Farm Business Planning

Why write a plan?

A plan forces you to answer questions that are easy to avoid, such as how much money you need, how many hours you can work and whether customers exist for what you want to grow. Writing makes gaps in your thinking visible while they are still cheap to fix.

A lender, a grant program or a landowner may ask for a plan. Even if no one does, the plan keeps you and your family working toward the same goals.

A plan is not a promise. You will change it as you learn, and that is the point of having one.

• Ask: what would make me stop?
• Ask: what would make me grow?

What goes into a plan?

Most plans include a description of the farm and its goals, products, customers and markets, production methods, people and labor, risks, and a budget. Cornell's small farms program and other extension programs offer worksheets that walk you through these parts.

Start with a page for each. Short and clear beats long and vague, and you can add detail as you learn more.

Describe your land, water, buildings, equipment and skills in the plan as well. They are real assets, and they limit what you can do, so being honest about them improves your decisions.

• Why are you farming and what does success look like?
• What will you sell, to whom and where?
• What will it cost and when does money come in?

How do you set goals?

Write goals in three groups: personal, such as time with family; financial, such as the income you need; and farm, such as acres, animals or products. Be honest about which matter most.

A useful goal can be checked. Instead of make a profit, write what the farm should earn after costs and unpaid labor by a certain season.

Share your goals with family members and ask what they want. Farms run on shared effort, and a plan that ignores someone's needs is likely to fail.

How do you estimate the money?

List what you must spend to start and run each enterprise, and estimate what you will sell at what price. Use real prices from your area and your own records where you have them, not numbers from a magazine.

Be cautious with optimistic estimates. Build a lower income version and see whether the farm still works, then decide what you would change if the plan fell short.

Consider a cash flow estimate by month. A farm can be profitable over the year and still run out of cash in spring, before sales begin, and you need to see that coming.

• List when each cost occurs.
• List when each sale is likely to be paid.

What risks should the plan name?

Weather, price swings, animal or crop disease, equipment failure, injury, loss of key people and changes in rules can each upset a plan. Naming them helps you prepare, which may mean insurance, savings, a backup crop or a second income.

Your local FSA office, your insurance agent and your extension office can explain risk tools that exist in your area. Check with them rather than assuming a program fits.

Insurance and savings are part of the plan too. Ask your agent and your local FSA office about options that fit your size and products, and set a modest reserve of money for a bad month.

How do you use the plan afterward?

Put it where you will see it and read it at least once a year. Compare what happened with what you expected, and update the plan with what you learned.

Share it with your family and your key advisors. A plan that sits in a drawer cannot guide decisions.

Write down the next three actions at the end of each review, with a name and a date beside each, so the plan turns into work.

• Mark a date each year to review it.
• Note what surprised you.
• Ask an advisor to read a draft.

Where can you get help?

Extension offices, small business development centers, SBA resources, farm business advisors and beginning farmer programs often provide planning help at low or no cost. Ask what is offered near you.

Be careful about paying for plans or software without checking what you get. A modest tool or a free worksheet may be all you need.

If you are applying for a loan or program, ask the lender or office what they require before you start writing so that you do not repeat work.

Last reviewed: November 12, 2026. Written by the Rural Farm Life Editorial Team. See our editorial policy.