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Planning for new business opportunities

 
  From the August 20, 2018 issue of Agri-News
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 Planning for new business opportunities on the farm? Joel Bokenfohr, manager of business structures and financial policy with Alberta Agriculture and Forestry, explains what to ask when developing a business plan that will best allow a new enterprise to progress towards its goals, objectives, and future opportunities.

“Business planning is about making choices to determine a path for moving forward,” says Bokenfohr. “It includes considering how the business will position itself as technology, industry, markets, and consumers change more rapidly than ever before. Asking the following series of questions will help develop a business plan that balances the pursuit of likely outcomes and give the flexibility needed to realize future goals.”

Bokenfohr says that this plan is much more than a document. “It is a reflection of all the thought that goes into how a business will achieve its financial success and long term objectives.”

Answer these fundamental questions:

    • What do you want to do?
    • What capabilities do you bring to the business venture?
    • Where should you put your efforts?
    • What do you need to do to compete, survive and meet goals?
Systems Planning

“To allow for new opportunities,” says Bokenfohr, “Think about the systems involved in your business. This perspective can strengthen planning and decision making processes by investigating the interactions that shape the behaviour of the business environment.”

Consider these questions:

    • What are the key factors and interrelationships in the business environment that can impact your farm business outcomes?
    • What implicit assumptions are currently being made about how future events might unfold?
    • What are the possible paths that future events might follow and what are their effects on future outcomes for the farm business?
Strategic Planning

Bokenfohr says to think about ways to focus your strategy in your business plan. “Strategic planning and decision making is about allocating business resources in a way that can maximize your goals potential.”

Questions to consider:

    • What is the current strategy for achieving strategic fit that matches core capabilities of our farm with future opportunities?
    • What elements of the current strategy have worked well and what elements can be improved?
    • How might future events unfold and what effects will these changes have on strategic fit and competitive edge?
Entrepreneurial Planning

“Develop entrepreneurial thinking in your plan by considering alternatives for the farm business to provide value with available resources,” adds Bokenfohr. “Looking for opportunities can lead to new ideas, new offerings, new business ventures or new strategies. This perspective continuously scans the business environment to identify emerging opportunities to create value.”

Questions to consider:

    • What are the core capabilities (resources, knowledge, skills and processes) that are available to solve problems and create value for a new market segment?
    • What problems exist in the business environment that might be potential opportunities for creating value?
    • Are there opportunities where being good at managing risk allows for pursuing a strategy with greater risk?
Competitiveness

Bokenfohr says to keep in mind your farm’s future competitive advantage. “You can look at how that can help the business by offering products with lower costs or differentiated products that generate premium prices. Take soil quality, for example. Understanding customer needs, managing machinery costs to prevent excess, innovation, or developing specialized skills can reduce costs and add value. “

Questions to consider:

    • What are the unique physical resources as well as specialized knowledge, skills and processes that could be the source of competitive advantage for the farm business?
    • What opportunities are there to provide value to customers through products with lower costs or differentiated products that generate premium prices?
    • What changes may occur in the business environment to create opportunities for achieving competitive advantage?
Learning Organization

“Lastly,” adds Bokenfohr, “Think about ways to make your farm a learning organization. A learning organization pursues new experiences, integrates them with past experiences, and determines which new capabilities will contribute to improved business performance and competitive advantage.”

The following questions can assist individuals incorporate a learning perspective into thinking, planning, and decision making:

    • In assessing past performance what has worked well or not worked well and why?
    • How have past experiences including training, experimentation, and networking with peers contributed to new capabilities?
    • What are the opportunities to try new things where failure is affordable?
“It is important to initially think about these questions, work them into your business plan, and regularly evaluate it,” says Bokenfohr. “These questions can help prepare your farm business to take advantage of new or emerging opportunities and grow your business in the future.”

For more information, sample questions, and plans visit the business planning section of the Farm Manager webpage.

Contact:
Alberta Ag-Info Centre
310-FARM (3276)

 
 
 
 
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For more information about the content of this document, contact Joel Bokenfohr.
This document is maintained by Christine Chomiak.
This information published to the web on August 10, 2018.