Do you want to start a potato farm and need to write a business plan? If YES, here is a sample potato farming business plan template & feasibility report.
A potato farming business is one of the businesses in the farming industry that is bound to continue to succeed because potatoes are consumed by almost everybody in the United States, it is considered a stable food. Potato farming is known to be a profitable business and over the years, it has evolved from small scale backyard farming to a global industry.
Potato 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 on a small scale or on a large scale depending on their financial status.
A Sample Potato Farming Business Plan Template
1. Industry Overview
Potato plants are herbaceous perennials that grow about 60 cm (24 in) high, depending on variety, with the leaves dying back after flowering, fruiting and tuber formation. They bear white, pink, red, blue, or purple flowers with yellow stamens.
The tubers of varieties with white flowers have white skins, while those of varieties with colored flowers tend to have pinkish skins. Potatoes are generally grown from seed potatoes, and tubers are grown to be free from disease and to provide consistent and healthy plants. To be disease free, the areas where seed potatoes are grown are selected with care.
In the US, this restricts production of seed potatoes to only 15 states out of all 50 states where potatoes are grown. These locations are selected for their cold, hard winters that kill pests and summers with long sunshine hours for optimum growth.
The potato farming industry grows potatoes, sweet potatoes and yams. Potatoes are a staple food product in many parts of the world and can also be used to in the manufacture of other products, including processed snack foods, alcoholic spirits and animal feed.
Potatoes are the most widely produced vegetable in the united states and form a well-accepted component of prepared dishes and snack foods. In fact, over 50.0 percent of the annual potato crop is destined to become french fries, with 60.0 percent of industry revenue stemming from sales to food processors.
Overall, potato producers have been working to reduce production to uplift potato prices, which has had a mixed effect on industry revenue growth. Sweet potatoes’ popularity has increased in recent years, while that of white potatoes has decreased somewhat; according to the latest full-year data.
Statistics has it that in the United States of America alone, there are about 30,484 licensed and registered commercial potato farms responsible for employing about 45,701 employees and the industry rakes in a whooping sum of $5 billion annually with an annual growth rate projected at -1.5 percent between 2013 and 2018.
A recent report published by IBISWorld shows that the net effect of reduced prices has stalled the Potato Farming industry’s growth over the five years to 2018. Moreover, the appreciation of the US dollar has made potatoes more expensive and less competitive on the global market, resulting in constrained export volumes.
The industry is in a constant balancing act with downstream markets, trying to keep its output at levels that will yield desirable selling prices.
However, this is not a surefire strategy; for example, a bumper crop in 2012 led to a surplus, causing prices to drop. Over the five years to 2023, industry growth is expected to be driven primarily by crop price appreciation and increases in export volumes.
Lastly, with commercial potato farming it will pay you not to only cultivate potato but to start a complimentary business like potato processing plant. The bottom line is that if you have enough farming land and you are interested in maximizing commercial potato farming, you are sure going to make huge profits from the business.
2. Executive Summary
Garry Benjamin® Potato Farms, Inc. is a registered commercial potato farm that will be based in the outskirts of Green Bay, Wisconsin – United States. We have done our detailed market research and feasibility studies and we were able to secure a suitable farm land to start our commercial potato farming.
Our commercial potato farm is a going to be a standard commercial potato farm hence will be involved in both commercial potato cultivation, processing and packaging.
We have put plans in place that will help us launch a standard and world-class potato processing plant within the first three years of officially running Garry Benjamin® Potato Farms, Inc. We will process and package potato and ensure that they flood the market in the United States.
We want to compete with the best in the industry which is why aside from the fact that we’ve secured the required land and farming equipment and machines, we have also hired some key employees who are currently undergoing training so as to fit into the picture of the 21st century commercial potato farm workforce that we want to build.
We are in the commercial potato farming business because we want to leverage on the vast opportunities available in the industry to contribute our quota in growing the U.S. economy, in national food production, to export agriculture produce from the United States to other countries and over and above to make profit.
Garry Benjamin® Potato Farms, Inc. is well positioned to become one of the leading commercial potato 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 commercial potato farming. Garry Benjamin® Potato Farms, Inc. is owned by Mr. Garry Benjamin and his immediate family members. The farm cum business will be financed by Garry Benjamin and his immediate family members.
Before starting Garry Benjamin® Potato Farms, Inc., Garry Benjamin has worked with some of the leading commercial farms and food processing plants in the United States of America; he has a degree (B.Sc.) in Agriculture Science from University of Wisconsin.
3. Our Products and Services
Garry Benjamin® Potato Farms, Inc. is a world class commercial farm that is committed to cultivating both organic and non – organic potato for both the United States’ market and the global market. We are in business to produce both food and raw materials for people, animals and industries.
We will also ensure that we operate a standard potato processing and packaging plant as part of our complimentary business.
We are in this line of business to make profits, and we will ensure that we do all that is allowed by the law of the United States of America to achieve our business goals and objectives. These are the areas we will concentrate on in our commercial potato farms. If need arises, we will definitely cultivate related crops;
- Cultivation of different variety of potato (organic and non – organic)
- Processing potatoes
4. Our Mission and Vision Statement
- Our Vision is to become one of the top 5 commercial potato farms not just in the United States of America but also on the global stage.
- Garry Benjamin® Potato Farms, Inc. is a world class commercial potato farms that is in business to cultivate potato in commercial quantities both organic and non – organic and processed potato for both the United States market and the international market.
- We want our well – packaged potato to flood the United States.
Our Business Structure
Garry Benjamin® Potato Farms, Inc. is a commercial potato farm that intends starting small in Green Bay – Wisconsin, but hopes to grow big in order to compete favorably with leading commercial potato farms 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. At Garry Benjamin® Potato 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, Garry Benjamin® Potato Farms, Inc. have decided to hire qualified and competent hands to occupy the following positions;
- Chief Operating Officer
- General Farm Manager
- Potato Cultivation Manager/Supervisor
- Potato 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 across the various sections
- Ensure compliance during project execution
- Providing advice on the management of farming activities across all section
- 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 result are achieved, the most efficient resources (manpower, equipment, tools and chemicals et al) are utilized and different interests involved are satisfied.
- Oversee the smooth running of the daily farming activities across the various farming sections.
- 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
Potato Cultivation Manager/Supervisor
- Responsible for managing the potato cultivation section of the farm
- Supervises other workers within the department
- Work closely with the General Manager to achieve the organizations’ goals and objectives
Potato Processing and Packaging Manager/Supervisor
- Responsible for managing the potato processing and packaging section of the farm
- 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 potato cultivation
- Responsible for watering the potato crop
- Weeding or fertilizer and/or pest control application
- Handles farm implements and machines as instructed by the section manager / supervisor
- Assist in handling the harvest of potato
- 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 Garry Benjamin® Potato Farms, Inc.
- Distribute mails in Garry Benjamin® Potato Farms, Inc.
- Handles any other duties as assigned by the line manager
6. SWOT Analysis
Garry Benjamin® Potato 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 potato farm that will favorably compete in the United States of America.
We are quite aware that there are several potato farms all over Green Bay – Wisconsin and even in the same location where we intend locating ours, 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.
Garry Benjamin® Potato Farms, Inc. employed the services of an expert HR and Business Analyst with bias in the commercial 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 Garry Benjamin® Potato Farms, Inc.;
Our strength as a commercial potato farm is the fact that we have healthy relationships with loads of major players (agriculture merchants who deal in potatoes) in the commercial farms industry. We have some of the latest commercial farming machines, tools and potato processing equipment that will help us cultivate different species of potatoes 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 Green Bay – Wisconsin under our payroll.
Our weakness could be that we are a new commercial potato farm 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 will overcome this weakness with time and turn it to a major advantage for the business.
The opportunities that are available to us cannot be quantified, we know that there are loads of individuals who consume potatoes in different forms, animals that feed on potatoes and manufacturing industries that make use potatoes as raw materials both in the United States of America and other parts of the world.
We will ensure that we maximize the opportunities available to commercial potato farmers. As prices increase with increased demand, potato farmers will begin to experience revenue growth.
Some of the threats and challenges that we are likely going to face when we start our own commercial potato farm are global economic downturn that can impact negatively on household spending, bad weather cum natural disasters, unfavorable government policies and the arrival of a competitor that cultivates same crop as our farm within same location.
7. MARKET ANALYSIS
- Market Trends
One of the common trends in the commercial potato farming business is that most players in the industry are no longer concentrating only on non – organic potato farming. They now find it easier to run both organic and non – organic potato cultivation.
It is fact that despite that organic food is expensive, the sale for organic food is on the increase and it is indeed profitable.
Commercial potato farming has been in existence since time immemorial, but it does not in any way make the industry to be over saturated; commercial potato farmers are exploring new technology to continue to improve the cultivation process. Mechanized farming has indeed increased the amount food produced by farmers.
In November 2014, the USDA approved a genetically modified potato developed by J.R. Simplot Company, which contains genetic modifications that prevent bruising and produce less acrylamide when fried than conventional potatoes; the modifications do not cause new proteins to be made, but rather prevent proteins from being made via RNA interference.
Lastly, it is a common trend to find standard commercial potato farmers run a potato processing plant business alongside their farm. It is a means of maximizing profits in the business.
8. Our Target Market
The end consumers of potato and also those who benefit from the business value chain is all encompassing. Almost every household consumes potato.
In essence a commercial potato farmer should be able to sell his or her farm produce to as many people as possible including hotels, grocery stores, restaurants, livestock farmers and production companies that make use of potato as raw materials.
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. We will also target the following customers;
- Breweries (Potatoes are used to brew alcoholic beverages such as vodka, poitín, or akvavit.)
- Livestock feed production companies (potatoes are used as fodder for livestock)
- Adhesive production companies (Potato starch is used in the food industry as a thickener and binder for soups and sauces, in the textile industry as an adhesive, and for the manufacturing of papers and boards.)
- Pharmaceutical companies (Potato skins, along with honey, are used as a remedy for burns)
Our Competitive Advantage
Garry Benjamin® Potato Farms, Inc. is fully aware that there are competitions when it comes to selling commercial farm produce including potatoes, 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 and in other parts of the world.
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 potato farming processes that can help us sell our produce at competitive prices, good 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 potato farms that will also include potato processing plant.
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
Garry Benjamin® Potato Farms, Inc. is in the commercial 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 Garry Benjamin® Potato Farms, Inc.;
- Sale of potatoes (both organic and non – organic)
- Sale of processed potatoes in the form of chips (crisp).
10. Sales Forecast
We have perfected our sales and marketing strategies and we are quite optimistic that we will meet or even surpass our set target of generating enough income/profits from the year first of operation and build the business from survival to sustainability.
We have been able to examine the commercial potato farm market 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.
Below are the projections that we were able to come up with for the first three years of running Garry Benjamin® Potato Farms, Inc.;
- First Fiscal Year (FY1): $300,000
- Second Fiscal Year (FY2): $450,000
- Third Fiscal Year (FY3): $750,000
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, 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 commercial potato farms hardly make good profits is their inability to sell off their potatoes as at when due; potatoes spoil within a short time after harvest and if they are not sold or processed, they will get so soft that it won’t be good for direct consumption.
In view of that, we decided to set up a standard potato 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 to meet their targets and the overall goal of the organization.
We want to build a standard and world – class potato farm that will leverage on word of mouth advertisement from satisfied clients. In summary, Garry Benjamin® Potato Farms, Inc. will adopt the following strategies in marketing our commercial potato farm produce;
- Introduce our business by sending introductory letters alongside our brochure to grocery stores, potato merchants, livestock farmers, production companies that rely on supply of potato as raw materials et al.
- Advertise our business in agriculture and food related magazines and websites
- List our commercial potato farms on yellow pages ads
- Attend related agriculture and food 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. Below are the platforms you can leverage on to boost our commercial potato 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 Green Bay – Wisconsin
- List our commercial potato farms in local directories / yellow pages
- Advertise our commercial potato 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 potato 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 disaster in the location where you have your commercial potato farm, then it will directly affect the harvest of potato and also the prices of your farm produce.
Over and above, if you want to get the right pricing for your farm produce, then you should ensure that you choose a good location for your commercial farm, choose good breed that will guarantee bountiful harvest, cut the cost of running your farm to the barest minimum and of course try as much as possible to attract buyers to your farm as against taking your farm produce to the market to source for buyers; with this, you would have successfully eliminated the cost of transporting your harvest to the market.
We are quite aware that one of the easiest means of penetrating the market is to sell our produce at competitive prices hence we will do all we can to ensure that the prices of our potatoes are going to be what other commercial potato farmers would look towards beating.
One thing is certain, the nature of commercial farming makes it possible for farmers to place prices for their farm produces based on their discretion without following the benchmark in the industry. The truth is that it is one of the means of avoiding running into loss.
- Payment Options
The payment policy adopted by Garry Benjamin® Potato 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 Garry Benjamin® Potato 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 client make payment for purchasing our potatoes or processed potatoes without any stress on their part.
13. Startup Expenditure (Budget)
When it comes to calculating the cost of starting a commercial potato farm with potato processing plant, there are some key factors that should serve as a guide. Factor such as the capacity of potato processing plant you want to own and the size of the commercial potato farm.
In view of that, here are some of the basic areas we will spend our startup capital in setting up our commercial potato 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 – $30,000
- The amount required for purchase of the first set of potato seedlings et al – $20,000
- The amount required to set up a standard potato 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 four hundred and fifty thousand dollars ($450,000) to start a standard commercial potato farm with potato processing plant business in the United States of America.
Generating Funds/Startup Capital for Garry Benjamin® Potato Farms, Inc.
Garry Benjamin® Potato Farms, Inc. will be owned and managed by Garry Benjamin 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 Garry Benjamin® Potato 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 $350,000 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 business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.
One of our major goals of starting Garry Benjamin® Potato Farms, Inc. is to build a business that will survive off its own cash flow without 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. Garry Benjamin® Potato 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. 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 Green Bay – Wisconsin and preparing the farm land: Completed
- Conducting Feasibility Studies: Completed
- Start – up Capital Generation: Completed
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Design of The Company’s Logo: Completed
- Printing of Packaging and 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 (agriculture farm produce merchants, fertilizer suppliers and transporter / haulage companies et al): Completed