Development of an opportunity requires both:
This section addresses development of a viable business case for the planned enterprise.
Development of a business case for any proposed cropping development is a practical approach in demonstrating the benefits, costs and risks associated with the proposed development.
A well-developed business case provides a solid foundation for any project, ensuring that the proposed development is viable, aligned with the enterprise goals, and has the necessary support and resources to succeed.
The benefits of developing a business case include:
Notwithstanding the benefits of preparing a business case, it should remain a living document, and provide a guide for investment and implementation that is constantly updated as new information and experience comes to hand.
Preparation of a business plan provides the means to organise thoughts and rigorously evaluate the assumptions of a proposed development. Key elements of a business plan and the rationale are summarised in the following sections. A template for preparation of a cropping business plan, incorporating links to relevant information and resources, is available here.
Outline the background of the property, the ownership and structure of the business and the vision of the proposed cropping enterprise. While this information may be obvious to the landowner, it sets the scene for other parties with an interest in the business plan (financiers, technical and commercial advisors, government regulators etc.).
Assessing the suitability of climate and soil type, plus availability of water resources (for irrigated cropping) and matching these to proposed crops is critical to success of any cropping enterprise. A rigorous soil and land capability assessment process is recommended.
Where development requires clearing of regulated native vegetation, a specific process to soil mapping and land capability assessment is required to secure regulatory approval as outlined in the Business Case Template.
Any cropping development may trigger a requirement for compliance with numerous pieces of legislation, particularly vegetation management. Recognition of legislative requirements, assessment of their relevance to the proposed development, and securing relevant approvals for the proposed development is critical to the legal implementation of the proposed project. A detailed list of legislation and links to resources is provided in the Business Case Template.
In addition to regulatory approvals, recognition of potential natural hazards (floods, bushfire etc) may be required for development approvals and is critical for enterprise sustainability. Links to mapping resources to identify natural hazards are provided in the Business Case Template.
A clear plan for marketing the proposed commodity or product is necessary to provide all parties with confidence in the commercial success of the planned enterprise. This should include an understanding of the outlook for the target crops, the target markets, route to market and logistics of harvesting, processing and delivering a crop to market.
Establishment and operation of a successful cropping enterprise requires an appropriate set of skills, capability and personnel, plus assistant from supporting professional advice. Planning the organisational structure to provide the capacity to deliver the proposed cropping enterprise is a key pillar to success.
A robust financial analysis of anticipated costs and returns is mandatory to the investment decision in development of a cropping enterprise. Financial assumptions, particularly realised yield and market prices and operational costs can all vary significantly from planned, so financial measures should be evaluated to ensure they remain robust across a range of sensitivities.
A crop budgeting template is provided with the Business Case template. The Business Case template includes links to example farm budgets and recent commodity prices.
Risks identified throughout the business plan should be assessed against the project risk appetite. Application of a standard approach to risk assessment consistent with AS/NZS ISO 31000, involving assessment of risk liability and consequence, is recommended. Design, management and monitoring measures to mitigate risks should be identified and included in the plan. It is suggested that a project should not proceed if any risks have a residual rating (after identification of mitigation measures) is 15 or more.
Support is available through the following Queensland Government programs:
Further details are provided through the links above.
These programs, and other funding opportunities identified in the Funding opportunities and support services section provide support for individual elements that contribute to preparation of a business case, or overall business plan collation.
Professional services that may assist with technical, regulatory, commercial and financial elements of a business case are listed under Professional Resources.
