|Heritage Dairy Breed Overview|
|What do I Make?|
|Concept, Mission & Goals|
|The Marketing Plan|
|The Financial Plan|
|Sample Business Plan|
This is section is often reviewed by the bank and the grant review committee before they even look at any other sections of the business plan. If this section makes sense and the numbers work, they will look at the rest of the business plan.
This section will also allow you to put hard numbers and costs associated with starting your business. It will allow you to see if you can afford this venture and if it will turn a profit. The three main components that should be included in the financial plan:
If you already noted in the Pre-Business Planning section that keeping books is not your strong point, this is where you talk about the person who is good with books and records that will be managing this aspect of the business.(Records being those things that you have to keep to have a dairy license.)
In this section, list:
List the records you have to keep with every regulatory agency:
Remember that “to do” list you did in section three of the business plan? This is where you put numbers to it. This is a very important step when applying for grants and to show loan officers how you plan to use the money. Attach bids, price sheets, and other documents as needed for equipment costs. If you are asking for a grant, make note of what you expect the grant to cover and what will be “in-kind” expenses (what you will pay for out of pocket).
Always budget 30% more for installation costs. Depending on what is being installed, the costs may be double your original estimate.
In this section you will want to explain where numbers come from in the projections and other spreadsheets or attachments.
Packaging, 8oz. retail: $0.49/ea. is then broken down into:
8oz deli cup $.10
Top Label $.15
Side Label $.12
Review the sample business plan template to see a couple of ways that you can do this in your business plan. If you received funding for any part of this, make note of it clearly at the top of the heading for grant reviewers and for banks. This allows you to show that you have support from other sources and that someone else believes in your project.
In a business plan you will generally see:
For some people, the batch projections and cash flow projections ARE the business plan. The rest is moot. It is always a good idea to get it all down in writing just to get it out in an organized way, but if these numbers do not make sense, then there is no point in continuing on with the enterprise beyond the writing of the business plan.
Do not “work the numbers” until they look right. Always look at the enterprise conservatively. If you hire a consultant, be particularly questioning if they have you making a lot of income by year 2-3. Generally, dairy processing businesses take 3-5 years, depending on debt, to make a profit. Service debt and payroll, but not real income until years 3-5.
Always consider paying yourself a “living wage” when doing your projections. Free labor may be a goal, but it is not sustainable in the long-term.