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5 Questions that determine the success of your Agri-business .


This global lock down period has shown that at the base of it all one of the most pressing human needs is FOOD.

As a matter of fact, people now tend to eat more than before as they are mostly at home. While it is obvious that this pandemic is already eliminating some industries, it is equally repositioning others and birthing new ones.



In the post covid 19  period, we are going to witness a massive re-empowering of essential sectors such as Agriculture, Health, Technology and Education by proactive governments.

And agricultural related businesses (such as farming, food processing, agro-logistics, agro-allied production or even sales) are going to thrive more than ever because people

So, if you are an Agri-business owner that want to  expand his business or you always wanted to start a successful agribusiness venture, now is the best time to start preparing for it. Remember that farming and every other agribusinesses in Nigeria  are profitable ventures when done right.
Here, we look at the importance of resolving the marketing dynamics before setting out.

Market Survey.

Most people after attending a seminar on agriculture or after seeing someone who is making it big in farming catch the "agrifever". Then they just decide to start out at that person's level or close to it forgetting that the he or she did not get there in a day, and that they may not have the market network that he or she has.

What they fail to see is that in agribusiness like any other  business, you have to start  with the end in mind. By end in mind, l mean profitable sales. For instance, buying and rearing of 10,000 poultry birds or planting 10 hectares of cassava, without thinking of how to sell them may eventually lead to a financial loss.



That is why mapping out a marketing plan or at least identifying potential market is very important even before you start, as most farm produce are highly perishable and sell at the best price when they are still fresh.  Relying on middle men's (market women and retailers) patronage on your farm alone will not make you lots of profit. This is because they usually insist on buying at ridiculous prices (farm gate price) as they believe the farmer has no choice.
So, if by harvesting period, your only source of patronage are the middle men, you may be struggling to break even.

It is therefore important to think of how to market your farm produce ahead of production so that you will not result to panic sales at the end of the day. And if you are already into production without having figuring out your  marketing strategy, please don not wait till harvest time.


5 Important Questions you need to answer :

1) Demand: is there demand what you want to sell?

You need to conduct your research to find out if there is indeed a demand for the crop or farm product you intend to grow or produce. Or if there is already an excess supply or glut of the crop or product in that area? As this will ultimately affect the selling price of your produce.


If there is a demand for it, then that's fine. You can determine the selling price to an extent.

Otherwise, you might need to source your market else where, maybe in another city or state where there's demand for it. If not, you will have no control over the selling price of your produce in your area and you just have to accept any price you may be offered .

This reminds me a family friend who is into farming on a part time basis. He plants his watermelon on a rented farm in Ota, Ogun state, Nigeria but transports them after harvest straight to big markets in Lagos state Nigeria, where sellers usually compete to buy from him. And he makes his cool money

Better still you can plant another crop or sell another product that is scarce to find in that area. You can be sure you will be fully booked before harvest time as you will  be meeting a real need.

2) What marketing channels will you use?
This simply refers to how will you spread the awareness fo your produce or products to your target market even before they are ready for consumption. This is because there is a limit to how much family and friends can buy from you. Will you be leveraging your phone

3)What distribution channels will you use?

This is a way of finding out how your products will get to your customers. Will there be a need to hire a bus in order to convey the goods? Are you going to need a warehouse or not?   The fact remains that the further away your sales can take place from your farm or production site you, the higher your chances of increasing your profit.


4) What is the proposed average profit margin of that venture?

Profit margin is the range of what is usually left after deducting your expenses from your revenue. Why is this important you may ask?

Since Every agribusiness  has its own range of profit,this will enable you to identify the sales strategies you should engage. As some businesses tend to thrive more on turn over rate ther than per unit profit. Then you can know if you can play the game of numbers.

5) What is your plan B or C ?
As awkward as this sounds, you need to have an alternative plan(s) regarding sales. Just in case the original plan does not work.

For example, If you are considering going into or already into agricultural production either arable or livestock production, you may need to go a step further in increasing the value of your farm produce. This is called value addition.

This will help prolong the shelf life of your produce, reduce the pressure to sell at a give away prices (Farm gate price) and increase your selling price. Example  includes converting your cassava tubers to starch or garri  through processing.

Please comment and share if you found value.

Thank you for reading.

Success.


By
Jumoke Ayeni

Agricultural Economist | Blogger


Comments

  1. Thanks for sharing this awesome , invaluable and highly relevant content for a time like this.

    Proper planning should go to any venture for almost predictably wonderful result.

    All Agric owners should book mark and follow this blog to learn of the latest trends.

    ReplyDelete
  2. I am glad you found this useful. Thank you for reading

    ReplyDelete
  3. still need advice on agriculture

    ReplyDelete
  4. Farming is a great way to make money, but it takes time and effort. Before you start your farm- get ready with marketing strategy that will help increase exposure for the product!
    Here are some tips from an Agriculturalist about how best practices work when starting out AgriErp:

    1) Prepare properly- know what resources can be used like finance or personnel; don't overlook impacts on land quality such as erosion from heavy rains which may affect crop yields
    2) Gauge public opinion - find reliable local sources so people aren’t forced into buying inputs at higher prices
    3) Assemble equipment carefully
    4) Plan annual sales promotion events
    5) Devise ways of promoting produce through

    ReplyDelete

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