Today’s agriculture is changing and evolving. Agriculture cannot be seen as a hobby or rural development initiative only but as a business which requires high level management. Many agribusinesses have been short-lived because the owners failed to get some things right. They were just captivated by the initial ROI and developed passion immediately. They put their hard-earned or loaned money into business and waited patiently for bountiful return, unfortunately, the business could not survive and return becomes an illusion. Although, passion is an important requisite in any agribusiness but it is not enough to guarantee long term success. The following experiential tips are very germane to see through an agribusiness venture to the success destination;
1. Training and Learning: It is good to acquire necessary knowledge and practical skills in any agribusiness you want to venture in from experienced farmer or consultant. Many entrepreneurs don’t even want to learn the nitty-gritty of business they want to venture in, they just want to start making money. The truth is, if you don’t learn, you cannot become leader in your business. An agribusiness owner that wants to improve its operation and profit need to learn new and pertinent technology. You also need to research on what’s working and not. You can learn by attending seminars, exhibitions and conferences. Equally, you can buy agribusiness books related to your field from trusted source. Everyone directly or indirectly involved in business needs training and learning for optimum performance.
2. Market for the product: Market is an important aspect that an you need to consider before operating a business. It entails understanding consumer wants. This activity need to come first in any agribusiness venture. Market analysis is the basis of business planning. Some people rush into business without adequate market information for their products or services. You can write your business plan yourself or give it to business development expert that has pratical knowledge in agribusiness. Nevertheless, proper marketing plan should include;
Product-Market Fit: There is need to fashion out the right product for your market. Most agricultural produces come in breeds or varieties. Some markets accept particular varieties or breeds while some don’t specify.
Place to sell the Product: Understanding the marketplace is fundamental to marketing success. Before you launch your product, it is very important to know where to sell your product. Place also signifies the road or channel products will take. Some products can tolerate long distance while some cannot. Knowing when to supply your produces will help you to properly plan your production.
Price to sell in the Market: Price is what buyer gives up in exchange for a product. Setting prices for products depends on how much buyers are willing to pay. There is a lot of variation in price of agricultural produces due to seasonality and other factors. Prices of some farm produces are usually high during scarcity and only come down during glut period. It is important to understand market trend in order to set good prices for your products.
Cost and Input analysis: You need to analyse cost based on current market information and situation that best fit production area. Some people don’t analyse cost based on requirement of production area but they find out that their guess is unable to take them through the production cycle. When planning cost, it is important to plan for contingency that may ensue along the way. Some agribusiness projects get stuck because of wrong analyses. It is essential to do correct cost and input analysis for project. When you use good inputs in suitable climate, you get the good result. Remember to get agronomic training and/or technical support from input supplier.
Promotion of Product: It entails communicating your product to customers using various promotion strategies. Promotion also entails advertising, packaging and branding. Many sellers are using health benefit to promote their products.
3. Investment/Production Climate: A good investment climate makes agribusiness to thrive. Each crop or animal has its own climatic requirement. It is important to visit production area and analyze all climatic factors for better result. It also entails understanding security condition and peculiar environmental hazards in the production area. In most crop and animal farming, important climatic factors to consider are temperature, soil & topography, sunshine, wind, rainfall or water bodies or available water. Careful analyses of those factors are important for success.
4. Workforce: Farming is not a business you can do alone; you need the right people to work with. Your workforce may include, Technical personnel, Farm Supervisor, Farm Manager, Permanent workers, Casual labourers, etc. Proper personnel analysis need to be done to ensure work is carried out appropriately and efficiently. Always motivate your personnel towards better performance. As customers are important to continuity of business, so also is workforce hence the need to take proper care of them.
5. Management: Management is a multifaceted function in agribusiness. Every aspect of agribusiness need good management practices. Many agribusinesses failed not because of lack of fund or right workforce but lack of good management practice that cut across all levels. Management also entails proper monitoring, maintenance function, resource use efficiency and cash flow management. There is need for proper management of production, resources (inputs), workforce and risk.
6. Three Ps of Agribusiness: The three Ps of Agribusiness include Patience, Persistence and Perpetuity: These are very crucial qualities on the part of agribusiness owner especially when the business is just starting or growing.
Inadequate Patience, Persistence and Perpetuity (3Ps) have pushed some startups out of business. It often takes some times to breakeven in agribusiness. Therefore, any startup that want to venture into agribusiness must exhibit this 3Ps of Agribusiness.