Business plans are critical to the success of any new venture but especially so for a new aquaponics business. In essence, a business plans serve as the foundational framework for your company to be built on and provides benchmarks to measure your success or the lack of it. These benchmarks when set correctly at the beginning are key in achieving the success you planned for while helping you think through your business strategy and keep you on track. Remember over 90% of businesses fail through their first two years and the reason in large part is poor planning. I believe that entrepreneurs should dedicate significant time to create their own business plan and hold themselves accountable as they progress.
I think it is critical that you take some time to work with mentors, business partners, and industry experts on your plan. They can spot holes in your plan that you just can’t looking from the inside in. Getting expert knowledge from people that have done this before is way too critical a step to overlook, so don’t forget this step.
The size and scope of your business plan depend on your specific goals. If you’re writing it for potential investors, you should make the plan much more detailed than if you were writing it for yourself. Keep in mind that potential investors might not be as familiar with your industry so you have to clearly explain your concept and more importantly why would they want to invest in your company. If you’re just developing the plan for you and/or business partners, it doesn’t have to be as detailed, but you should still outline your goals and how you want to reach them.
I believe, there are 4 critical components that require much greater attention in a business plan; the other components become much more trivial to create once these 4 have become solid. Let’s get into these components and see why they are so critical and what should you be focusing on.
- Market Research
The Market Research should be further divided into Industry Analysis, Market Analysis and Competitor Analysis.
1.a. Industry Analysis
In this section you will have to conduct an in-depth research on the regional agriculture industry. Referring specifically to its size in revenue generated by year and the expected growth. Every region has different agricultural strengths, advantages and complexities; focus on the advantages that are available in your province specific to growing organic aquaponics produce. The specific relevant information to gather would be:
- Overall revenue and expected growth
- The climate, its challenges and advantages
- Area allotted to farming and current farming operations
- Different sectors and how they comprise the total market
- Mention any local, municipal or provincial programs promoting local food producers
- Compare your region’s agri-food industry to the other regions and the nation in general
1.b. Market Analysis
In this section you should focus on the specific market you will be competing in, the regional market where your business will be located. It is ideal to have statistical data on consumer behaviour related to food purchasing specific to your region. Also, in this section you would want to mention potential customers that you may have spoken to and their interest in purchasing your products. For example, speaking to local restaurants and chefs to find out their interest in local organic produce.
1.c. Competitor Analysis
In this section you will describe your competition, generally businesses or people engaged in aquaponics farming at a small or large scale, greenhouse growers that focus on producing crops all year round and to a lesser extent organic farming operations in your area.
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- Marketing Strategies and Sales
This section should focus on what strategies do you plan to implement to market your product. Here you will also research and describe your specific market segments that you will target when marketing your product. The focus should be on geographic, user and lifestyle demographic segmentation. Once the marketing strategy is clear a sales strategy should follow. A solid marketing and sales strategies sections should include the following components.
- Market Segmentation Strategy
- Targeting Strategy
- Positioning Strategy
- Product/Service Strategy
- Pricing Strategy
- Promotion and Advertising Strategy
- Sales Forecasts
This is possibly the most important section of the business plan. This is where your investor and you need to focus on to get your numbers in order. A well planned cash flow and income statement sheets are indispensable for financial planning. If you have no experience with this then consider getting an expert to assist you with this. You must get this section right before you can consider starting your business.
All the items calculated in the data sheets should be summarized into the tables below to give the reader an in-depth snapshot of the what can be expected from the operations of the business for at least a 3-year forecast.
- Executive Summary
The executive summary is a summary of the business plan and should be completed at the end when the body of the business plan is completed. Key pieces of information throughout the business plan will be gathered here and presented. Remember the executive summary is often the first and many times the only part of the business plan that is read, so it is critical that it is informative yet captivating enough to capture your audience. The reader should be able to understand the entire business plan after reading the Executive Summary
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