How to Form a Farmer's Cooperative Business Plan
A farmer's cooperative offers independent growers the opportunity to pool their resources and purchasing power to obtain better prices and access to equipment they might otherwise not be able to afford. According to Sustainable Table, a nonprofit organization to help consumers understand our food supply, the United States lost 8900 farms between 2005 and 2006. This decline in small-scale farming is partly due to the difficulty independent operators have surviving in a business climate tilted toward industrial production and monolithic economies of scale. Cooperatives give small-scale farmers an opportunity to compete with commercial farms on a more even playing field.
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Instructions
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Write an executive summary for your farmers' cooperative business plan. Describe the background and experience of the principal farmers who will be involved in the cooperative, including information about their individual farms and their skills and capabilities for setting up a cooperative. Provide details regarding the nature of the cooperative you are starting, including its objectives and the types of resources it will provide for members. Explain whether your farmer's cooperative will be made up comprised of founding members, or others may be invited to join. If the cooperative will be a growing concern, detail the criteria you will use for bringing in new members.
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Create a marketing plan for your farmer's cooperative business plan. If you will be pooling your products for distribution purposes, explain how you will brand yourselves in order to create an identity distinct from the larger-scale farms that distribute produce in your area. Include information about wholesale as well as retail marketing. Develop a strategy for presenting your offerings to the produce departments of local retail stores. Also describe support materials that you will provide to these stores so they can let customers know they are buying from a local farmer's cooperative.
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Provide clear, detailed financial information for your farmer's cooperative business plan. Create a balance sheet detailing the cooperative's assets and liabilities, as well as separate balance sheets with information about the financial status of the cooperative's core members. Compile an income statement showing the cooperative's projected earnings in sales and spend in operating expenses. Use this format to calculate how much product your farmer's cooperative will have to sell in order to cover its costs and earn a profit. Prepare a cash flow projection with month-by-month information about incoming and outgoing capital. Use the financial statement format in order to demonstrate how the cooperative will handle investments from its members and disburse income to stakeholders.
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Package your farmer's cooperative business plan with a cover sheet bearing the name of your organization, the names of the principal operators, and their contact information. Review the business plan, paying especially close attention to the financial section. Make sure your fundamental assumptions are carefully documented, and that your pooled assets provide sufficient collateral for a potential investor.
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References
- Photo Credit farm image by Richard McGuirk from Fotolia.com
