I’m sure you’ve heard these adages before, “If you fail to plan, you plan to fail,” and “If you aim for nothing, you will hit it every time.”
Several of our recent Growing Farmers workshops have been about planning, creating a business plan, a risk management plan, and a crop production plan, to name a few. The practical action oriented side of me says, just let me at the dirt and let me get to planting but I know these other elements are essential and time well spent.
One of the first planning items that we worked on was developing a business plan. It seems that this is key especially when it comes to applying for loans or just gauging from year to year how you are doing on reaching your goals. Were you a success or do you need to re-focus and re-strategize?
This session was led by a group of students from the business college at the local university. I was a little skeptical at first. How could a bunch of college kids with no practical life experience teach me anything? I’ve worked for several companies over the years, some well-managed, some not so much. I learned fairly quickly.
The speakers’ experience involved working with his family in a mid-sized town in Nebraska to establish and operate a Chinese restaurant. That’s pretty real life. So he knew first-hand what it was like to be an entrepreneur. This presentation was really helpful in that it provided a template to use to develop a business plan. I work really well with guidelines like this. I’m still working on and tweaking mine on a constant basis.
The last section to be completed is the Executive Summary and I haven’t gotten there yet. The section I struggle with the most is the Financial Analysis. My experience with home improvement projects is to add 20% or more to the cost of your materials list so to ask me to make a list of start-up costs is like nailing silly putty to a wall. I have a ball park idea but I know there will be unforeseen things that come up. And to ask me to state financial goals is difficult too. I would like to thrive but sometimes I wonder if “survive” isn’t a better first year goal. I really don’t know what to expect. What if climate change hits with full force and we have a drought akin to the one Texas experienced last year? How do you figure risk in with finances? So I struggle on and keep jotting down ideas on this one. I can understand why most people choose to work for someone else. It really takes the burden off your shoulders when someone else is responsible for making the business a success even though you can contribute to it in a small way.
Another planning topic we covered was “risk management,” which is an attorney’s way of saying, business creation or choosing the structure of your business. I chose to go with a “limited liability corporation,” or LLC, which seems to me to be the best way to keep personal and business assets separate. It also seems to have the best structure for keeping taxation simple.
So far I’ve filed my application for reserving a business name and received that back. That piece of paper gives me 120 days to complete the next filing. So, today I completed the Certificate of Organization which is the document that is filed in the state of Nebraska with the Secretary of State to create the LLC. That goes out in the mail today. I just used the example that the attorney who lead this session provided in his handouts. There wasn’t a template on the Secretary of State’s website, just some vague guidelines which I’m sure would require an attorney to interpret. Next I need to get an EIN — an employee identification number. Just knocking things off the check list.
So at this point I feel that on the one hand I’m making progress but also that I’m a work in progress. There are a lot of unknown variables, but I still need to plan what I can and I can always make little adjustments down the road based on new experiences and information.