Agriculture fruit farm business plan for starting your own farm

Do you want to start a fruit farming business? Well, the business mainly sells young fruit plants and seeds, and sometimes mature fruit packs to the customers. The business has never-ending demand as fruit and vegetables are consumed by people of all incomes throughout the year. Besides, the demand for fruit is also high in the industrial sector.

Keeping in view the scope and opportunities in this business, it will truly be a wise decision to enter this venture. However, to make sure that all the aspects of this business are properly structured, there will be a need for writing a strategic business plan. In this blog, we will be providing all details about how to make an agricultural business plan so that you can have help. The details provided in this business plan for agriculture fruit farm are of a successful startup, Fruit Land.

Executive Summary

2.1 The Business

Fruit Land will be a registered and licensed fruit farm business based in New York. The business will aim at providing young plants, fruits, and vegetables for domestic as well as commercial purposes.

2.2 Management of Agriculture Fruit Farm

Fruit Land will be managed by its owner and a co-manager. With combined efforts, they will hire further human resources to help them run their business.

If you are looking for how to start agriculture business you must not ignore the importance of management. Management is an extremely important component of a nursery plant business plan. In your nursery business plan you should define the employee hierarchy clarifying the individual roles of every worker of your company. So that your employees know where they have to report.

Besides, it will also help you in establishing a supervised system because plant-related business yields result only in the presence of a disciplined and punctual approach.

2.3 Customers of Agriculture Fruit Farm

In your starting a farm business plan it is essential to identify your customers at an earlier stage. In this blog on how to start a fruit farm business we’re listing the groups of customers identified by Fruit Land.

  • Domestic Buyers
  • Restaurants
  • Fruit Processing Industries

2.4 Business Target

Our major targets are:

  • To decrease our expenses and costs of operations by 20% every three years by enhancing business efficiency, productivity, technological support, and innovation.
  • To earn a net profit margin of $29.6k per month by the end of the third year.

Agriculture Fruit Farm - 3 Years Profit Forecast

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Company Summary

3.1 Company Owner

Fruit Land will be owned by Sean Redford. Sean is a graduate in horticulture sciences with a master’s in business administration. For the past four years, he had been working in a hydroponics company.

3.2 Why the agriculture fruit farm is being started

Sean has extraordinary management skills. He is a man who can make others work with motivation, responsibility, and in a disciplined manner. He decided to start a fruit farm business due to the immense opportunities this field has to provide.

3.3 How the agriculture fruit farm will be started

Step1: Plan Your Business

The first step is to develop start a farm business plan. This step will enable you to formulate your business strategies. That will help you in prioritizing the workforce and expenses of some specific tasks.

Note

In this example of a farming business plan, we will be providing all the details of Fruit Land to help you in identifying the major aspects of this business. This agriculture fruit farm business plan pdf will also help you if you are looking for aquaponic farming business plan or pepper farm business plan. As the workplace and workspace requirements will remain the same. Only market trends and groups of target customers will change.

Step3: Define The Brand

After that, you will have to start procuring the inventory and tools to run your business while also initiating the recruitment phase. This is the time when you define your services, values, and competitive aspects to get recognized in the market.

Step3: Establish Web Presence

To get known to a wider audience you will have to establish a strong website and social media presence.

Step4: Promote And Market

You will have to start advertising your services and products so that your target customers can be attracted to you.

Step5: Estimate Startup Costs

After planning about your business operations, the next step is to estimate your startup costs. It is to estimate the additional money you require to start your business. In case you are low on investment, you’ll have to explore how to write a business plan for bank loan.

To give you an idea of the costs involved in starting this business, we’re attaching the startup costs of Fruit Land in this farm business plan sample.

Agriculture Fruit Farm - Startup Cost

Start-up Expenses  
Legal $245,000
Consultants $0
Insurance $27,000
Rent $40,000
Research and Development $21,000
Expensed Equipment $46,000
Signs $4,200
TOTAL START-UP EXPENSES $383,200
Start-up Assets $366,000
Cash Required $380,000
Start-up Inventory $50,000
Other Current Assets $270,000
Long-term Assets $290,000
TOTAL ASSETS $1,356,000
Total Requirements $1,739,200
START-UP FUNDING
Start-up Expenses to Fund $383,200
Start-up Assets to Fund $1,356,000
TOTAL FUNDING REQUIRED $1,739,200
Assets
Non-cash Assets from Start-up $1,772,000
Cash Requirements from Start-up $395,000
Additional Cash Raised $59,000
Cash Balance on Starting Date $33,900
TOTAL ASSETS $2,259,900
Liabilities and Capital
Liabilities $30,000
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $39,000
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $69,000
Capital
Planned Investment $1,739,200
Investor 1 $0
Investor 2 $0
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $1,739,200
Loss at Start-up (Start-up Expenses) $451,700
TOTAL CAPITAL $2,190,900
TOTAL CAPITAL AND LIABILITIES $2,259,900
Total Funding $1,739,200

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Services

Defining your services in your business plan for agriculture fruit farm is essential. It is a step that enables you to plan how you will be delivering the specified services. How much will be the costs for providing your services and what type of workforce you will be requiring for implementation. In this business plan agriculture farm download pdf we’re listing the services of Fruit Land. If you’re looking for a general farm business plan, organic fertilizer business plan, or hydroponics farm business plan you can benefit from here.

  • Young Fruit Plants & Seeds: Our primary service will be to provide fruit seeds and young fruit trees, and plants. We will be offering this service for all types of fruit ranging from common fruit like apples to rare fruit like Feijoa.
  • Young Vegetable Plants & Seeds: We will also sell the seeds and plants of almost all types of vegetables.
  • Ripe Fruit & Vegetable Varieties: We will be offerings packs of ripe fruit and vegetables that have immense demand in our vicinity. Our ripe fruit offerings will include:
    • Apples
    • Mangoes
    • Pineapples
    • Oranges
    • Loquat
    • Raspberries, Strawberries, Blackberries, Blueberries, Cranberries, Golden Berries, Mulberries
    • Cherimoya
    • Grapes
    • Pineapple
    • Cherries and more.

Our ripe vegetable varieties will include:

    • Onions & Green Onions
    • Spinach
    • All varieties of Potato
    • Broccoli
    • Mushrooms & more.
  • Fertilizers & Farming Essentials: We’ll sell all the farming and agriculture essentials including
    • Organic Fertilizers
    • Sprayers
    • Mowers
    • Sickle
    • Hydroponics Equipment
    • Garden Tools
    • Miscellaneous Items

Marketing Analysis of Agriculture Fruit Farm

Before setting up a farm business it is essential to carry out a marketing analysis. Doing an accurate marketing analysis will enable you:

  • To identify your customers and thus their demands and expectations.
  • To study the market trends, previous and forecasted profit margins, market size, etc.
  • To explore the already-established market giants to adopt ways to outperform them.
  • To figure out a middle ground between your business profitability targets and the suitable price above which you won’t be achieving sales targets

Considering the importance of accurate marketing analysis, Sean hired a temporary marketing analyst to analyze the in-demand trends. In this business plan for farming and agriculture, we’re providing the marketing analysis of Fruit Land.

5.1 Market Trends

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The fruit farm business is not expected to suffer a decline in the coming years. It is because fruits are eaten and used in many restaurants and food industries. According to IBISWorld, fruit and nut farming businesses in the United States are currently holding a market size of $26 billion. Moreover, there is 1% room for growth in the industry in 2021.

5.2 Marketing Segmentation

If you are looking for how to start a fruit farm business you should first identify your customers. Listing the groups of your target customers in your starting a farm business plan will help you in analyzing their buying patterns.

The customers of Fruit Land will belong to these groups:

Agriculture Fruit Farm - Marketing Segmentation

5.2.1 Domestic Buyers

Our primary customers will be the individuals and families living in New York City. They are expected to purchase ripe fruit and vegetable varieties as well as plants from us.

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5.2.2 Restaurants

The second group of our target customers comprises restaurants that use fruit and vegetables to prepare their products. They are expected to buy from us in bulk.

5.2.3 Fruit Processing Industries

The third target group comprises the food industries that use fruits to prepare products. They will need our products for making fruit jams, canned fruit, salads, and other items.

Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Domestic Buyers 37% 52,000 54,000 56,000 57,000 58,000 10.00%
Restaurants 35% 48,000 49,000 51,000 53,000 54,000 10.00%
Fruit Processing Industries 28% 39,000 40,000 41,000 43,000 45,000 11.00%
Total 100% 139,000 143,000 148,000 153,000 157,000 10%

5.3 Business Target

Our business targets are

  • To decrease our expenses and costs of operations by 20% every three years.
  • To earn a net profit margin of $29.6k per month by the end of the third year.
  • To achieve and maintain a CSAT score above 90% within a year of our launch.

5.4 Product Pricing

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Our prices are very reasonable and lie within the same range as that of our market competitors.

Marketing Strategy of Agriculture Fruit Farm

To make sure that you get enough customers, you’ll have to develop a marketing plan for agriculture business. In this part of your agriculture business plan for small farm, you have to also analyze your monthly and yearly sales.

6.1 Competitive Analysis

Our competitive advantages are listed here:

  1. Our fruit, seeds, and plant offerings are more than any other fruit farm in the entire New York. As we are also selling rare fruit varieties like Golden Berries, Cherimoya, etc. we expect to gain more customers than our competitors.
  2. Besides the fruit, we’re also providing organic fertilizers, farming equipment, and hydroponics equipment. A fact that will help us boost our sales.
  3. Lastly, our policies are highly customer-care oriented. We will go all out to ensure customers’ satisfaction.

6.2 Sales Strategy

  • We’ll advertise our startup through Google Local ads service, social media, and newspaper.
  • We’ll offer a 40% discount on our garden tools and organic fertilizers for the first two months of our launch.
  • We’ll offer a 30% discount on our fruit plants and young trees for the first month of the launch.

6.3 Sales Monthly

Agriculture Fruit Farm - Sales Monthly

6.4 Sales Yearly

Agriculture Fruit Farm - Sales Yearly

6.5 Sales Forecast

Agriculture Fruit Farm - Unit Sales

Sales Forecast      
Unit Sales Year 1 Year 2 Year 3
Young Fruit Plants & Seeds 40,000 42,400 44,944
Young Vegetable Plants & Seeds 31,000 32,860 34,832
Ripe Fruit & Vegetable Varieties 52,000 55,120 58,427
Fertilizers & Farming Essentials 19,000 20,140 21,348
TOTAL UNIT SALES 142,000 150,520 159,551
Unit Prices Year 1 Year 2 Year 3
Young Fruit Plants & Seeds $44.00 $51.04 $59.21
Young Vegetable Plants & Seeds $33.00 $38.28 $44.40
Ripe Fruit & Vegetable Varieties $59.00 $68.44 $79.39
Fertilizers & Farming Essentials $64.00 $74.24 $86.12
Sales
Young Fruit Plants & Seeds $1,760,000.00 $2,164,096.00 $2,660,972.44
Young Vegetable Plants & Seeds $1,023,000.00 $1,257,880.80 $1,546,690.23
Ripe Fruit & Vegetable Varieties $3,068,000.00 $3,772,412.80 $4,638,558.78
Fertilizers & Farming Essentials $1,216,000.00 $1,495,193.60 $1,838,490.05
TOTAL SALES $7,067,000.00 $8,689,583.20 $10,684,711.50
Direct Unit Costs Year 1 Year 2 Year 3
Young Fruit Plants & Seeds $42.00 $48.00 $55.00
Young Vegetable Plants & Seeds $29.00 $32.00 $36.00
Ripe Fruit & Vegetable Varieties $57.00 $65.00 $75.00
Fertilizers & Farming Essentials $62.00 $71.00 $81.00
Direct Cost of Sales
Young Fruit Plants & Seeds $1,680,000.00 $2,035,200.00 $2,471,920.00
Young Vegetable Plants & Seeds $899,000.00 $1,051,520.00 $1,253,937.60
Ripe Fruit & Vegetable Varieties $2,964,000.00 $3,582,800.00 $4,382,040.00
Fertilizers & Farming Essentials $1,178,000.00 $1,429,940.00 $1,729,220.40
Subtotal Direct Cost of Sales $6,721,000.00 $8,099,460.00 $9,837,118.00

Personnel plan

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When you are writing a business plan agriculture, you should keep a record of how many persons you will need for a specific task. This will help you in developing your personnel plan and HR management plan.

7.1 Company Staff

Sean will manage and supervise the business himself. However, he will hire the following people:

  • 1 Co-Manager to help manage business operations
  • 1 Accountant to maintain financial records
  • 6 Fruit Farmers to plant and maintain fruits and vegetation
  • 2 Store Operators to display company’s sales items
  • 2 General Assistants for routine tasks
  • 1 Technician to upkeep the machinery
  • 1 Web Developer to manage the online presence
  • 1 Sales Executive to execute the sales strategy
  • 4 Cleaners
  • 1 Driver
  • 1 Receptionist/ Call Operator

7.2 Average Salary of Employees

 Personnel Plan      
Year 1 Year 2 Year 3
Co-Manager $14,000 $15,400 $16,940
Accountant $11,000 $12,100 $13,310
Fruit Farmers $65,000 $71,500 $78,650
Store Operators $18,000 $19,800 $21,780
Technician $9,000 $9,900 $10,890
General Assistants $16,000 $17,600 $19,360
Web Developer $7,000 $7,700 $8,470
Cleaners $30,000 $33,000 $36,300
Sales Executive $8,000 $8,800 $9,680
Driver $7,000 $7,700 $8,470
Receptionist/ Call Operator $6,000 $6,600 $7,260
Total Salaries $191,000 $210,100 $231,110

Financial Plan

When you make a fruit farm business plan you should keep track of the finances involved in all the steps. This will help you in estimating the short-term and long-term costs of running the business. Moreover, by analyzing your cash flows and profit margins your financial plan would give you a detailed insight into how much money you will be having at what time. This will help you in directing your long-term investments and expenses.

Besides giving you a profit and loss analysis, a financial plan will also help you in risk management. In a plant-related business, there is always a good chance of any fault in storing the seeds or plants. Therefore, you must have a financial reserve to cater for any unexpected condition, plant disease, etc.

To assist you in making an accurate financial plan, we’re providing the financial plan developed for Fruit Land.

8.1 Important Assumptions

 General Assumptions      
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.17% 8.22% 8.27%
Long-term Interest Rate 8.25% 8.30% 8.37%
Tax Rate 23.80% 24.03% 24.50%
Other 0 0 0

8.2 Break-even Analysis

Agriculture Fruit Farm - Break-even Analysis

 Break-Even Analysis  
Monthly Units Break-even 5342
Monthly Revenue Break-even $131,200
Assumptions:
Average Per-Unit Revenue $234.00
Average Per-Unit Variable Cost $0.66
Estimated Monthly Fixed Cost $162,500

8.3 Projected Profit and Loss

 Pro Forma Profit And Loss      
Year 1 Year 2 Year 3
Sales $7,067,000 $8,689,583 $10,684,712
Direct Cost of Sales $6,721,000 $8,099,460 $9,837,118
Other $0 $0 $0
TOTAL COST OF SALES $6,721,000 $8,099,460 $9,837,118
Gross Margin $346,000 $590,123 $847,594
Gross Margin % 4.90% 6.79% 7.93%
Expenses
Payroll $191,000 $210,100 $231,110
Sales and Marketing and Other Expenses $128,000 $129,000 $130,000
Depreciation $2,400 $2,440 $2,500
Leased Equipment $0 $0 $0
Utilities $3,090 $3,150 $3,200
Insurance $1,800 $1,900 $2,000
Rent $4,000 $4,100 $4,200
Payroll Taxes $28,000 $29,000 $30,000
Other $0 $0 $0
Total Operating Expenses $358,290 $379,690 $403,010
Profit Before Interest and Taxes ($12,290) $210,433 $444,584
EBITDA ($12,290) $210,433 $444,584
Interest Expense $0 $0 $0
Taxes Incurred ($2,458) $42,087 $88,917
Net Profit ($9,832) $168,347 $355,667
Net Profit/Sales -0.14% 1.94% 3.33%

8.3.1 Profit Monthly

Agriculture Fruit Farm - Profit Monthly

8.3.2 Profit Yearly

Agriculture Fruit Farm - Profit Yearly

8.3.3 Gross Margin Monthly

Agriculture Fruit Farm - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Agriculture Fruit Farm - Gross Margin Yearly

8.4 Projected Cash Flow

Agriculture Fruit Farm - Projected Cash Flow

 Pro Forma Cash Flow      
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $54,000 $58,320 $62,986
Cash from Receivables $19,000 $20,520 $22,162
SUBTOTAL CASH FROM OPERATIONS $73,000 $79,570 $85,936
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $73,000 $80,000 $86,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $35,000 $36,000 $37,000
Bill Payments $29,000 $30,000 $31,000
SUBTOTAL SPENT ON OPERATIONS $64,000 $66,000 $68,000
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $65,000 $67,000 $72,360
Net Cash Flow $14,500 $16,000 $18,000
Cash Balance $27,000 $29,000 $30,000

8.5 Projected Balance Sheet

 Pro Forma Balance Sheet      
Assets Year 1 Year 2 Year 3
Current Assets
Cash $278,000 $311,360 $342,496
Accounts Receivable $24,000 $26,880 $30,213
Inventory $4,000 $4,480 $4,900
Other Current Assets $1,000 $1,000 $1,000
TOTAL CURRENT ASSETS $293,200 $328,384 $369,104
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $17,500 $19,600 $22,050
TOTAL LONG-TERM ASSETS $26,000 $29,120 $32,760
TOTAL ASSETS $299,000 $334,880 $376,740
Liabilities and Capital Year 4 Year 5 Year 6
Current Liabilities
Accounts Payable $22,000 $24,640 $27,695
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $13,200 $14,784 $16,617
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $15,000 $16,800 $18,883
Paid-in Capital $30,000 $32,000 $33,000
Retained Earnings $55,100 $60,059 $66,065
Earnings $197,100 $214,839 $236,323
TOTAL CAPITAL $293,400 $319,806 $351,787
TOTAL LIABILITIES AND CAPITAL $308,400 $334,880 $376,740
Net Worth $295,000 $321,550 $353,705

8.6 Business Ratios

 Ratio Analysis        
Year 1 Year 2 Year 3 INDUSTRY PROFILE
Sales Growth 7.12% 7.89% 8.74% 3.00%
Percent of Total Assets
Accounts Receivable 9.24% 10.24% 11.34% 9.80%
Inventory 5.62% 6.23% 6.90% 9.90%
Other Current Assets 2.15% 2.38% 2.64% 2.40%
Total Current Assets 150.40% 151.20% 152.50% 158.00%
Long-term Assets 12.00% 12.10% 12.20% 12.00%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.67% 4.71% 4.75% 4.34%
Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
Total Liabilities 7.54% 7.60% 7.67% 7.38%
NET WORTH 102.03% 102.85% 103.79% 110.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.01% 97.58% 100.31% 99.00%
Selling, General & Administrative Expenses 93.73% 96.26% 98.96% 97.80%
Advertising Expenses 1.71% 1.76% 1.81% 1.40%
Profit Before Interest and Taxes 41.07% 42.18% 43.36% 33.90%
Main Ratios
Current 36 37 38 32
Quick 31.2 31.4 32.185 33
Total Debt to Total Assets 0.18% 0.18% 0.18% 0.40%
Pre-tax Return on Net Worth 74.83% 74.86% 74.89% 75.00%
Pre-tax Return on Assets 94.07% 98.77% 103.71% 111.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 32.94% 33.96% 35.01% N.A.
Return on Equity 55.01% 56.72% 58.47% N.A.
Activity Ratios
Accounts Receivable Turnover 7.7 7.8 7.9 N.A.
Collection Days 100 100 100 N.A.
Inventory Turnover 32.4 34.02 34.3 N.A.
Accounts Payable Turnover 16.1 16.2 16.4 N.A.
Payment Days 27 27 27 N.A.
Total Asset Turnover 2.4 2.5 2.6 N.A.
Debt Ratios
Debt to Net Worth -0.03 -0.03 -0.04 N.A.
Current Liab. to Liab. 1 1 1 N.A.
Liquidity Ratios
Net Working Capital $249,000 $262,944 $277,669 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0.86 0.87 0.89 N.A.
Current Debt/Total Assets 1% 0% 0% N.A.
Acid Test 27.4 27.6 27.8 N.A.
Sales/Net Worth 2.1 2.2 2.2 N.A.
Dividend Payout 0 0 0 N.A.

Hi-Tech in Every Way

The U.S. agriculture fruit farm industry produces millions of tons of grapes, apples, peaches, strawberries, pears, prunes, oranges, lemons, and other non-citrus and citrus fruits. The word ‘agriculture’ may evoke images of farmers with hoes working the fields, but the reality is the modern farm is high-tech in every way, from the planting and harvesting equipment to the software used to track crop production and maintain accounting records.

The business plan for an agriculture fruit farm will discuss success factors like the use of technology to develop a business that has cutting-edge products, production and delivery processes. Following are just some of the topics included in the final document.

  • Businesses merged or acquired and the synergy created in the new company
  • Management’s experience in modern agricultural techniques
  • Food technologies that address nutritional content and taste
  • Products that include type of fruits and other crops added to round out the year long production cycle, like vegetables and nuts
  • By-products produced like compost that is bagged and sold
  • Project income per product
  • Business differentiation factors, like organic fruits, combination of traditional and high-tech farming methods, fruits with unique quality associated with local soil and climate, etc.
  • Research & Development (R&D) activities that will keep the business on the cutting edge
  • Needed facilities, including greenhouse, water supply infrastructure, production plant, storage facility, and office building
  • Equipment requirements for planting, harvesting, and preparation of fruit for cold storage or immediate sale
  • Sources of customers for products, including farmers markets, food wholesalers, grocery store chains, etc.

These are just some of the important aspects of an agriculture fruit farm. The business plan will include all the elements of a successful business, like Executive Summary, management summary, operating plan, marketing plan, and financial projections.

Download Business Plan for an Agriculture Fruit Farm Sample in PDF

OGScapital writer specializes business plan themes such as fountain pepper farm business plan, hydroponics farm business plan, and help write a business plan for investors and help draw up a business strategy plan.