A tractor hire business involves renting out tractors and related machinery to farmers, construction companies, and landowners who need equipment for short-term use.
This business provides an affordable alternative to purchasing expensive machinery, making it an attractive option for small-scale farmers and businesses.
With the rising cost of agricultural machinery, many farmers prefer renting tractors to reduce financial strain.
In some regions, tractor-hire services have grown by over 10% annually due to increased mechanization in farming.
The market is expected to expand further, supported by government subsidies and technological advancements in rental fleet management
Steps on How to Write a Tractor Hire Business Plan
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Executive Summary
Jefferson Munroe® Tractor Hire Company, LLC is a Des Moines, Iowa-based business dedicated to providing reliable and affordable tractor rental services for farmers, construction companies, and landowners.
With Iowa being a leading agricultural state, the company aims to support both small and large-scale farming operations by offering high-quality, well-maintained tractors and related equipment.
By addressing the needs of local farmers who require flexible, cost-effective solutions, Jefferson Munroe® Tractor Hire Company, LLC seeks to establish itself as a trusted partner in the agricultural and land management industries.
With a strong focus on customer satisfaction, competitive pricing, and modern equipment, the company aims to become a leader in the tractor-hire industry in Iowa.
Through strategic partnerships with local agricultural organizations and businesses, Jefferson Munroe® Tractor Hire Company, LLC plans to expand its reach while contributing to the state’s thriving farming sector.
By leveraging strengths and opportunities while mitigating weaknesses and threats, Jefferson Munroe® Tractor Hire Company, LLC aims to establish itself as a leading provider of tractor rental services in Des Moines, Iowa, and beyond
Jefferson Munroe is the founder and CEO of Jefferson Munroe® Tractor Hire Company, LLC
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Company Profile
a. Our Products and Services
Jefferson Munroe® Tractor Hire Company, LLC will offer a diverse fleet of tractors, from compact models for small farms to heavy-duty machines for large-scale agricultural and construction projects.
Customers can choose between short-term and long-term rental plans, ensuring accessibility for different budgets and needs.
Additionally, Jefferson Munroe® Tractor Hire Company, LLC will provide maintenance and support services to guarantee efficiency and reliability for its clients.
b. Nature of the Business
Our tractor hire company will operate the B2C – Business to consumer, and B2B – business to business model.
c. The Industry
Jefferson Munroe® Tractor Hire Company, LLC will operate in the rental industry.
d. Mission Statement
At Jefferson Munroe® Tractor Hire Company, LLC, our mission is to provide reliable, high-quality, and cost-effective tractor rental solutions to farmers, construction businesses, and landowners in Des Moines, Iowa, and beyond.
We are committed to supporting agricultural growth and infrastructure development by offering well-maintained equipment, flexible rental options, and exceptional customer service.
e. Vision Statement
Our vision is to become the leading tractor-hire company in Iowa and a recognized name in the agricultural and construction industries.
We strive to set the standard for excellence by continuously expanding our fleet, embracing the latest technological advancements, and fostering strong relationships with our customers.
By prioritizing sustainability, affordability, and reliability, Jefferson Munroe® Tractor Hire Company, LLC aims to play a crucial role in driving agricultural success and economic growth in the region.
f. Our Tagline (Slogan)
Jefferson Munroe® Tractor Hire Company, LLC – “Powering Your Land, One Tractor at a Time!”
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
Jefferson Munroe® Tractor Hire Company, LLC will be formed as a Limited Liability Company, LLC.
h. Our Organizational Structure
- Chief Operating Officer (Owner)
- Admin and HR Manager
- Fleet Manager
- Tractors Maintenance and Detailers
- Accountant
- Customer Service Officer (Call Center Executives)
i. Ownership/Shareholder Structure and Board Members
- Jefferson Munroe (Owner and Chairman/Chief Executive Officer) 51 Percent Shares
- David Eglinton (Board Member) 19 Percent Shares
- Isaac Joshua (Board Member) 10 Percent Shares
- Richard Myles (Board Member) 10 Percent Shares
- James Abraham (Board Member and Sectary) 10 Percent Shares.
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SWOT Analysis
a. Strength
- Strategic Location in Des Moines, Iowa – Located in one of the most agriculturally productive states in the U.S., ensuring a steady demand for tractor hire services.
- Diverse Fleet of Tractors & Equipment – Offering a variety of modern tractors, from compact to heavy-duty, suitable for different farming operations.
- Affordable and Flexible Rental Plans – Providing hourly, daily, and seasonal rental options to cater to farmers, contractors, and agribusinesses.
- Experienced Management & Skilled Workforce – Led by professionals with expertise in agricultural machinery and customer service.
- Strong Customer Support & Maintenance Services – Regular maintenance and on-site repair services enhance reliability and minimize downtime.
b. Weakness
- High Initial Investment & Maintenance Costs – Purchasing and maintaining a fleet of tractors requires significant capital.
- Seasonal Demand Fluctuations – Business peaks during planting and harvesting seasons but may experience slow periods in winter.
- Limited Brand Recognition (Initially) – As a new company, establishing brand trust and a strong customer base will take time.
- Dependence on Local Market Growth – Economic downturns or reduced agricultural activity in Iowa can impact business.
- Potential High Loan & Interest Burden – If financed through loans, repayments may affect profitability in the early years.
c. Opportunities
- Growing Agricultural Sector in Iowa & Beyond – Increasing demand for mechanized farming solutions creates expansion potential.
- Partnerships with Farming Cooperatives & Agribusinesses – Collaborating with large-scale farmers can provide steady rental contracts.
- Technological Advancements in Tractors – Investing in GPS-enabled and fuel-efficient tractors can attract tech-savvy farmers.
- Expansion into Neighboring States – Opportunities to scale operations to other Midwest farming hubs.
- Additional Revenue Streams – Offering operator services, leasing farming attachments, and selling used equipment can boost income.
i. How Big is the Industry?
The tractor hire industry is a significant sector within the global agricultural and construction markets.
In the U.S., the farm equipment rental market was valued at over $46 billion in 2023 and is projected to grow due to increasing mechanization.
Rising demand for cost-effective farming solutions and flexible rental options makes tractor hire a lucrative industry, especially in agriculturally rich regions like the Midwest.
ii. Is the Industry Growing or Declining?
The tractor hire industry is growing due to rising demand for cost-effective farming solutions and increasing mechanization. Many farmers prefer renting tractors over purchasing them to reduce upfront costs.
According to market reports, the global farm equipment rental market is expected to expand steadily, driven by technological advancements and government support for agriculture.
Growth is particularly strong in regions with large-scale farming, making tractor hire a profitable and expanding sector.
iii. Future Trends in the Industry?
The tractor hire industry is evolving with several key trends shaping its future. One major trend is the increased adoption of technology. Tractors with GPS, automation, and precision farming technologies are gaining traction.
These advancements enhance productivity and efficiency, and rental companies are incorporating these high-tech machines into their fleets to meet the growing demand for smarter farming solutions.
Another trend is the shift towards sustainable farming practices. As sustainability becomes a priority in agriculture, tractor hire businesses are offering eco-friendly options, such as electric or hybrid-powered tractors.
These environmentally conscious machines cater to the need for reducing carbon footprints and meeting regulations in farming practices.
The rise of urban farming is also influencing the industry. As more people move to cities and engage in small-scale farming or gardening, compact and lightweight tractors are in demand.
Tractor rental companies are adjusting their inventory to accommodate urban farmers who require smaller equipment for limited spaces.
Lastly, flexible rental models are becoming more popular. Short-term and on-demand rental services are appealing to farmers who need equipment for specific tasks or seasons, providing them with greater flexibility and cost savings.
This trend reflects a shift towards a more customer-centric approach in the tractor hire industry.
iv. Are There Existing Niches in the Industry?
No, there are no niche ideas when it comes to the tractor hire line of business.
v. Can You Sell a Franchise of Your Business in the Future?
Jefferson Munroe® Tractor Hire Company, LLC plans to sell franchises soon and will target major cities with growing agricultural markets in the United States.
This strategic move will enable the company to expand its reach and cater to the increasing demand for farming equipment and services.
d. Threats
- Economic Instability & Rising Fuel Prices – Fluctuations in fuel costs and inflation may increase operational expenses.
- Competition from Established Equipment Rental Companies – Larger brands with an existing customer base could pose a challenge.
- Weather-Related Risks & Climate Change – Droughts, floods, or unpredictable weather can affect farming activities and demand for tractors.
- Regulatory & Environmental Policies – Stricter emissions regulations or agricultural policies may increase compliance costs.
- Risk of Equipment Theft or Damage – Losses from stolen or damaged tractors can impact profitability and insurance premiums.
i. Who are the Major Competitors?
- United Rentals
- Sunbelt Rentals
- Herc Rentals
- Ahern Rentals
- BigRentz
- Ritchie Bros.
- Rent1
- Rentalex
- Titan Machinery
- Cat Rental Store
- EquipmentShare
- Neff Rental
- Blanchard Machinery
- MacAllister Rentals
- Krentz Equipment
- Ideal Rent-All
- Midwest Equipment Sales
- Rental World
- Lawn & Garden Rental
- BlueLine Rental.
ii. Is There a Franchise for the Tractor Hire Business?
Yes, there are several companies offering truck rental franchises or dealership opportunities in the United States. Here are 10 notable options:
- Penske Truck Rental
- U-Haul
- Budget Truck Rental
- U-Save Car and Truck Rental
- Enterprise Truck Rental
- Ryder
- Merchants Fleet
- Express 4×4 Truck Rental
- Fluid Truck
- COOP by Ryder
Please note that some of these companies offer dealership or agent programs rather than traditional franchise models.
iii. Are There Policies, Regulations or Zoning Laws Affecting Tractor Hire Business?
Yes, various policies, regulations, and zoning laws affect the tractor hire business in the United States.
These regulations vary by state and local jurisdiction but typically focus on safety, environmental standards, and zoning requirements.
Tractor-hire companies must adhere to federal, state, and local safety standards set by agencies such as the Occupational Safety and Health Administration (OSHA) to ensure that equipment is safe for operation and that employees and customers are protected.
Environmental regulations also play a significant role, particularly in emissions standards and the disposal of hazardous materials.
Tractor hire companies may be required to ensure their equipment complies with environmental guidelines, especially if the tractors are used for heavy-duty agricultural or construction work.
Zoning laws impact where a tractor-hire business can operate. Some areas may require permits for operating rental businesses in certain zones, particularly if the business involves large equipment or operates on a commercial scale.
These laws also determine where the business can be located based on proximity to residential areas, environmental protection zones, or agricultural zones.
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Marketing Plan
a. Who is Your Target Audience?
i. Age Range: Primarily 25-60 years old, individuals in the working age group who are engaged in farming, agriculture, and related industries.
ii. Level of Education: Primarily high school graduates, technical school certifications, and some with college degrees, especially in agriculture, business, or related fields.
iii. Income Level: Middle to upper-middle income brackets, with a focus on business owners, farmers, and contractors who require tractor hire services to support their operations.
iv. Ethnicity: Our services cater to a diverse range of ethnicities, especially in rural and farming communities across the U.S.
v. Language: English-speaking primarily, with some areas where Spanish and other languages are commonly spoken.
vi. Geographical Location: Focused on major farming cities and towns across the U.S., particularly in states like Iowa, Texas, and California where farming is prominent.
vii. Lifestyle: Our customers are practical, work-oriented individuals with a strong focus on efficiency, productivity, and managing their agricultural or construction needs.
b. Advertising and Promotion Strategies
- Host Themed Events That Catch the Attention of Potential Clients.
- Tap Into Text Marketing.
- Use FOMO to Run Photo Promotions.
- Share Your Events in Local Groups and Pages.
- Turn Your Social Media Channels into a Resource
- Develop Your Business Directory Profiles
- Build Relationships with farmers, other rental companies and related organizations in our Area.
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH Marketing – Public Transit like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage on direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our clients.
- Create an efficient content marketing strategy.
- Create a community for our freelance marketers and influencers.
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on the relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
At Jefferson Munroe® Tractor Hire Company, LLC, our pricing strategy focuses on offering competitive, value-based rates tailored to different customer needs.
We aim to provide affordable options for both short-term and long-term rentals, with flexible pricing models based on usage duration, type of equipment, and delivery options.
Discounts and packages will be offered for repeat customers, bulk rentals, or seasonal demand.
Our goal is to balance profitability with customer satisfaction, ensuring our pricing remains attractive while sustaining the quality of service and equipment reliability expected by our target market.
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Sales and Distribution Plan
a. Sales Channels
At Jefferson Munroe® Tractor Hire Company, LLC, we will leverage a combination of online and offline sales channels to reach a diverse customer base.
Our primary sales channels will include an easy-to-navigate website offering online booking, detailed information on equipment, and customer support.
In addition, we will utilize social media platforms to engage with customers, showcase available tractors, and offer promotions.
Offline, we will establish relationships with local farming communities, businesses, and agricultural associations, using direct sales and referrals.
Partnerships with other rental companies and tours will also help expand our reach and increase visibility in key markets.
b. Inventory Strategy
At Jefferson Munroe® Tractor Hire Company, LLC, our inventory strategy focuses on maintaining a balanced and diverse fleet of well-maintained tractors to meet varying customer needs.
We will invest in a mix of tractor models for different purposes, from small utility tractors to larger, more powerful models.
Our fleet will be regularly inspected and serviced to ensure reliability and reduce downtime.
We will also monitor market trends to adjust our inventory based on seasonal demand and customer preferences.
c. Payment Options for Customers
Here are the payment options that Jefferson Munroe® Tractor Hire Company, LLC will make available to her customers:
- Credit Cards (Visa, MasterCard, American Express)
- Debit Cards
- Bank Transfers
- Online Payment Gateways (PayPal, Stripe)
- Mobile Payment Solutions (Apple Pay, Google Pay)
- Cash Payments
- Checks
- Financing Options (for long-term rentals)
- Payment Plans (for bulk rentals)
- Electronic Funds Transfer (EFT).
d. Return Policy, Incentives and Guarantees
Return Policy:
Cancellation and Refunds:
- Cancellations made within 24 hours of the booking will receive a full refund.
- Cancellations made after 24 hours will incur a 15% cancellation fee.
- No refunds for equipment already rented out or used.
Damaged Equipment:
- If equipment is returned damaged, customers will be charged for repairs or full replacement.
- If damage occurs while the tractor is in use, liability will be assessed on the customer’s usage.
Late Returns: A late fee will be charged for every day the equipment is not returned by the agreed time.
Incentives:
Long-Term Rental Discount: Customers renting tractors for more than 30 days will receive a 10% discount.
Referral Program: Clients who refer new customers will receive a 5% discount on their next rental.
Seasonal Promotions: Special offers during peak farming seasons (spring and harvest time) to incentivize early bookings.
Guarantees:
Quality Guarantee: All tractors and equipment are well-maintained and regularly serviced, ensuring they are in good working order for customer use.
On-Time Delivery Guarantee: We guarantee delivery of the equipment on the specified date and time or offer a 10% discount on the rental price.
Satisfaction Guarantee: If customers are not satisfied with the equipment, they can request a replacement unit within 48 hours.
e. Customer Support Strategy
Our customer support strategy will involve ensuring that clients can contact our company through multiple communication channels, such as email, phone, and social media.
We will also make sure that all contact information is displayed on the business’s website and promotional materials.
We will foster a culture of putting clients first, where staff are trained to listen actively and empathize with clients’ needs.
We will implement a CRM system to manage client data, track clients, and follow-up activities.
We strive to provide excellent customer service, ensuring a positive experience for every rider.
Our dedicated support team is available 24/7 to address any concerns or issues that may arise.
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Operational Plan
At Jefferson Munroe® Tractor Hire Company, LLC, our operational plan focuses on providing efficient and reliable tractor rental services.
We will maintain a fleet of well-maintained, high-quality tractors and equipment, ensuring they are regularly serviced and ready for use.
Our team will manage the rental process, including bookings, customer service, and logistics, to guarantee timely deliveries and pickups.
We will operate from a centralized location in Des Moines, Iowa, offering both short-term and long-term rentals.
a. What Happens During a Typical Day at a Tractor Hire Business?
A typical day at a tractor-hire business involves overseeing the rental process, ensuring equipment availability, and handling customer inquiries.
The day starts with checking the status of the fleet, ensuring all tractors are in good working condition and ready for rental.
Staff handle bookings, confirm rental agreements, and arrange for deliveries or pickups. The business may also deal with maintenance tasks, such as routine inspections, fueling, or repairs.
Customer interactions are key, as employees assist with equipment selection, answer questions, and ensure satisfaction.
Administrative duties, including managing inventory and finances, also take place throughout the day.
b. Production Process
There is no production process when it comes to a boat rental business.
c. Service Procedure
At Jefferson Munroe® Tractor Hire Company, LLC, our service procedure follows a structured process:
- Booking & Reservation: Customers can easily reserve tractors online, by phone, or in person, selecting the equipment that suits their needs and confirming rental dates.
- Equipment Preparation: Our team checks all tractors for operational readiness, performing necessary maintenance, cleaning, and fueling to ensure optimal performance.
- Delivery & Setup: We offer delivery and setup services, ensuring that the equipment is ready to use upon arrival.
- Customer Support: Throughout the rental period, customers can contact our support team for assistance or troubleshooting.
- Return & Inspection: Upon return, each tractor is thoroughly inspected for damages or maintenance needs, and customers are provided with a summary of the equipment’s condition.
- Invoicing & Feedback: After the rental, customers receive an invoice, and we encourage feedback to improve our services.
This structured service process ensures high customer satisfaction, operational efficiency, and well-maintained equipment.
d. The Supply Chain
At Jefferson Munroe® Tractor Hire Company, LLC, our supply chain ensures that we deliver high-quality and reliable tractors to our customers.
We source our equipment from reputable manufacturers and trusted suppliers known for durability and performance.
After procurement, the tractors are inspected, maintained, and stored at our facility, ready for rental.
Our delivery partners play a crucial role in providing timely transportation of equipment to customer sites. We also collaborate with local service providers for maintenance and repair needs.
e. Sources of Income
Jefferson Munroe® Tractor Hire Company, LLC makes money from renting out high-quality tractors and other farming equipment to customers in need.
We generate revenue through rental fees, long-term contracts, and maintenance services, providing reliable equipment solutions for agricultural and farming operations.
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Financial Plan
a. Amount Needed to Start Our Tractor Hire Company?
Jefferson Munroe® Tractor Hire Company, LLC would need an estimate of $1.2 million to successfully set up our tractor hire business in the United States of America.
Please note that this amount includes the salaries of all our staff for the first month of operation.
b. What are the costs involved?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $7,300.
- Marketing, Branding, and Promotions – $5,000.
- Business Consultant Fee – $2,500.
- Insurance – $5,400.
- Rent/Lease – $120,000.
- Operational Cost (salaries of employees, payments of bills et al) – $60,000
- start-up inventory – $5,000
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Tractors and Accessories – $700,00
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. Do You Need to Build a Facility? If YES, How Much Will It Cost?
Jefferson Munroe® Tractor Hire Company, LLC will not build a new facility for our tractor hire business; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our own facility.
d. Ongoing Expenses for Running a Tractor Hire Business
- Maintenance and Repairs – Regular servicing and repairs of tractors and other equipment to ensure they remain in optimal working condition.
- Fuel and Operational Costs – Expenses related to fueling the machinery, especially during high usage periods.
- Staff Salaries – Wages for employees such as drivers, mechanics, customer service personnel, and administrative staff.
- Insurance – Coverage for equipment, liability, and potential accidents that could occur during the hire period.
- Equipment Depreciation – The gradual loss in value of the machinery over time, which needs to be factored into pricing and replacement strategies.
- Marketing and Advertising – Costs for promotional campaigns, digital advertising, and participation in industry events to attract customers.
- Storage and Transportation – Expenses related to storing the tractors and transporting them to different locations for customer use.
- Rent or Lease – Since the business operates out of rented space, such as an office or depot, these monthly payments contribute to ongoing expenses.
e. Average Salary of Staff
- Chief Operating Officer (Owner) – $80,000 Per Year
- Admin and HR Manager – $60,000 Per Year
- Fleet Manager $68,000 Per Year
- Maintenance and Detailers -$60,000 Per Year.
- Accountant $58,000 Per Year
- Customer Service Officer (Call Center Executives) – $42,100 Per Year
f. How Do You Get Funding to Start a Tractor Hire Business?
- Raising money from personal savings and sale of personal stocks and properties
- Applying for a loan from your bank/banks
- Pitching our business idea and applying for business grants and seed funding from, the government, donor organizations, and angel investors
- Source for soft loans from our family members and our friends.
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Financial Projection
a. How Much Should You Charge for your Product/Service?
Type of Tractor
- Small Tractors (30-50 HP): Typically range from $100–$150 per day.
- Medium Tractors (50-100 HP): Generally charged between $150–$250 per day.
- Large Tractors (100+ HP): Could range from $250–$500 per day.
Additional Equipment
- Attachments (Plows, Tillers, etc.): Add $30–$100 per day, depending on the attachment.
- Towed Equipment (e.g., seeders, trailers): Maybe an additional $50–$200 per day.
Hourly Rates
- Small Tractor: $20–$40 per hour.
- Medium Tractor: $40–$75 per hour.
- Large Tractor: $75–$150 per hour.
Fuel Surcharge
- Depending on fuel prices, consider a surcharge of $20–$50 per day to cover fuel costs.
Delivery Fee
- Local Deliveries: $50–$150, depending on distance.
- Long-Distance Deliveries: $150–$500, based on location.
Insurance Coverage
- Optional Coverage: $10–$30 per day, depending on the type of tractor and equipment.
Discounts for Long-Term Rentals
- Weekly Rental: 10-20% discount off daily rates.
- Monthly Rental: 25-30% discount off daily rates.
b. Sales Forecast?
- First Fiscal Year (FY1): $460,000
- Second Fiscal Year (FY2): $780,000
- Third Fiscal Year (FY3): $1 million
c. Estimated Profit You Will Make a Year?
- First Fiscal Year (FY1): (10% of revenue generated)
- Second Fiscal Year (FY2): (20% of revenue generated)
- Third Fiscal Year (FY3): (25% of revenue generated)
d. Profit Margin of a Tractor Hire Business
The ideal profit margin we hope to make at Jefferson Munroe® Tractor Hire Company, LLC will be between 10 and 25 percent on service charges.
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Growth Plan
a. How do you intend to grow and expand? By opening more retail outlets/offices or selling a franchise?
Jefferson Munroe® Tractor Hire Company, LLC will grow our tractor hire business by targeting key agricultural regions, offering a diverse fleet of high-quality, well-maintained tractors, and implementing competitive pricing strategies.
We will also leverage our customer service excellence, build strong partnerships with local farms, and expand through franchising opportunities in major cities with growing agricultural markets.
b. Where do you intend to expand to and why?
Jefferson Munroe® Tractor Hire Company, LLC plans to expand to;
- California – Fresno
- Texas – Houston
- Iowa – Des Moines
- Nebraska – Lincoln
- Illinois – Chicago
- Kansas – Wichita
- Georgia – Atlanta
- Michigan – Grand Rapids
- Florida – Orlando
- Ohio – Columbus.
The reason we intend to expand to this geographic location is the fact that each of these states and cities offers unique advantages for farming, whether in crop production, livestock, or agribusiness.
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Exit Plan
The founder of Jefferson Munroe® Tractor Hire Company, LLC plans to exit the business via family succession.
We have positioned structures and processes in place that will help us achieve our plan of successfully transferring the business from one family member to another and from one generation to another without difficulties.
The company has successfully developed a detailed transition plan to smoothly hand over responsibilities to the new successor.