Many homesteaders imagine a way of life that pays for itself. Said another way, the way they want to live will be their source of income. I’m talking about a real, working homestead, not a hobby farm that’s simply a money pit or a nice little patch in the country to retire on during your golden years.
It’s a great idea, but I know too many people that go terribly off course here: making a living on your homestead means running an actual business, and that means you must put on your business hat. Scratching around in a small garden or having a handful of chickens and goats isn’t a plan, and if you think it is, you’re going to starve.
What you need is a real business plan for your homestead. Don’t be intimidated: making one is easier than you think, and it will serve as a guidepost for all your efforts. Keep reading, and I’ll walk you through putting one together in the next 10 minutes.
The 10-Step Plan Business Plan Model
Most business plans, especially those put together by folks who aren’t seasoned and savvy professionals in the business world, tend to fall short of what’s required.
These lackluster business plans are little more than a coarse idea of the life a person wants to live and their financial wishes. Basically, it’s a dream board like the kind you would put together when you were a teenager!
Any plan worth doing for any business worth embarking on will have 10 sections, all described in detail below. Go through these, in order, and you’ll be ready to get started. Most important of all: be honest with yourself and your prospects! You will have a lot of time, effort, and money tied up in your venture, so don’t cheat yourself.
Business Description
This is the most basic component of the whole business plan. Basically, it’s the overview of the business itself and what it’s about: who you are, what you do, why you do it, and the basic structure of the business.
Your vision for the business goes here: are you a homestead that rescues horses and other animals for outreach and educational programs? Do you raise livestock with strict standards for feed, care, and well-being?
Also be sure you include short descriptions of your primary and secondary revenue streams, e.g., poultry products, direct-to-consumer or direct-to-business sales, educational experiences, etc.
You’ll also want to mention the nuts and bolts of your business, the type of organization: are you an LLC, S Corp, sole proprietorship, cooperative, or something else?
Once you’ve ironed out this framework, move on to the next section.
Market Research and Analysis
This is, in my experience, the single most vital part of your business plan. Ever heard the old expression, build it and they will come? It’s a nice thought, but it’s complete horsecrap: a business has got to have customers and be able to acquire and retain those customers if it is going to survive!
Accordingly, you’ve got to research the market for the prospective products or services you’re going to offer. Who are your customers? Are they your local families? Are they businesses? Are they other homesteaders or farmers like you? People online across the country or even the world?
You must obtain and analyze a data set that supports your targeting, be that surveys, public or private statistics, sales data, or anything else. Include price points for similar products and services here, along with trends that might affect your business, and any seasonal or geographic factors as applicable.
Competitive Analysis
This is another terribly important section, and it is one that many folks don’t want to do. I know that if you’re anything like me, you don’t want to think of other homesteaders or businesses out there as competitors. We’re all supposed to be friends and neighbors, right?
Another nice thought, but one that’s not grounded in reality. As with any business, there is a certain amount of money out there to be had, and it is going to go to someone. You want to make sure it’s going to go to you, and you’ll set yourself up for failure if you go into a crowded market.
For instance, if you want to raise organic cruelty-free turkeys for meat, and there are a half dozen businesses doing the exact same thing within 20 miles of you, competition will be brutal, whatever the market forecast looks like.
Conversely, if there’s a significant demand for goat milk products in your area or region and very few providers are meeting it, you’ll have a big advantage.
Regardless of how many or how few competitors you have, make sure you include your unique advantages that set you apart, and include what advantages your competitors have over you.
Product / Service Description
This is a simple section, one you should be able to answer immediately and clearly. If you can’t, you really haven’t thought about homesteading as a business at all!
Your product and service descriptions, or descriptors, are exactly what they sound like. What you make or do and how you do it.
Here, list everything that you will provide or perform as part of your business. Get granular: using the previous example, you wouldn’t raise and sell turkeys, but instead would sell turkey breasts, drumsticks and whole turkeys, turkey eggs, and so forth.
Include relevant data like:
- seasonal availability,
- value-added propositions or products,
- specific certifications or standards that you meet,
- processing,
- packaging,
- labeling and delivery practices,
- and so on.
Risk Assessment and Mitigation
Positive thinking is a good thing if it doesn’t divorce you and your business from reality. Just like every other part of life, things go wrong in businesses, and you must have some idea of what you’re up against. That’s what this section is for.
Identify all factors that can impact or even derail your business and place them on a risk assessment matrix. Risk assessment is codified by likelihood times severity: how likely is it to occur and how bad will the impact be?
Sticking with our turkey farm example, you should list weather extremes which may affect your flock or damage buildings or other structures you depend on to raise them. Severe weather will be more or less likely depending on where you live.
A major one that all poultry farmers should be concerned with is disease: blackhead disease for turkeys is a common and devastating one. More nuanced risks can be things like market contraction, pricing shifts, and regulatory changes.
Think about everything that will impact your business, list it here, and list a short plan of how you will mitigate or deal with it.
Marketing
Marketing is that necessary evil in business. There have been so many great businesses and products that have failed because they were poorly marketed, and poor or mediocre ones that succeed because they were marketed extremely well.
You don’t have to go too crazy here, but you do need an accurate outline of how you’re going to build awareness of your business, solicit purchases, and keep in touch with established customers.
Social media channels are a must, including YouTube, as is an email list and Google business profile. Organic traffic is free and evergreen! But don’t neglect the power of in-person marketing at farmers’ markets, community meetups, holiday gatherings, and more.
A logo, even if very simple, is invaluable, so make one or have it made, but don’t waste too much time on it. SOmething cute and simple will do.
Sales Plan and Initiative
A profitable business is as easy as ABC; always be closing! This section contains the specific tactics and also the channels you will use to turn consumer interest into actual sales.
How you do that will vary depending on your specific business, but in any case you should have at least three sales channels and a projected ranking of which will be the most productive so that you can order your efforts for each of them.
For instance, paid ads online and in local publications might have the biggest return and be your primary sales channel. Direct outreach to consumers or businesses could be number two. Number three might be setting up a booth or stall at a farmers’ market, trade show, or similar venue.
The only way you’ll get data for this section is to do the work, so make sure you’re tracking all your figures and reordering your sales channels as time goes on. Always treat your business plan as a living document that is subject to change as you and your business change and grow!
Financial Forecast
Another boring but absolutely essential section for a thriving business. The financial forecast should be a detailed accounting of your startup and business management costs, funding sources, and a two- to five-year revenue and expense projection. Excel or Google Sheets are your best friends, here…
Cash flow, for most of us, will always be a factor in life, so you’ll want a solid month-by-month cash flow template with break-even points mapped. This is the only way you can set hard targets for your sales efforts and accurately manage your time when it comes to scaling your business to meet them.
I also like to include the overarching financial goal for my business in this section: what do I want to achieve in terms of overall profit or cash flow and on what timeline? Monthly, yearly, or a set date in the future? This will help you keep your eye on the ball.
Org Chart and Description
Here you’ll simply put who does what in your business. Anyone that has a stake, or any responsibility, in the business belongs here.
Obviously, you are foremost! Even if you’re responsible for everything, you’ll still want to list your responsibilities. Do the same for your spouse, any partner you might have, hired hands, and so forth.
This is necessary for true accountability, so don’t skip this however tempting it might be. It will also help you think of any essential tasks that you’ve forgotten or failed to delegate. It’s also a good idea to define who is the designated backup in case one person or another is sick, away, or incapable of performing for whatever reason.
Obviously, you’ll want to discuss this with the people involved to make sure everyone is on the same sheet of music!
Executive Summary
I know some of you business-savvy readers are probably scratching their heads to see the executive summary as the last section. Let me explain!
The executive summary is that 30,000-foot view of your business. It’s the elevator pitch, the big picture, the snapshot and motivation for why you are doing what you’re doing. Anywhere from three paragraphs to one page, it should explain the problem you are solving for the market, why you are solving it, what unique solution you are employing to do so, and what you’ll need to do it.
If you’re going to seek out a loan or an investor to help you out, this is the item that will get them to commit. Accordingly, you should have a short, sweet, and easily decipherable timeline for profitability and payback.
The executive summary is your mission statement, in a way, and your best advertisement for why anyone should do business with you or help you. Use everything you put in the preceding sections to complete it, but once it’s done, it should go at the very start of your business plan.
Tim is a farm boy with vast experience on homesteads, and with survival and prepping. He lives a self-reliant lifestyle along with his aging mother in a quiet and very conservative little town in Ohio. He teaches folks about security, prepping and self-sufficiency not just through his witty writing, but also in person.
Find out more about Tim and the rest of the crew here.