Ranch Business Plan Executive Summary Outline
Present Situation
Business description and ownership
Resources and financial statements summary
Performance: production and financial
Proposed Activity
Mission Statement, Objectives, and Goals
Management and Personnel
Family and hired personnel
Supporting accountant, lawyer, lenders, and consultant
Products/Services Produced and Marketed
Uniqueness of the business
Description of major input supplies
Market Analysis and Plan: Customers and Products’ Uniqueness
Market strategy
Cost competitiveness
Major competitors
Summary of Financial Projections
Historical Summary
Projected capital requirements
Long-term strategic plan
Implementation Plan
Outline of activities and schedule of initiation through completion
Business plans are only “valid” if they are written and updated as the implementation
progresses. Plans that are not written are normally not taken seriously because they are neither
commitment nor show the willingness to be held accountable for performance.
The development of the ranch business plan is one of the components of business
management activities as outlined below.
Business Management Activities
Planning
Decision making
Measuring results
Setting expectations for the business and employees
Accountability of all involved
Responsibilities taken
Self evaluation
Business evaluation
Time management
Management information system development and use
Motivating people to excel
Communications
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Prepared by Jim McGrann, Professor Emeritus, Texas A&M University, 8-10- 2008
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Written and timely
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Commitment
Accountability
Evaluation
Responding to underachievement
Business planning is a dynamic activity that defines the direction and expectations that
guide participants and their expectations toward the goals of ownership.
Ranch Business Plan and Where It Is Used?
The business plan development is not a one-time event, but a process that has a number
of uses. The plan may address an ongoing business to identify areas for change due to changing
goals or missions of the business. It may involve a change in business activity, which requires
investment analysis and a projection of its affect on the existing operation. A new ranch business
investment or transfer of ownership is most frequently, and rightfully so, a primary motivation to
develop a comprehensive business plan. Outlined below are the areas where a business plan is
frequently very cost effective.
1. Ongoing business evaluation and projection.
Current assessment
Projection under current operations
Basis for evaluation of current situation
2. Change in the business activity.
Investment analysis, or the consideration of the affect on the current
operation for the change
3. New ranch business.
Investment
Operations and management
Financing
4.
Add outside activities to generate income and investment diversification.
5.
Estate planning
Objectives and Goals
Objectives are general statements describing what the desire is to achieve over time.
Goals are specific statements that describe what has to be done to achieve the objectives. Doan’s
Agriculture Report describes objectives as having the following characteristics:
Directional: Moves you in the general direction of finding ways to complete
your mission
Reasonable: Intended accomplishments are practical and attainable
Inspiring:
Outcomes are positive and challenging
Visible:
Accomplishments are easy to imagine
Eventual:
Long-term outlook (ten or more years) in fulfilling mission
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Goals are what are important to achieve success. Doan’s defines the goal attributes as follows:
Specific:
States only one intention
Measurable: An observation can be made to indicate fulfillment
Attainable: Is realistic, yet challenging
Rewarding: Accomplishment must be valued to maintain persistence
Timeliness: Time constraints encourage the development of work strategies
Given the fact that ranching is both a way of life as well as an economic endeavor, clearly
stating objectives that are consistent and realistic are important in developing useful plans.
Defining realistic attainable goals are critical for a business plan to be implemented, as
well as the commitment and accountability that are achieved from participants.
A frequent objective of ranching is to operate in a way to minimize the necessity to
provide non-ranch equity to sustain the business and lifestyle, and to conserve or improve the
natural resources. A specific goal could be to increase weaned calf crop five percent while
cutting supplemental feed cost 20% in a production cycle.
As margins between revenue and cost narrow, the business management objective and
associated goals rise to greater importance. Realistically, the quality of lifestyle determines if
income shortcomings increase financial risk or owners’ work and stress to keep things together.
The vision of the future should not be limited by the past. Rangeland uses are changing.
Wildlife management, recreation, resource stewardship, and water quality are all issues that have
important economic and resource management roles.
When the business plan is being developed for family businesses or for a new ranch
investment endeavor, it is highly advisable to develop financial information before writing
objectives and specific goals. The entry and exit conditions need to be written. Realistic
measures of success reflect the earning capacity of assets invested in ranching and the long-term
nature of land appreciation. It also helps planners reflect on the multi-revenue use and lifestyle
objectives.
Set three or four clearly communicated goals with priorities. Realistic achievable goals motivate
execution – getting the job done. More on execution follows.
Execution
The business plan is only successful if it is executed. This is accomplished by insuring
the plan links the strategy to people and results. All the people that will be held accountable for
execution need to participate in the planning and goal setting activities. This promotes
participant’s “buy in”. Participation should reflect realism in goals and priority selection.
Accountability can then be identified with people and specific goals. Execution is promoted by
developing and using a measuring system to reward the doers.
Leaders in the business must place a premium on getting things done – execution - turns a
plan into accomplishments.
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