Creating a Cattle Operation Business Plan

by Victoria Van Harlingen; Updated September 26, 2017
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No one can guarantee success in the cattle business, but you will greatly increase your potential for success if you have a good business plan. Before you create a business plan however, you should thoroughly research the types of cattle operations available.Your plan will be influenced by which type of cattle operation you choose. Creating a business plan should always be the first step in starting a new business venture.

Basic Business Plan

Step 1

Develop a mission statement and set your business goals. An example of a mission statement might be "To provide the the best tasting, most humanely raised freezer beef in the tri state area." Your goal may be to sell enough freezer beef to pay the mortgage on the farm.

Define the size and type of operation. Keeping with our freezer beef model, choose a breed or type of beef cattle and decide if you will raise your own calves or buy weaned calves from a cow/calf producer. Working through the business plan will help you decide if your initial goals are feasible.

Step 2

Marketing is the most important part of your business plan. The marketing part of your business plan defines how you will sell your cattle and make money. The type of cattle operation you choose will determine the type of marketing activity you will perform. Basic marketing principles apply to cattle operations the same as any other business. Keep the four P's of marketing in mind: product (cattle), promotion, planning and place (distribution). You have to define what you are selling, who your potential buyer is, how you will let those buyers know you have cattle for sale, and how you will get the cattle to the buyers.

Step 3

The financial management section of your business plan includes all financial impacting information. This includes cash flow projections, equipment costs and inventories, break-even analyses, production records and expenses. The type of cattle operation you choose will depend on the financial resources you have available and your ability to withstand fluctuations in cash flow. A stocker business for example will need enough cash to purchase land with shelter and water, purchase calves and feed, and be able to wait up to a year before selling the cattle to recoup expenses and make a profit. Production records will be important to understanding calf pounds of gain to feed conversion ratios and thus help make descisions on what type of cattle to purchase next year.

Step 4

Define your organization and management needs. Work out the day to day operations of your cattle business including key personnel and their activities. Cattle are living breathing creatures that need daily care. Any good plan needs to define how that care will be given and by whom.

This section also defines ownership plans, insurance, taxes and estate planning. It's important to search out a good farm tax accountant to help you with the tax and estate planning aspects of your cattle operation. As a farm you will have different tax rules than many other types of businesses. Farm insurance includes your house, barns and equipment plus liability. Your farm policy may or may not include your cattle. The type of cattle operation you have chosen will determine if you carry a separate policy for your animals.

Tips

  • Even if you are already the owner of a cattle operation a yearly business plan review can help keep you focused on success.

    Most cattle operations take 12 to 24 months to produce a profit. Be sure you are prepared to support such a long production cycle.

    Don't hesitate to visit other farms to "talk cattle." There is nothing a cattleman loves more than sharing information about his or her herd.

About the Author

Victoria Van Harlingen has been writing since she was editor of her high school newspaper. She has spent 20 years producing marketing and public relations work for various businesses and non-profit organizations. Her articles have appeared in several local print publications. Online credits include eHow and Answerbag.

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