Creating an Agritourism Business Plan
Written by Dan Moore, AIANTA’s Agritourism Consultant
Previously, we highlighted key obstacles to overcome and pitfalls to avoid when building an agritourism program. In this article, we will go a bit deeper into the importance and practice of building out a business plan.
No matter how great the prospective market, available resources, or the people in your community, without a comprehensive and nimble business plan, the most effective and efficient path to creating a successful agritourism business can be hard to find. While most agritourism programs are diversifications of existing businesses, it is still necessary to create a separate plan for the agritourism venture. Building out a solid business plan upon inception will ensure that you start on the correct path and “cross bridges” early on while you still have the opportunity to turn back without too much loss. Potential hidden costs and other obstacles will also become more apparent when planning.
When writing your business plan, consider the following:
Always Start with the Story
Gather together everyone you plan to work with on building your business – your family, business partner(s), community. First, define who you are; what is your story? What is your core purpose, or mission? Who do you want to serve? Then determine what success looks like. What do you hope to accomplish by opening this business? Identify a clear understanding of your goals and how you expect to achieve them. Work to refine these down to one statement that you keep handy and refer to for both marketing and operations. This statement will help keep you on track, and serve as a guide to achieve your long-term goals & objectives.
Capture the Overview of Your Business and Business Needs
To create an overview of your business, first concisely describe your agritourism idea including the products and / or services you will be offering. Then, write a description of your operation with more specifics. What is the size and location of the operation(s)? What activities will take place on the land? What facilities will be used? Do you currently have enough acreage to carry out your vision, or will you need to acquire more land? Then match up your current and needed assets with your financial resources. Will you have the money needed to open your business right away or will you need to borrow money? You will also need to determine your time and labor needs. Building a new business takes a lot of work, and it likely will require learning new skills and multitasking. Finally, at this stage, it will be important to examine safety, legal and accessibility concerns. For example, are their dangerous areas to which you will need to restrict access? How do you plan to address sanitation needs (restrooms, hand-washing, etc.)? What are the local regulations in relation to the activities you plan to offer? Do you need special permits or licenses? Is what you want to offer legal? What insurance do you need to obtain? It is your responsibility to address these issues prior to opening up your property to visitors.
Goals and Objectives
Goals and objectives allow you to define your vision further. When considering this vision, think of goals as broad accomplishments you hope to achieve; and objectives as the measurable steps you need to take to achieve those goals.
Here’s a simple tribal agritourism example:
Goal: To develop an agritourism program that builds local interest in learning how to harvest traditional foods that will be incorporated in the menus of local restaurants.
Objective: By August have 10 youth sign up and participate in a foraging club that will gather traditional foods.
In the example above, the goal is a bigger picture outcome. It helps guide our program development. The objective on the other hand is measurable – 10 youth signed up by August harvesting traditional foods. The outcome of your objective should give you a clear idea of your successes. Keep in mind that your goals and objectives need to be attainable. Saying you will have your entire program up and running in six months is unlikely, while completing stage one in six months is doable. Setting goals and objectives will help you determine what those stages are.
Conduct a Market Analysis
You are not the first to start an agritourism business. It is important to learn about who else is out there, and what you can learn from their experience. What businesses are doing well and why? What trends in the industry are you responding to with your business and how will you differentiate? Researching other agritourism businesses in your area is important in getting to know your competition, and also to find potential partners. Note, your “competition” could actually be potential partners, as you both have a similar objective of attracting customers to your area. Competition is actually a good thing if you offer complimentary services. You can team up with other businesses to market to a larger customer base and create an attraction that inspires people to travel from further away and to stay longer.
Build out an Operation and Management Plan
After you determine what your business or program is, and you define what success looks like, it is now a good time to create a plan for how you will run, or operate, this business. In creating this plan, consider the following questions: What is the legal structure of the enterprise? Will you need additional insurance than what you currently have? Who do you plan to hire and for which positions will you hire them? What are the skills and responsibilities required for the personnel involved in the operation? How will you find and attract these people? It is important at this stage to consider how the business might scale. You may not need as many people to assist you when you first begin, but in the middle of a growth phase you will not want to go back and rewrite your operation plan.
Identify Your Marketing Strategy
Your marketing strategy is where you harness the story you outlined in step one, and determine how you are going to disseminate this story to prospective customers. The first step here is to determine who your desired customer will be. Will they be from nearby towns or cities, or will they be coming from out of state? Will they be traveling with families, or are you hoping to attract only adults? Once you know what kind of traveler you are seeking you can delve into determining this customer’s general needs and interests, and make sure what you are offering meets these needs and interests. Next, determine how you plan to reach this traveler. There are plenty of paths to take: online, print, travel agents (resellers), media. Not all channels are going to work for all demographics, and choosing incorrectly can be a costly mistake. One way to reduce this cost is to collaborate with other local businesses that offer a similar or complimentary experience. It can also be useful to be a part of marketing efforts carried out by DMO’s (Destination Marketing Organizations) or associations (Chambers of Commerce, trade groups). This strategy will provide the blueprint for a Marketing Plan, which you (and your marketing team) will create prior to getting your business off the ground. Here’s a helpful resource for creating your agritourism marketing plan: https://www.uvm.edu/~snrvtdc/agritourism/agchecklists/AgritourismMarketing.pdf . The U.S. Small Business Administration (SBA) also offers a helpful guide and sample template for when you are ready to create your marketing plan ( https://www.sba.gov/business-guide/manage/marketing-sales-plan-payment#section-header-0 ).
Develop Your Financial Strategy
Your financial strategy is basic to making management decisions and obtaining financing. In this section, you will identify sources of existing debt and financing needs. You will also develop financial statements including a profit-loss statement, a balance sheet and a cash flow projection that includes sales projections. It is important to understand what your costs will be, and have a projection for where your break-even point is. To get up and running there will likely be some upfront costs. How do you plan to finance the operation? If you do not have the cash on hand are there sources that you could seek funding from – loans, grants, assets? For example, USDA offers value-add grants as well as loans. If your program has community development aspects (job training, youth employment, sustainability, cultural perpetuation) consider researching foundations with programs in these areas. You could also reach out to your current financial institution to see what kind of assistance they could provide.
This section especially highlights the diverse knowledge required and might seem more foreign to those without a business background. While extremely important, the learning curve is quite attainable, compared to the much more difficult task of coming up with a great idea to base your business on. There are plenty of resources available to get you up to speed on these terms and concepts.
First Nations has an Indian Agriculture Curriculum that might be helpful. The first four Modules of the Participant Workbook provide a useful guide ( http://www.firstnations.org/knowledge-center/foods-health/biz-of-indian-ag ).
Create an Executive Summary
At the completion of all the components of your business plan, create a one page summary of your venture that includes the business description; mission statement; the market and it’s potential; an overview of your management team; and your financial analysis. This summary will be useful when seeking investors / funders, partners, employees, etc., who may be less likely to read your entire report.
A successful agritourism program has great potential to positively impact your community while also providing you with financial benefits. Few to none of these outcomes will be achieved if there is not a solid business plan to back up the program. Answering these questions early will save a lot of time and energy by avoiding foreseeable issues, and offering the time to develop a successful and valuable product.
This project was funded by the Food and Farm Communications Fund