Appendix - Developing A Business Plan

Below is a step-by-step exercise to help you develop a business plan for your woodlot.

A. WOODLOT (RESOURCE) MANAGEMENT PLAN

STEP 1   Woodlot Owner Goals

List resource related goals you have for your woodlot. They should be specific. Here a two examples to get you started.

  1. To build a camp and enhance the wildlife on the property
  2. To harvest what I need to, but grow the woodlot for fifteen years and liquidate some of the growing stock to fund my son and daughter's education.
  3. _______________________________________
  4. _______________________________________
  5. _______________________________________
  6. _______________________________________
  7. _______________________________________

Step II   Professional Advice

After developing your goals, it is good practice to get advice from a forestry professional to prepare a woodlot management plan based on your goals. This plan will be used to guide your future operational plans. Working with the forestry professional at the time of plan preparation will help ensure the plans met your objectives.

B. FINANCIAL PLAN

STEP III   Markets

This step initiates the financial plan. Investigate available markets, and if possible, develop new markets. Remember, markets you developed your self may generate a better return than traditional markets. List the markets you acquire below (complete with phone numbers and addresses). You can list markets according to products.

Timber Markets

  1. ____________________________________________________________
  2. ____________________________________________________________
  3. ____________________________________________________________
  4. ____________________________________________________________

Recreational Markets

  1. _____________________________________________________________
  2. _____________________________________________________________
  3. _____________________________________________________________
  4. _____________________________________________________________

Other

  1. _____________________________________________________________
  2. _____________________________________________________________
  3. _____________________________________________________________
  4. _____________________________________________________________

STEP IV   Strengths and Weakness Assessment

Transfer the lists of strengths and weaknesses of the woodlot and yourself that you determined in Chapter 5. This step forces you to put the strengths and weaknesses on paper where you can refer back to then when developing your strategies in STEP VI.

Strengths

Woodlot:

  1. (i.e. Located close to mill, transportation cost low)
  2. ______________________________________
  3. ______________________________________

Woodlot Owner:

  1. (i.e. Own a farm tractor with winch)
  2. _______________________________________
  3. _______________________________________

Weaknesses

Woodlot:

  1. (i.e. Located in another county or province)
  2. ________________________________________
  3. ________________________________________

Woodlot Owner:

  1. (i.e. lack of time. Demanding job and family)
  2. ________________________________________
  3. ________________________________________

STEP V   Financial Goals

List financial goals that you developed when completing Chapter 5. Remember to state clearly and be specific.

  1. I want to generate $5,000/year, etc
  2. ______________________________________
  3. ______________________________________
  4. ______________________________________
  5. ______________________________________

STEP VI   Strategic Plan

Review the markets you identified in Step III and your strengths and weaknesses in Step IV. Then develop strategies to achieve both your resource goals STEP 1 and your financial goals STEP V.

You may find all your goals are not compatible and you will have to prioritize your goals. After prioritizing your goals, working with your strengths, weaknesses and markets, you can develop some realistic strategies to achieving your goals.

    Strategies:
  1. Harvesting strategies: (ie.To use contractors and harvest old timber first.)
  2. Silviculture strategies: (ie.To work with natural regeneration.)
  3. Recreation strategies: (i.e.To make woodlot assessable to public)
  4. Wildlife strategies:  (i.e.To improve wildlife habitat by following wildlife guidelines)
  5. ________________________________________________________________
  6. ________________________________________________________________

Remember, strategies will state the direction (method) with which you will manage your woodlot to achieve your goals.

STEP VII   Operating Plans (One and Five Year)

Using the recommendations in your woodlot management as a guide, list the activities you want to achieve in the next five years.

FIVE YEAR OPERATING PLAN

ACTIVITIES
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
1. ie. Boundary Line (km)
1
       
2.          
3.          
4.          
5.          
6.          
7.          
8.          
9.          
10.          

From your five year operating plan, you can generate a five year income forecast.

FIVE YEAR BUDGET
 

  Year 1 Year 2 Year 3 Year 4 Year 5
Revenues          
           
           
           
Expenses               
ie. Boundary Line 1600        
           
           
Surplus/Deficit          

After estimating the revenues or costs of the forecasted activities, place these estimates on your five year budget as in the example above.

After completing your five year budget you will be able to compare the results of the forecast to see if the numbers meet your financial goals. Remember, the activities you listed in your forecast will meet you resource goals; however, the financial results may not meet financial goals.

If the forecast does not meet both your resource and financial goals, you may have to modify some of your strategies. You may also have to modify some of your goals (financial and resource) and go through the process again. It may take several runs before your five year budget generated by your five year operational plan meets your financial goals.

Once your five year forecast meets both your financial and resource goals, you can develop your one year operating plan.

ONE YEAR OPERATING PLAN

Activity
Spring
Summer
Fall
Winter
         
         
         
         
         

 

ONE YEAR BUDGET

Revenues $
   
   
   
Expenses  
   
   
   
   
Surplus/Deficit  

Does the bottom line meet your financial goals in STEP V? If not, try again. Keep trying until your budget meets you financial goals.

Once you are satisfied with your business plan, the fun begins. As you implement it, compare your progress to your forecast. Remember, woodlot management is a small business that requires planning! Without a plan it is difficult to control where the business is heading.