the Tractors and Agricultural Machinery Manufacturing industry and we are going to go ensure that we do all it takes to meet and surpass the expectations of all our clients.

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. will generate income by engaging in;

  • Manufacturing farm tractors and attachments
  • Manufacturing harvesting equipment and machinery
  • Manufacturing irrigation equipment
  • Manufacturing seeders
  • Manufacturing sprayers and spreaders
  • Manufacturing windmills
  • Manufacturing powered agricultural mowers
  • Manufacturing livestock feeding and watering equipment

10. Sales Forecast

We are well positioned to take on the available market in Tractors and Agricultural Machinery Manufacturing industry and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow our company to enviable heights.

We have been able to examine the agricultural machinery manufacturing market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc., it is based on the location of our business and of course the wide range of our products and target market;

  • First Fiscal Year (FY1): $1.2 million
  • Second Fiscal Year (FY2): $2 million
  • Third Fiscal Year (FY3): $4.7 million

N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

11. Publicity and Advertising Strategy

We have been able to work with brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to become the number one choice for both corporate and individual clients in the whole of the Lake Tahoe and beyond which is why we have made provisions for effective publicity and advertisement of our company.

Below are the platforms we intend to leverage on to promote Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc.;

  • Place adverts on both print (newspapers and magazines) and electronic media platforms
  • Sponsor relevant community – based events/programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our services
  • Install our Bill Boards in strategic locations all around Lake Tahoe – Nevada
  • List our tractors and agricultural machinery manufacturing company in local directories / yellow pages
  • Advertise our tractors and agricultural machinery manufacturing company in our official website and employ strategies that will help us pull traffic to the site.
  • Ensure that all our staff members wear our branded shirts and all our vehicles and trucks are well branded with our company logo et al.

12. Our Pricing Strategy

At Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. we will adopt all the pricing system as is obtainable in the industry but we will ensure that we keep the prices of our agricultural machinery and after sale maintenance services a little below the average market rate by keeping our overhead low and by collecting payment in advance from our customers. In addition, we will also offer special discounted rates to all our customers at regular intervals.

  • Payment Options

The payment policy adopted by Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. will make available to her clients;

  • Payment via bank transfer
  • Payment via online bank transfer
  • Payment via mobile money
  • Payment via Point of Sales Machines
  • Payment via check
  • Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for our agricultural machinery and after sale maintenance services without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

This is what it would cost us to setup Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. in Lake Tahoe – Nevada, U.S;

  • Business incorporating fees in the United States of America will cost – $750.
  • The budget for Liability insurance, permits and license will cost – $3,500
  • Acquiring a standard production facility that will accommodate the number of employees for at least 6 months (Re – Construction of the facility inclusive) will cost – $350,000.
  • The amount needed to purchase the needed production machines and raw materials – $1.2 million
  • Equipping the office (computers, 3D printing machines and equipment, servers / internet facility, furniture, telephones, filing cabinets, and electronics) will cost – $150,000
  • Amount required to purchase the needed software applications – $ 3,500
  • Launching an official Website will cost – $500
  • Amount need to pay bills and staff members for at least 2 to 3 months – $70,000
  • Additional Expenditure such as Business cards, Signage, Adverts and Promotions will cost – $5,000

Going by the report from the market research and feasibility studies conducted, we will need about $2.5 million to successfully set up a medium scale agricultural machinery manufacturing company in the United States of America.

Generating Funds/Startup Capital for Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc.

Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is a family business that will be owned by Mr. Darren Stanley and his immediate family members. They decided to restrict the sourcing of the start-up capital for the business to just three major sources.

  • Generate part of the startup capital from personal savings and sale of his stocks
  • Generate part of the startup capital from friends and other extended family members
  • Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $700,000 (Personal savings $500,000 and soft loan from family members $200,000) and we are at the final stages of obtaining a loan facility of $1.5 million from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

Part of the plans we have in place to sustain Darren Stanley™ Agricultural Equipment Manufacturing Company, Inc. is to ensure that we continue to make available quality and reliable agricultural machinery, after sales maintenance services and improvise on how to do things faster and cheaper.

We are not going to relent in providing conducive environment for our workers and also the required trainings that will help them deliver excellent services at all times.

We are quite aware that our customers are key components to the growth and survival of our business hence we are going to continuously engage them to give us ideas on how to serve them better. We will not waste time in adopting new technology, best practices and diversifying our services.

Our key sustainability and expansion strategy as a business is to ensure that we only hire competent and technically sound employees, create a conducive working environment and employee benefits for all our staff members. We know that if we implement our business strategies, we will grow our agricultural machinery manufacturing business beyond Lake Tahoe – Nevada to other states in the U.S in record time.

Check List/Milestone

  • Business Name Availability Check: Completed
  • Business Incorporation: Completed
  • Opening of Corporate Bank Accounts: Completed
  • Opening Online Payment Platforms: Completed
  • Application and Obtaining Tax Payer’s ID: In Progress
  • Securing a standard production facility plus renovation of the facility: Competed
  • Application for business license and permit: Completed
  • Purchase of Insurance for the Business: Completed
  • Conducting Feasibility Studies: Completed
  • Generating part of the startup capital from the founders: Completed
  • Writing of Business Plan: Completed
  • Drafting of Employee’s Handbook: Completed
  • Drafting of Contract Documents: In Progress
  • Design of Logo for the business: Completed
  • Secure trademark for our products: In Progress
  • Printing of Packaging Marketing/Promotional Materials: Completed
  • Recruitment of employees: In Progress
  • Purchase of the needed tractors and agricultural machinery production machines and other equipment: Completed
  • Purchase of the needed furniture, office equipment, software applications, electronic appliances and facility facelift: In progress
  • Creating Official Website for the business: In Progress
  • Creating Awareness for the business: In Progress
  • Health and Safety and Fire Safety Arrangement: In Progress
  • Establishing business relationship with vendors and key players in the agricultural industry: In Progress
Solomon. O'Chucks