In this article, we will look at an example of a business plan for a grant. In one of the previous articles: “Business Plan for a Grant: Sample”, a business plan for a production organization was taken as an example. Below is an example of a business plan for organizing a peasant farm.
Typical structure of a business plan for a grant
It is best to parse an example business plan based on its structure. The typical structure of a business plan for obtaining a grant includes the following sections:
- Information about the applicant — the subject of small and medium-sized businesses.
- Introductory part (summary of the project).
- Analysis of the state of affairs in the industry.
- Description of production (works, services).
- Marketing and sales of products (works, services).
- production logistics.
- Production plan.
- Organizational plan.
- Financial plan.
- Evaluation of project effectiveness and risks of its implementation
Below is an example of filling out a part of each section of the business plan: “Project for the organization of a dairy farm”. At the end of the article, this sample business plan is available for download.
Business Plan Section: Project Summary
One of the main parts of the «Project Summary» section is the part that reveals the purpose of the project and the results that will be achieved during the implementation of the project.
An example of disclosing the purpose and results of the project:
“As a result of the implementation of the project, a farm will be created that will allow supplying the population of Poikovo with fresh and natural locally produced dairy products.
The popularity of milk throughout the world led to the technologization of its production, which led to the industrial development of a considerable number of so-called modified dairy products. Few people realize that unpasteurized natural milk from cows grazing on pastures actually served as a medicine at the beginning of the last century. And this is absolutely fair. Fresh milk «straight from under the cow», which can be considered akin to «stem cells» in relation to food, has been used as a medicine, and often it served to treat some severe chronic diseases.
As a result of the project implementation, the production volume will be up to 2400 liters of milk per month. Residents of Poikovo and the Nefteyugansk region will have the opportunity to eat fresh and healthy locally produced food.”
Business Plan Section: Industry Analysis
In this section, you need to focus on the analysis of the market, consumers and competitors in general. One of the key points of market analysis is the segmentation of key consumer groups.
An example of highlighting the main consumer groups:
“The following main groups of farm customers can be distinguished:
- Shops, other places of retail trade in food products — several dozen retail outlets in the village;
- Places of public catering — about 10 objects;
- Individuals interested in buying healthy and wholesome food.
Thus, at least three main groups of consumers of milk and dairy products of the farm can be identified.
Business Plan Section: Product Description
This section of the business plan is devoted to the description of the product (services) resulting from the implementation of the project. The difficult moments of this section include a comparative analysis of the future product with the products of competitors.
An example of a comparative analysis of the main characteristics of similar and competing (replacing) types of products:
“For a long time, milk was considered not only a food product, but also the most valuable healing drink. Today, all nutritionists recommend drinking milk to relieve nervousness and irritability.
All these useful properties are characteristic of natural or fresh milk, which has just been milked from a cow. This milk is undoubtedly the most useful, but the milk that we buy in the store loses all its beneficial properties during the sterilization process. The nutritional value of store-bought milk is preserved, but it is already digested much worse and calcium from this milk is poorly absorbed. UHT milk is cleaned of all bacteria and spores, so it cannot become curdled at room temperature and simply rots. This milk should not be eaten as yogurt, it is better to throw it away … «
Business Plan Section: Marketing and Sales
The section of the business plan «Marketing and sales of products» is the most important part of it. In this section, it is necessary to provide specific information about sales volumes, main customers, competitors, as well as pricing characteristics.
An example of a pricing characteristic applied for calculation in a business plan:
“In accordance with the analysis of prices for competitors’ products, the price of milk in a store is from 30 to 40 dollars — a segment of low quality, from 40 to 50 dollars — a segment of medium quality, above 50 dollars — a segment of high quality. Farm products belong to the high quality segment. However, in order to create consumer demand for products in the first year, it is planned to set a price of no more than $40 per liter.
Business plan section: Production logistics
Production logistics is one of those sections of a business plan that may not be present in every business plan. Basically, this section is necessary to describe projects aimed at organizing production. The description of this section may include: analysis and description of the production process, the process of delivering raw materials to the production site, the process of storing raw materials.
An example of a description of the necessary storage capacity for the processing and storage of raw materials, finished products:
“Currently, we have a barn for keeping 4 cows. To expand the livestock, it is necessary to build two premises: a new stall for 8-10 cows, a shed for storing hay and mixed fodder.”
Business Plan Section: Organizational Plan
An organizational plan is necessary to disclose the sequence of steps to implement the goals of the business plan. It describes what needs to be done and when.
“Farming is supposed to be transferred to the payment of the single agricultural tax (ESKhN). The following activities will be implemented to organize the project:
- Receipt of financial support — until 12/31/2015;
- Negotiating with potential clients — until 12/31/2016;
- Repair of the stall and construction of the barn — until 29.02.2016;
- Acquisition of 4 cows — until 29.02.2016;
- Employment of a milkmaid — from to 29.02.2016;
- Purchase of a tractor — until 04/30/2016;
- Hiring a tractor driver — from to 05/31/2016;
- Harvesting of hay — from 07/01/2016 to 08/31/2016 «
Business plan section: Financial plan
The financial plan includes a forecast: income and expenses, cash flow, investment costs, calculation of the economic efficiency of the project.
For a business plan aimed at obtaining grant support, it is essential to disclose information about:
- how much money is planned to be received from the grant, how much is the applicant ready to invest in the project on their own?
- where will the money raised in the project go?
An example of a description of the total amount of investment costs and the shares of financing by individual investors:
“At the initial stage, a one-time investment of $400,000 is required. These investments are planned to be financed by 25% from the entrepreneur’s own funds, and 75% from grant support.”
Section of the business plan: Evaluation of the effectiveness of the project and the risks of its implementation
A description of the possible risks of the project is a standard section of the business plan for obtaining a grant. In the section, in addition to describing possible risks, it is also necessary to present solutions in the event of a risky situation.
“We can assume the following main risks associated with the implementation of this business project:
- Refusal of clients with whom preliminary agreements were reached in connection with the transition to alternative suppliers. Solution: search for new customers, as well as offering these customers more favorable conditions compared to alternative suppliers;
- Equipment breakdown. Solution: the equipment purchased within the framework of this project has a warranty period of at least 3 years. In the event of a breakdown, you can always…”
This provides examples (extracts of individual parts) of the description of all the main sections of the business plan. You can download the full text of the example of a business plan for obtaining a grant at this link: “Business plan for organizing a farm for milk production”.
In fact, there are many more nuances in preparing a business plan than are presented in this article. In order to achieve success, and learn from the mistakes of others, and not from your own, it is better to turn to professionals.