Do you want to start a soybean farm and need to write a business plan? If YES, here is a sample soybean farming business plan template & feasibility report.
Soybean has great economic value and they can be used for the production of soybean meal, soybean oil, soybean hull and even in the production of biofuel and animal feed. Starting a soybean 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 a soybean farm on a small or large scale depending on their financial status.
A Sample Soybean Farming Business Plan Template
1. Industry Overview
Farmers in the soybean farming industry primarily grow soybeans as their main crop. Soybeans are most often used in livestock feeds and vegetable oils, with a small but growing proportion being used in bio fuel production. Interestingly, businesses that are involved in the selling of soybean seeds to US farmers for growing crops are also part of this industry.
Statistics has it that in the united states of America alone, there are about 104,687 licensed and registered soybean farms responsible for employing about 108,712 employees and the industry rakes in a whooping sum of $40 billion annually with an annual growth rate projected at -2.1 percent between 2014 and 2019.
A recent report published by IBISWorld estimates that the industry revenue increased at an annual rate of 6.0 percent over the five years to 2011 to reach $29.8 billion.
The Soybean Farming industry has been immensely volatile throughout its history, and the past five years are no exception; during the period, revenue skyrocketed by nearly 30.0 percent in 2007 and is expected to dip by as much as 6.0 percent in 2011.
Industry performance is strongly influenced by forces such as weather patterns, exchange rates and demand for corn that are all outside farmers’ control and nearly impossible to anticipate.
A sizable amount of the revenue increase in the past five years can be attributed to the rising price of soybeans. Sluggish growth in agricultural outputs in the previous decade combined with larger populations and incomes in developing countries set the stage for a price spike.
The report further shows that the soybean farming industry is experiencing a period of strong profitability, as price increases have outpaced rising costs. Operating and input costs have steadily gone up each year over the five years to 2011, but at a considerably slower pace than the average annual growth in price.
As a result, soybean farmers are expected to turn a profit in each of the five years to 2011, which is a remarkable turnaround for an industry that faced four consecutive years of large losses from 1999 to 2002. However, margins in 2011 are likely to drop as costs of seeds, fertilizers, herbicides and other farm chemicals continue their steady ascent while prices and production drop because of lower demand.
Nevertheless, soybean planted area is expected to reach record highs in 2011 as farmers shift away from less profitable crops, particularly winter soybeans. With the recent advancement in technology, farmers can now comfortably grow crops such as soybean in a country where such crops can hardly survive.
One thing is certain when it comes to commercial soybean farming, if you are able to conduct your market research and feasibility studies before choosing a location for cultivating your soybean, you are likely not going to struggle to grow the soybean farming business and also to sell your soybean because there are always food processing companies and consumers out there who are ready to buy from you.
With commercial soybean farming it will pay you not to only cultivate soybean, you can as well start a soybean processing plant; producing and packaging soybean meal, soybean oil and soybean hull et al. The bottom line is that if you have enough land and you are interested in maximizing commercial soybean farming, you are sure going to make huge profits from the business.
2. Executive Summary
Fred Nathan® Soybean Farms, Inc. is a registered commercial farm that will be based in the outskirts of Overland Park, Kansas – 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 soybean farm.
Our commercial soybean farm is a going to be a standard farm hence will be involved in both commercial soybean cultivation and soybean processing and packaging.
We have put plans in place that will help us launch a standard soybean processing plant within the first three years of officially running Fred Nathan® Soybean Farms, Inc. We will process and package soybean meal, soybean oil and soybean hull et al and ensure that they flood the market.
This is why 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 soybean farm workforce that we want to build.
We have put process and strategies in place that will help us employ best practices when it comes to soybean farming processes and soybean meal, soybean oil and soybean hull processing and packaging as required by the regulating bodies in the United States of America.
Fred Nathan® Soybean Farms, Inc. is owned and financed by Mr. Fred Nathan and his immediate family members. Before starting Fred Nathan® Soybean Farms, Inc., Fred Nathan 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 Kansas.
3. Our Products and Services
Fred Nathan® Soybean Farms, Inc. is a world class commercial farm that is committed to cultivating both organic and non – organic soybean for both the United States’ market and the global market. We are in business to produce both food and raw materials for people and industries in commercial quantities.
We will also ensure that we operate a standard soybean processing plant as part of our complimentary business. These are the areas we will concentrate on in our soybean farms. If need arises, we will definitely cultivate related crops;
- Cultivating soybeans
- Operating standard soybean processing plant
4. Our Mission and Vision Statement
- Our vision is to become one of the leading commercial soybean farms and soybean processing brand not just in the United States of America but also on the global stage.
- Fred Nathan® Soybean Farms, Inc. is a world class soybean farm that is in business to cultivate soybean in commercial quantities for both the United States market and the international market.
- We want our well – packaged soybean meal, soybean oil, soybean hull and bio fuel et al to flood the United States and other countries of the world.
Our Business Structure
Fred Nathan® Soybean Farms, Inc. intends starting small in Overland Park – Kansas, but hopes to grow big in order to compete favorably with leading commercial soybean farms 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 Fred Nathan® Soybean 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 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 management of the farm. In view of the above, Fred Nathan® Soybean Farms, Inc. have decided to hire qualified and competent hands to occupy the following positions;
- Chief Operating Officer
- General Farm Manager
- Soybean Cultivation Manager/Supervisor
- Soybean Processing and Packaging Plant Manager
- Sales and Marketing Executive
- Field Employees
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 accountability; 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
- 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 growth of crops (soybeans)
- Responsible for overseeing the accounting, costing and sale of farm produce after harvest
- Represent the organization’s interest at various stakeholders’ meetings
- Ensures that farming goals desired result are achieved, the most efficient resources 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
Soybeans Cultivation Manager/Supervisor
- Responsible for managing the soybean cultivation section of the farm
- Supervises other workers within the department
- Work closely with the General Manager to achieve the organizations’ goals and objectives
Soybeans Processing and Packaging Manager/Supervisor
- Responsible for managing the soybean processing and packaging section
- Supervises other workers within the department
- Ensures that quality soybean meal, soybean oil, soybean hull and bio fuel et al are produced from the processing plant
- Serve as a quality control/assurance manager
- 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
- Responsible for handling business research, marker surveys and feasibility studies for the organization
- 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 lands for soybean cultivation
- Responsible for watering the crop
- Weeding or fertilizer and / or pest control application
- Assist in handling the harvest of soybean
- 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
6. SWOT Analysis
Fred Nathan® Soybean 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 soybean farm that will favorably compete with leading commercial soybean farms in the United States of America.
We are quite aware that there are several soybean farms all over Overland Park – Kansas, 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.
Fred Nathan® Soybean 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 Fred Nathan® Soybean Farms, Inc.;
Our strength as a soybean farm is the fact that we have healthy relationships with loads of major players in the commercial farms industry. We have some of the latest commercial farming machines, tools and soybean processing equipment that will help us cultivate soybean 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 Overland Park – Kansas in our payroll.
Our weakness could be that we are a new soybean 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, we will overcome this weakness with time and turn it to a major advantage for the business.
Organic chemical manufacturers produce biodiesel from soybean oil and other vegetable oils. Increases in demand for soybean oil result in higher demand from oilseed processors and, ultimately, higher prices. Demand from organic chemical manufacturing is expected to increase in the coming year, presenting a potential opportunity for the industry.
Soybean farmers derive a portion of their income from government assistance programs, including subsidies. Any changes in farm policy have a major effect on the returns to soybean growers. Subsidies for soybean farming are expected to decrease in the coming year, posing a potential threat to the industry.
7. MARKET ANALYSIS
- Market Trends
One of the common trends in the Soybean Farming industry is that most players in the industry are no longer concentrating only on non – organic soybean farming. They now find it easier to run both organic and non – organic cultivation.
It is fact that despite that organic food are expensive, the sale for organic food is on the increase and it is indeed profitable.
Soybean farmers are exploring new technology to continue to improve the cultivation, preservation and processing processes; mechanized farming has indeed increased the tons of food produced by farmers. The fact that there is always a ready market for soybean, soybean meal, soybean oil, soybean hull and biofuel et al makes the business highly profitable.
8. Our Target Market
The end consumer of soybean in any form and also those who benefits from the business value chain are all encompassing.
Almost every household consumes soybean in different forms. In essence a soybean farmer should be able to sell his or her farm produce to as many people as possible including production companies that make use of soybean 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 which is why we will be exporting some of our soybean, soybean seeds and soybean meal, soybean oil, soybean hull and biofuel et al.
Our Competitive Advantage
Fred Nathan® Soybean Farms, Inc. is aware that there are competitions when it comes to selling soybean and its byproducts, 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 soybean 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 standard commercial soybean farm that will also include a soybean 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
Fred Nathan® Soybean 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.
In essence we are not going to rely only on the sale of our farm produce to generate income for the business. Below are the sources we intend exploring to generate income for Fred Nathan® Soybean Farms, Inc.;
- Cultivating soybeans
- Operating a standard soybean processing plant
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 farm depends on the size and nature of the farm.
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 first year of operation and build the business from survival to sustainability.
We have been able to examine the agriculture industry cum soybean farm line business, 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 in respect to the nature of soybean farm that we run.
We will be running a standard soybeans processing plant with a capacity to export well – branded soybean, soybean seeds and soybean meal, soybean oil, soybean hull and bio fuel et al to other countries of the world. Below are the projections that we were able to come up with for the first three years of running Fred Nathan® Soybean Farms, Inc.;
- First Fiscal Year (FY1): $380,000
- Second Fiscal Year (FY2): $600,000
- Third Fiscal Year (FY3): $1.150 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 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 soybean farms hardly make good profits is their inability to sell off their produce as at when due. In view of that, we decided to set up a standard soybean 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. We want to build a standard and world – class soybean farm that will leverage on word of mouth advertisement from satisfied clients.
In summary, Fred Nathan® Soybean Farms, Inc. will adopt the following strategies in marketing our soybean farm produce;
- Introduce our business by sending introductory letters alongside our brochure to stakeholders in the agriculture industry and production companies that rely on supply of soybean.
- Advertise our business in agriculture and food related magazines and websites
- List our soybean 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. We intend growing our business which is why we have perfected plans to build our brand via every available means.
Below are the platforms we can leverage on to boost our soybean 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 on strategic locations all around Overland Park – Kansas
- Distribute our fliers and handbills in target areas
- List our soybean farms in local directories / yellow pages
- Advertise our soybean 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 soybean 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 soybean farm, then it will directly affect your harvest and also the prices of your farm produce.
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 soybean, soybean seeds and soybean meal, soybean oil, soybean hull and bio fuel et al 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 soybean farming business.
- Payment Options
The payment policy adopted by Fred Nathan® Soybean 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 Fred Nathan® Soybean 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 soybean, soybean seeds and soybean meal, soybean oil, soybean hull et al purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
When it comes to calculating the cost of starting a soybean farm with soybean processing plant, there are some key factors that should serve as a guide. Factor such as the capacity of soybean processing plant you want to own and the size of the soybean farm.
In view of that, here are some of the basic areas we will spend our startup capital in setting up our soybean 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 soybean seedlings et al – $50,000
- The amount required to set up a standard soybean 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 – $60,000
- 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 soybean farm with soybean processing plant in the United States of America.
These are some of the equipment that we would need to fully launch our soybean farm,
- Soil cultivator
- Harrow (e.g. Spike harrow, Drag harrow, Disk harrow)
- Stone/Rock/Debris removal implement (e.g. Destoner, Rock windrower/rock rake, Stone picker/picker)
- Broadcast seeder (alternatively: broadcast spreader, fertilizer spreader, or Air seeder)
- Plastic mulch layer
- Sprinkler system irrigation
Basically, the nature of soybean farms does not require an office space, most people that run commercial farms operate directly from their farms. But we have decided to open a small liaison office; a place where administrative jobs will be carried out on behalf of the business.
Generating Funds/Startup Capital for Fred Nathan® Soybean Farms, Inc.
Fred Nathan® Soybean Farms, Inc. is owned and managed by Fred Nathan and his immediate family members. They are the sole financiers 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 Fred Nathan® Soybean 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
Part of the plans we have in place to sustain Fred Nathan® Soybean Farms, Inc. is to ensure that we continue to make available soybean, soybean seeds and soybean meal, soybean oil, soybean hull et al, deliver quality services, 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 component 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. Fred Nathan® Soybean 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 company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner. 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.
- 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 Insurance for the Business: Completed
- Leasing of farm land in Overland Park – Kansas 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 soybean processing plant: 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: Completed