Do you want to start an Alfalfa farm and need to write a business plan? If YES, here is a sample Alfalfa farm business plan template & feasibility report.
There are some unique crops that have pretty high nutritional value for animals that an aspiring entrepreneur who is interested in the commercial hay and crop industry can start and make huge returns on his or her investment and one of such businesses is alfalfa farming.
Starting an alfalfa farming business comes with its own fair share of challenges, but that does not rule out the fact that it is indeed a profitable business venture. An aspiring entrepreneur can either choose to start an alfalfa farm on a small or large scale depending on their financial status.
A Sample Alfalfa Farming Business Plan Template
1. Industry Overview
Alfalfa is crop that is widely grown throughout the world as forage for cattle, and is most often harvested as hay, but can also be made into silage, grazed, or fed as green – chop. Alfalfa usually has the highest feeding value of all common hay crops. It is used less frequently as pasture.
Alfalfa farmers are part of the Hay and Crop industry and more than half of the farms in this industry grow hay, while a small number grow sugar beets. A variety of other crops, such as hops and herbs are included in the industry. Some establishments also gather agave, spices, tea and maple sap.
The Hay and Crop industry displays a low level of concentration. The industry is highly fragmented; no single hay and crop farmer/farm holds a lion share of the available market share in the industry. Alfalfas farmers are typically niche farmers, operating on small farm land with no more than a few hundred trees.
Statistics has it that in the united states of America alone, there are about 441,166 registered and licensed hay and crop farmers responsible for employing about 486,066 and the industry rakes in a whooping sum of $31 billion annually.
The industry was projected to enjoy -0.9 percent annual growth between 2014 and 2019. Studies show that California is the largest producer of alfalfa in the United States followed by Idaho & Montana. The United States produces over 57.5 million tons of alfalfa. Twenty (20) states produce over 1 million tons of alfalfa.
A recent report published by IBISWorld shows that farmers in the industry produce hay, sugar beets, maple, hops and other crops. In the five years to 2010, industry revenue is expected to grow at an average annual rate of 1.6 percent to $17.0 billion.
Volatile crop prices and unexpected weather patterns are the primary drivers of industry revenue. Varying factors have different effects on the distinct product segments, which ultimately creates high volatility in both revenue and profit for industry participants.
The majority of these are hay farms, reflecting hay’s position as the highest-grossing industry product. In 2010, IBISWorld estimates that hay varieties account for 88.2 percent of total industry revenue, while sugar beets account for 8.8 percent and the rest of the crops account for 3.0 percent.
2. Executive Summary
Cattle Chops® Alfalfa Farms, Inc. is a world class and registered commercial hay and crop farm that will be based in the outskirt of Idaho Falls, Idaho – United States. We have done our detailed market research and feasibility studies and we were able to secure a well – situated farm land to start our commercial alfalfa farming business.
Our commercial alfalfa farm is a going to be a standard one hence will be involved in commercial alfalfa cultivation, processing and packaging.
We have put plans in place that will help us launch a standard processing plant within the first three years of officially running Cattle Chops® Alfalfa Farms, Inc. Our produce will flood the market in the United States; we want to compete with the best in the industry.
Aside from the fact that we’ve secured the required farming land and most of the farming equipment and machines, we have also hired some key employees who are currently undergoing training so as to be able to fit into the ideal picture of the 21st century commercial alfalfa farm workforce that we want to build.
Cattle Chops® Alfalfa Farms, Inc. is well positioned to become one of the leading alfalfa farms in the United States of America, which is why we have been able to source for the best hands and farm machineries to run the farm with. We have put process and strategies in place that will help us employ best practices when it comes to alfalfa farming processes, processing and packaging as required by the regulating bodies in the United States of America.
Cattle Chops® Alfalfa Farms, Inc. is owned and financed by Mr. Thomas Carnegie and his immediate family members. Before starting Cattle Chops® Alfalfa Farms, Inc., Thomas Carnegie has worked with some of the leading commercial hay and crop farms in the United States of America; he has a degree (B.Sc.) in Agriculture Science from University of Idaho.
3. Our Products and Services
Cattle Chops® Alfalfa Farms, Inc. is a world class commercial hay and crop farm that is committed to cultivating alfalfa crops for both the United States and global market. We are in business to produce fodder for animals in commercial quantities.
We will also ensure that we operate a standard processing and packaging plant as part of our complimentary business. These are the areas we will concentrate on in our alfalfa farm. If need arises, we will definitely cultivate related crops;
- Growing alfalfas
- Producing silage, grazed, and fed as green – chop
4. Our Mission and Vision Statement
- Our vision is to establish an alfalfa farm that will become the number one choice for cattle farmers not just in Idaho Falls – Idaho but throughout the United States of America.
- Cattle Chops® Alfalfa Farms, Inc. is in business to cultivate alfalfa in commercial quantities and process silage for both the United States and the international market.
- We want our produce to flood every nooks and crannies of the United States of America.
Our Business Structure
Cattle Chops® Alfalfa Farms, Inc. is an alfalfa farm that intend starting small in Idaho Falls – Idaho, but hopes to grow big in order to compete favorably with leading alfalfa farms in the commercial hay and crop farming industry in the United States.
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. At Cattle Chops® Alfalfa Farms, Inc., we will ensure that we hire people that are qualified, hardworking, dedicated, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders.
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 management of the farm. In view of the above, Cattle Chops® Alfalfa Farms, Inc. have decided to hire qualified and competent hands to occupy the following positions;
- Chief Operating Officer
- General Farm Manager
- Administrator/Accountant
- Alfalfa Processing and Packaging Plant Manager
- Sales and Marketing Executive
- Field Employees
- Front Desk Officer
5. Job Roles and Responsibilities
Chief Operating Officer:
- 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
- Creating, communicating, 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 fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
General Farm Manager
- Responsible for the planning, management and coordinating all farm activities
- Supervise other section managers
- Ensure compliance during project executions
- Providing advice on the management of farming activities across all sections
- Responsible for carrying out risk assessment
- Using IT systems and software to keep track of people and progress of the growth of crops
- Represent the organization’s interest at various stakeholders’ meetings
- Ensures that farming goals desired are achieved, the most efficient resources are utilized and different interests involved are satisfied.
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Oversee the smooth running of the daily farming activities across the various farming sections.
Administrator/Accountant
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Responsible for financial forecasting and risks analysis.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the farm
- Serves as internal auditor for the farm
Alfalfas Cultivation Manager/Supervisor
- Responsible for managing the cultivation section of the farm
- Supervises other workers within the department
- Work closely with the General Manager to achieve the organizations’ goals and objectives
Alfalfa Processing and Packaging Manager/Supervisor
- Supervises other workers within the department
- Work closely with the General Manager to achieve the organizations’ goals and objectives
Sales and Marketing Officer
- Identify, prioritize, and reach out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts.
- Writing winning proposal documents, negotiate fees and rates in line with company policy
- Responsible for handling business research, marker surveys and feasibility studies for clients
- 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 farm
Field Workers/Contract Staff
- Responsible for preparing farm land for cultivation
- Responsible for watering the crop
- Weeding or fertilizer and/or pest control application
- Assist in handling the harvest of alfalfas
- Carries out task in line with the stated job description
- Assist in transport working tools and equipment from the farm and back to the designated store room
- Handles any other duties as assigned by the line manager
Client Service Executive/Front Desk Officer
- Welcomes guests and clients to the farm 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
- 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 organization
- Distribute mails in the organization
- Handles any other duties as assigned by the line manager
6. SWOT Analysis
Cattle Chops® Alfalfa Farms, Inc. do not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis.
We know that if we get it right from the onset, we would have succeeded in creating the foundation that will help us build a standard alfalfa farm that will favorably compete with leading commercial alfalfa farms in the United States of America.
We are quite aware that there are several alfalfa farms in Idaho Falls – Idaho, which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Cattle Chops® Alfalfa Farms, Inc. employed the services of an expert HR and Business Analyst with bias in the commercial hay and crop farming industry to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
Here is a summary from the result of the SWOT analysis that was conducted on behalf of Cattle Chops® Alfalfa Farms, Inc.;
- Strength:
Our strength as an alfalfa farm is the fact that we have healthy relationships with loads of major players in the industry within and outside of the United States. We have some of the latest commercial farming machines, tools and processing equipment that will help us cultivate alfalfas in commercial quantities with less stress.
Aside from our relationship (network) and equipment, we can confidently boast that we have some the most experienced hands in Idaho Falls – Idaho in our payroll.
- Weakness:
Our weakness could be that we are a new alfalfa farms in the United States, and perhaps the fact that we decided to diversify our farming activities could count against us initially. We are aware of this and from our projection we will overcome this weakness with time and turn it to a major advantage for the business.
- Opportunities:
The opportunities that are available to us cannot be quantified, we know that there are loads of cattle farmers and horse breeders that rely on the supply of olives from alfalfa farms. We will ensure that we maximize the opportunities available to us. As prices increase with increased demand, alfalfa farmers will begin to experience revenue growth.
- Threat:
Livestock farmers regularly purchase hay as feed for their herds. Demand for hay usually increases during adverse weather conditions when the area of natural pastures is lower. Demand from beef cattle production is expected to increase this year; however, the unpredictable nature of demand with respect to consumer preferences and international trade poses a potential threat to the industry.
7. MARKET ANALYSIS
- Market Trends
Alfalfa farming has been in existence since time immemorial, but does not in any way make the industry to be over saturated. Farmers are now exploring new technology to continue to improve the cultivation process. The fact that there is always a ready market for alfalfa makes the business highly thriving and profitable.
Lastly, the diverse composition of the industry creates a mixed bag of trends. An individual farm is not profitable in any given year, but a farmer is likely to see a profit over the long run as a result of mixed crops and successful rotation. With that in mind, profits have fallen over the past five years as a result of increased input costs, particularly fertilizer, and unprecedented economic conditions.
Hay farming displayed steady revenue growth over the three years to 2008 as an increasing number of cattle farmers turned to hay instead of high-priced corn and soybean feed. However, in 2009, livestock farmers’ efforts to cut input costs turned them away from high-protein alfalfa hay in favor of lower-priced feed mixes.
8. Our Target Market
We will ensure that we position our business to attract consumers not just in the United States of America alone but also other parts of the world which is why we will be exporting some of our produce either in raw form or processed form to other countries of the world.
Below are some of our target market;
- Cattle farmers
- Horse breeders
- Sheep farmers
- Goat farmers
- Horse owners
Our Competitive Advantage
Cattle Chops® Alfalfa Farms, Inc. is fully aware that there are competitions when it comes to selling commercial alfalfa all over the globe, which is why we decided to carry out thorough research so as to know how to take advantage of the available market in the United States.
We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are effective and reliable alfalfa farming processes that can help us sell our produce at competitive prices, robust business and distribution network and excellent relationship management.
Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we will operate an all – round alfalfa farm that will also include a processing plant. With this, we will be able to take advantage of all the available opportunities within the industry.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Cattle Chops® Alfalfa Farms, Inc. is in the commercial hay and crop farming business for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry to achieve our corporate goals and objectives.
Below are the sources we intend exploring to generate income for Cattle Chops® Alfalfa Farms, Inc.;
- Sale and supply of freshly harvested alfalfa crops
- Sale and supply of silage, grazed, and fed as green – chop
10. Sales Forecast
We conducted a thorough market survey and feasibility studies and we were able to discover that the sales generated by a commercial hay and crop farm depends on the size of the farm and the nature of the commercial hay and crop farm.
We have perfected or sales and marketing strategies and we are quite optimistic that we will meet or even surpass our set sales target of generating enough income/profits from the first year of operation and build the business from survival to sustainability.
We have been able to examine the hay and crop farming industry cum alfalfa farm line business and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some workable assumptions with respect to the nature of alfalfa farm that we run.
Below are the projections that we were able to come up with for the first three years of running Cattle Chops® Alfalfa Farms, Inc.;
- First Fiscal Year (FY1): $200,000
- Second Fiscal Year (FY2): $350,000
- Third Fiscal Year (FY3): $400,000
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 that can impact negatively on household spending, bad weather cum natural disasters (drought, epidemics and floods), and unfavorable government policies. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
We are quite aware that the reason why some alfalfa farms hardly make good profits is their inability to sell off their crops as at when due. In view of that, we decided to set up a standard processing plant to help us maximize profits. Our sales and marketing team will be recruited base 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 targets and the overall goal of the organization.
In summary, Cattle Chops® Alfalfa Farms, Inc. will adopt the following strategies in marketing our alfalfa farm produce;
- Introduce our business by sending introductory letters alongside our brochure to stake holders in the cattle farming industry, horse breeders, sheep farmers, goat farmers and horse owners et al.
- Advertise our business in agriculture and cattle farmers related magazines and websites
- List our alfalfa farms on yellow pages ads
- Attend related agriculture and animal feed expos, seminars, and business fairs et al
- Leverage on the internet to promote our business
- Engage in direct marketing
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Any business that wants to grow beyond the corner of the street or the city they are operating from must be ready and willing to utilize every available means to promote the business. We intend growing our business which is why we have perfected plans to build our brand via every available means.
Below are the platforms you can leverage on to boost our alfalfa farm brand and to promote and advertise our business;
- 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 business
- Install our Billboards in strategic locations all around Idaho Falls – Idaho
- Distribute our fliers and handbills in target areas
- List our alfalfa farms in local directories / yellow pages
- Advertise our alfalfa farms 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
Some of the factors that will help you sell your alfalfas at the right price that will guarantee that you make profits is dependent on your strategy while some of the factors are beyond your control. For example, if the climatic condition is unfavorable and if there are natural disasters in the location where you have your alfalfa farm, then it will directly affect your harvest.
In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our alfalfa crops are sold a little bit below the average price in the United States of America. We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our business.
- Payment Options
The payment policy adopted by Cattle Chops® Alfalfa Farms, 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 Cattle Chops® Alfalfa Farms, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via check
- Payment via Point of Sale Machines (POS Machines)
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our clients make payment for our farm produce without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
Below are some of the basic areas we will spend our startup capital in setting up our alfalfa farm;
- The total fee for incorporating the business in United States of America – $750.
- The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
- The amount needed to acquire / lease a farm land – $50,000
- The amount required for preparing the farm land – $70,000
- The cost for acquiring the required working tools and equipment / machines / fencing et al – $10,000
- The amount required for purchase of the first set of alfalfa seedlings et al – $50,000
- The amount required to set up a standard silage, grazed, and fed as green – chop processing plant within the farm facility – 100,000
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost of launching an official website – $600
- The amount required for payment of workers for a period of 3 months – $100,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,000
Going by the report from detailed research and feasibility studies conducted, we will need an average of two hundred and fifty thousand dollars ($250,000) to start a standard alfalfa farm with processing plant business in the United States of America.
Generating Funds/Startup Capital for Cattle Chops® Alfalfa Farms, Inc.
Cattle Chops® Alfalfa Farms, Inc. is owned and managed by Thomas Carnegie and his immediate family members. They are the sole financier of the firm, but may likely welcome other partners later which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.
These are the areas where we intend sourcing for fund for Cattle Chops® Alfalfa Farms, Inc.;
- 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 $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $150,000 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
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.
One of our major goals of starting Cattle Chops® Alfalfa Farms, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our farm produce a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Cattle Chops® Alfalfa Farms, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our organization’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more as determined by the management of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
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
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of farm land in Idaho Falls – Idaho and preparing the farm land: Completed
- Conducting Feasibility Studies: Completed
- Startup Capital Generation: Completed
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Building/construction of fence et al: In Progress
- Purchase of the needed working tools, machines and equipment: Completed
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Farm land Treatment, Health and Safety Arrangement: In Progress
- Establishing business relationship with vendors and key players in the industry (cattle farmers, fertilizer suppliers and transporter / haulage companies et al): Completed