Do you want to start a tobacco farm and need to write a plan? If YES, here is a sample tobacco farming business plan template & FREE feasibility report.

Starting a tobacco farming business is one sure way of earning good money in the United States of America owing to the fact that people smoke tobacco all across the globe.

Tobacco farming is known to be a profitable business, it has evolved from the small scale backyard garden to a global industry in all countries where it’s carried out. Countries in the Caribbean, South America, North America, Europe, Asia, Australia and Africa are known to be in the forefront of cultivating tobacco.

A Sample Tobacco Farming Business Plan Template

1. Industry Overview

The cultivation of tobacco usually takes place annually. Tobacco is germinated in cold frames or hotbeds and then transplanted to the field until it matures. It is grown in warm climates with rich, well-drained soil. About 4.2 million hectares of tobacco were under cultivation worldwide in 2000, yielding over seven million tonnes of tobacco.

Farms in the Tobacco Growing industry basically grow tobacco leaf. Tobacco farmers purchase inputs, such as fertilizers, agricultural chemicals, pesticides, plant seeds, plant bulbs and curing fuel from farm supply and other wholesaling industries. The tobacco leaf is exported or sold to domestic tobacco product manufacturers.

The Tobacco Growing industry is indeed a fast growing industry and pretty much active in countries such as United States of America, Columbia, China, Ecuador, Tanzania, Kenya, Australia and India et al. Statistics has it that in the united states of America alone, there are about 2,990 registered and licensed tobacco farming companies responsible for employing about 4,744 people and the industry rakes in over $1 billion annually.

The industry was projected to enjoy -11.3 percent annual growth between 2014 and 2019. It is important to state that there is no company with a lion share of the available market in this industry in the United States of America. A recent report published by IBISWorld estimates that the Tobacco Growing industry revenue grew at an average annualized rate of 6.3 percent over the five years to 2010.

Revenue and employment crashed in 2005 after the US government removed its price supports.  The industry’s revenue plummeted 41.4 percent from the previous year.  After the initial drop, revenue increased as a result of price competition among operators.

Rising health concerns have led the government to impose stricter laws on tobacco product sales, which resulted in a decrease in domestic sales. However, as domestic sales decreased, foreign exports significantly increased. It is estimated that revenue will rise again in 2010, at a rate of 4.4 percent.

The strong international market and increasing sales from export destinations like Switzerland and China have increased demand for the product. The industry has suffered a decrease in employment by 6.6 percent in the last five years, as many participants have exited the industry.

However, the smaller number of farms has increased profits for those participants still involved in the industry. In 2005, the average farm profits totaled $4,274, and in 2010 they are estimated to be $30,590. Additionally, average wages have grown at an annual average rate of 8.2 percent since 2005.

One thing is certain when it comes to a business such as tobacco farming business, if you are able to conduct your market research and feasibility studies, you are more likely not going to struggle to sell you’re your farm produce because there is always a ready market for products from this industry.

2. Executive Summary

Benny Blanco® Tobacco Farms, LLC is a registered and licensed tobacco growing company that will based in Bowling Green, Kentucky – United States of America and we will sell our tobacco in and around the United States and also export to other countries because we know that our products will be in high demand.

Benny Blanco® Tobacco Farms, LLC is in the tobacco growing industry because we want to leverage on the vast opportunities available in the industry. We are well positioned to become one of the leading tobacco growers in the United States of America, which is why we have been able to source for the best hands and resources to run the business with.

We have put process and strategies in place that will help us employ international best practices when it comes to bringing out the best in our tobacco farming business.

Benny Blanco® Tobacco Farms, LLC is a private registered company that is owned by Benny Blanco and his immediate family business. The company will be managed and financed by the Benny Blanco and his immediate family members at least for a period of time before welcoming other investors.

3. Our Products and Services

Benny Blanco® Tobacco Farms, LLC will be involved in the growing different species of tobacco for the United States and the global market. We will ensure that we do all that is permitted by the law in the United States of America to maximize profits and achieve our business goals and objectives. We will cultivate and supply;

  • Flue-cured leaf tobacco
  • Fire-cured leaf tobacco
  • Cigar leaf
  • Air-cured light leaf tobacco
  • Air-cured dark leaf tobacco
  • Other tobacco products

4. Our Mission and Vision Statement

  • Our Vision is to become one of the top 10 tobacco growers not just in the United States of America but also on the global stage.
  • Our mission as a tobacco farm is to go into full – time commercial cultivation of different species of tobacco that will not only be patronized in the United States of America, but also exported to other parts of the world.

Our Business Structure

Benny Blanco® Tobacco Farms, LLC intends starting small in Bowling Green – Kentucky, but hopes to grow big in order to compete favorably with leading tobacco growing companies in the industry both in the United States and on a global stage.

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 Benny Blanco® Tobacco Farms, LLC, 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 the above, we have decided to hire qualified and competent hands to occupy the following positions;

  • Chief Operating Officer
  • General Farm Manager
  • Administrator/Accountant
  • Farm Workers/Field Workers
  • Sales and Marketing Executive

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
  • 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 on behalf of the organization
  • Supervises other section manager
  • Ensures compliance during project executions
  • Provides advice on the management of farming activities across all section
  • Responsible for carrying out risk assessment
  • Uses IT systems and software to keep track of people and progress of the growth of different species of tobacco
  • Represents 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.
  • Responsible for preparing financial reports, budgets, and financial statements for the organization
  • Responsible for overseeing the smooth running of HR and administrative tasks for the organization
  • Responsible for training, evaluation and assessment of employees
  • Oversees 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
  • Defines job positions for recruitment and managing interviewing process
  • Carries 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.
  • Accountable for developing and managing financial systems and policies
  • Responsible for administering payrolls
  • Ensures compliance with taxation legislation
  • Handles all financial transactions for the company
  • Serves as internal auditor for the company

Farm Workers/Field Workers

  • Responsible for carrying out core activities such as; Vegetative Growth, Cloning, Flowering, Harvesting, Curing, Producing Seeds, Pest Control etc
  • Handling common plant problems
  • Handles weeding or fertilizer and / or pest control application
  • Handles farm maintenance services
  • Assists in transport working tools and equipment from the office (store) to site and back to the office
  • Works closely with the General Farm Manager

Sales and Marketing Officer

  • 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
  • Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
  • Documents all customer contact and information
  • Represents the company in strategic meetings
  • Helps to increase sales and growth for the company

6. SWOT Analysis

Benny Blanco® Tobacco Farms, LLC 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 tobacco farming business that will favorably compete in the industry.

Here is a summary from the result of the SWOT analysis that was conducted on behalf of Benny Blanco® Tobacco Farms, LLC;

  • Strength:

Our strength as a tobacco farming company is the fact that we have healthy relationships with loads of major players in the industry; both suppliers and buyers within and outside of the United States.

We have some of the latest tobacco farming tools and equipment that will help us grow these plants 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 the whole of Bowling Green – Kentucky under our payroll.

  • Weakness:

Our weakness could be that we are a new tobacco farming business in the United States; it might take some time for our organization to break into the market and gain acceptance especially from well – established companies who are the leading purchaser of tobacco crops. Another weakness is that we may not have the required cash to promote our business the way we would want to.

  • Opportunities:

Spending conditions affect every type of product sold directly to consumers, including tobacco products. Industry revenue is expected to benefit from people who consume tobacco products being more comfortable with their financial situations and willing to spend money on industry products. In the coming year, consumer spending is expected to increase, representing a potential opportunity for the industry.

  • Threat:

When the percentage of smokers increases, demand for tobacco farming will also rise. Federal and state governments have taken measures to discourage the consumption of cigarettes and raise public awareness of the negative health effects of smoking. As a result, demand for tobacco as a raw material has fallen. The percentage of smokers is expected to decrease this year, posing a potential threat to the industry.

So also, economic downturn is a threat for our business. It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new tobacco farming company in same location where our target market exists and who may want to adopt same Business model like us.

7. MARKET ANALYSIS

  • Market Trends

If you are a follower of the trends in this industry, you will agree that the production of tobacco leaf increased by 40 percent between 1971, during which 4.2 million tons of leaf were produced, and 1997, during which 5.9 million tons of leaf were produced.

According to the Food and Agriculture organization of the UN, tobacco leaf production is expected to hit 7.1 million tons by 2010. This number is a bit lower than the record high production of 1992, during which 7.5 million tons of leaf were produced. The production growth was almost entirely due to increased productivity by developing nations, where production increased by 128 percent.

During that same time period, production in developed countries actually decreased. China’s increase in tobacco production was the single biggest factor in the increase in world production. China’s share of the world market increased from 17 percent in 1971 to 47 percent in 1997.

This growth can be partially explained by the existence of a high import tariff on foreign tobacco entering China. While this tariff has been reduced from 64 percent in 1999 to 10 percent in 2004, it still has led to local Chinese cigarettes being preferred over foreign cigarettes because of their lower cost.

Every year 6.7 million tons of tobacco are produced throughout the world. The top producers of tobacco are China (39.6 percent), India (8.3 percent), Brazil (7.0 percent) and the United States (4.6 percent).

It is on records that revenue generated by tobacco cultivators has maintained positive growth. This is so because in recent time, a growing number of individuals earned additional income, resulting in high demand. As a matter of fact, external factors such as demand from high – end cigar impact industry performance.

Another common trend in the tobacco farming business is that most players in the industry are no longer concentrating only on cultivating tobacco. They now find it easier to run their own tobacco processing and delivery business.

8. Our Target Market

As you would expect, the end users of tobacco and also those who benefit from the business value chain is all encompassing.

In view of that, we have created strategies that will enable us reach out to various individuals and businesses that would need our tobacco leaf and related plants. Below is a list of the people and businesses that we have specifically marketed our products to;

  • Production companies that make use of tobacco as raw materials
  • Those who smoke tobacco (cigars) et al

competitive advantage

It is easier to find entrepreneur flocking towards an industry that is known to generate consistent income and a business such as tobacco farming is not an exception. Benny Blanco® Tobacco Farms, LLC is fully aware that there are competitions when it comes to selling tobacco, which is why we decided to carry out thorough research so as to know how to take advantage of the available market.

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 farming processes that can help us sell our produce at competitive prices, good network and excellent relationship management.

Economies of scale, production of premium goods/services and ability to alter goods and services produced in favor of market conditions are part of what we will be bringing to the table. So also, our competitive advantage lies in the power of team and we have healthy relationships with loads of major players in the industry; both suppliers and buyers within and outside of the United States.

We have some of the latest farming tools and equipment that will help us grow these plants in commercial quantities with less stress. Aside from our relationship and equipment, we can confidently boast that we have some the most experienced hands in the tobacco farming business in the whole of Bowling Green – Kentucky under our payroll.

Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that in the nearest future, we will operate an all – round standard tobacco farming business that will also operate a standard production plant and delivery business. With this, we will be able to take advantage of all the available opportunities within 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 quite aware that the reason why some tobacco farming companies hardly make good profits is their inability to sell off their farm produce as at when due.

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 Benny Blanco® Tobacco Farms, LLC.

Our goal is to grow Benny Blanco® Tobacco Farms, LLC to become one of the leading tobacco farming 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 Bowling Green – Kentucky but also in other cities in the United States of America.

In summary, Benny Blanco® Tobacco Farms, LLC will adopt the following strategies in marketing our cut flower;

  • Introduce our tobacco farming company by sending introductory letters alongside our brochure to businesses that deal in tobacco and other key stake holders in the United States of America.
  • Advertise our business in relevant business 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
  • Leverage on the internet to promote our business
  • Engage direct marketing approach
  • Join local chambers of commerce and industries with the aim of marketing our products
  • Encourage word of mouth marketing from loyal and satisfied clients

Sources of Income

Benny Blanco® Tobacco Farms, LLC is in the tobacco 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.

We will generate income for the business by growing different species of tobacco such as;

  • Flue-cured leaf tobacco
  • Fire-cured leaf tobacco
  • Cigar leaf
  • Air-cured light leaf tobacco
  • Air-cured dark leaf tobacco
  • Other tobacco products

10. Sales Forecast

From the survey conducted, we were able to discover that the sales generated by an average tobacco farming business depends on the size of the farm, and other related plants that they are involved in.

We have perfected our 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 tobacco grower industry cum tobacco farming business and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the projections that we were able to come up with for the first three years of running Benny Blanco® Tobacco Farms, LLC;

  • First Fiscal Year (FY1): $240,000
  • Second Fiscal Year (FY2): $330,000
  • Third Fiscal Year (FY3): $450,000

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.

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 advertise and 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 tobacco farming 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
  • Distribute our fliers and handbills in target areas
  • List our tobacco farming farm in local directories / yellow pages
  • Advertise our tobacco farming business 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 harvested tobacco at the right price that will guarantee that you make profit is dependent on your strategy while some of the factors are beyond your control.

We are quite aware that one of the easiest means of penetrating the market and acquiring loads of customers is to sell to them at competitive prices hence we will do all we can to ensure that the prices of our farm produces are going to be what other tobacco farmers would look towards beating.

The nature of tobacco farming business makes it possible for farmers to place prices for their farm produce 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.

The fact that we are going to be offering our tobacco plants at cheaper prices does not in any way means that we will sell substandard products. Selling our products at a lower price than what is obtainable in our competitors farms means that we will only reduce our profit margin.

  • Payment Options

The payment policy adopted by Benny Blanco® Tobacco Farms, LLC 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 payments options that Benny Blanco® Tobacco Farms, LLC will make available to her clients;

  • Payment via bank transfer
  • Payment with cash
  • Payment via online bank transfer
  • Payment via mobile money
  • Payment via Point of Sales Machines (POS Machines)
  • Payment via check
  • Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of our tobacco without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

From all available statistics and facts available to us, we have been able to come up with an estimate of what we intend spending in the bid to establishing our tobacco farming business in Bowling Green – Kentucky. This is what it would cost us to setup Benny Blanco® Tobacco Farms, LLC in Bowling Green – Kentucky, U.S;

  • The total fee for incorporating the Business (tobacco farming business) in United States of America – $750.
  • The budget for key insurance policies, permits and business license – $2,500
  • The amount needed to hire business consultants – $2,000
  • The amount needed to acquire / lease a farm land – $50,000
  • The amount required for preparing the farm land (for the cultivation of tobacco seedlings and fencing et al) – $30,000
  • The cost for acquiring the required working tools and equipment / machines / flower pots et al – $200,000
  • The amount required for purchase of seedlings and mineral nutrients solutions – $20,000
  • 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 medium scale but standard tobacco farming business in the United States of America.

Generating Funds/Startup Capital for Benny Blanco® Tobacco Farms, LLC

No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality. Finance is a very important factor when it comes to starting a business. No doubt raising startup capital for a business might not come cheap, but it is a task that an entrepreneur must go through.

Benny Blanco® Tobacco Farms, LLC is owned by Benny Blanco Cephas and her immediate family members. They decided to restrict the sourcing of the startup 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 $100,000 (Personal savings $70,000 and soft loan from family members $30,000) 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

Part of the plans we have in place to sustain Benny Blanco® Tobacco Farms, LLC is to ensure that we continue to make available different sizes and species of tobacco, 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 and the products they want to see in our store.

We will not waste time in adopting new technology, best practices and diversifying our services. Benny Blanco® Tobacco Farms, LLC 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.

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 Bowling Green – Kentucky: 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
  • Graphic Designs and Printing of Packaging and Promotional Materials: Completed
  • Recruitment of employees: In Progress
  • Purchase of the needed farming 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 key players in the industry (tobacco merchants, transporter/haulage and suppliers of seeds, mineral nutrient solutions, pesticides and insecticides): Completed
Joy Nwokoro