What are the things you
need to start a successful Agriculture Business?
- Business Idea
- Knowledge
and Technology
- Suitable
Property
- Investment
- Market
- Risk Management
How to Select an Agri Business Idea?
This is the most important part of your business. If you select the right idea, you will be success in future. To get an idea about a suitable business you can check below factors.
- Potential Business Area – If your area has favorable weather condition for farming and if it is possible to find suitable lands for low cost, you should consider about farming. Or else, you can think about value added product business. You can purchase fruits, diary or vegetables from farmers and make some value added products or processed products which also have good profit and market.
- Market -
your product or service business idea should be marketable. If you come up with
brilliant spicy food idea in non-spicy society, your idea will not be
marketable. If you are planning for a long term business it is important to see
future market trends as well.
- Risk and Profit – In general condition
people say “Higher the Risk, Higher the Return”. However you should consider
about the potential risk and profit you can earn. As a startup business it is advisable
to go for low risk businesses than the high risk. Anyway it is entirely up to
you.
Selecting a suitable idea will take some time, yet it is important to study all of those factors and select the business which has highest profit relevant to the risk involve. For this you can even get some expert’s advice to make sure whether your idea is viable or not.
Knowledge and Technology
After the idea, you must have the required knowledge for the business or knowledge should be available to acquire easily. Most of the time you can get conventional agriculture knowledge from relevant government departments, or there are many websites, you tube channels and blog sites which give you the basic knowledge on conventional agriculture businesses.
However If you are looking for advance agriculture technologies or processing methods, you have to find a way to access that knowledge. There may be some government institutions to help you or you may have to find your own ways to acquire that knowledge.
Acquiring proper knowledge and technology is important to increase the effectiveness and efficiency of your business which help you to stay competitive in the market.
Selecting a Suitable
Property
Selecting a suitable property is directly involved with the cost of products. There may be few properties required for your business. Those required properties can be categorized as;
1. Land or Building Depending on the Business type. You can select a land if you are going to start an agriculture farming business or building if you are thinking about a value added product. This is just identify your basic requirement, however when selecting a land or building for a business there are many other factors to consider.
2. Required Machinery – As per the selected technology you may have to purchase some machinery for the business. As an example, if you are going to make some dehydrated foods, you have to purchase a dehydrator, Automatic packing machine, etc. However, depending on the area some works can be done manually if cheap labor is available. So you can reduce the properties.
You have to study all the above factors properly and select the optimum solution when selecting a property for the business.
Investment
After selecting the required properties you can have a good idea about the investment you need to start the business. There are many ways to do the investment. Most common methods are;
1. Investing your own savings
2. Bank Loans
3. Joint Partnerships
However the investment method also depends on many factors. If the business is new to you, better to invest small amount first and study the business while doing it. Also you can start with manual works, and move in to automated high technology with higher investment later. This will reduce your risk of investment. But if you are planning for large scale production, then definitely you have to go with higher investment and high technology at the beginning
Market
“How to capture the local and export market” is the most important thing in your business. As long as you satisfy your customers they will stay with you and they will loyal to you too. Therefore you should do a market survey and get an idea about your market and market behavior. It is better not to target large market segment at the beginning and start the business with a small market. Later with the development of your business you can expand the market too.
This market study should be done at the beginning of the business and your production planning should be in line with the market requirement. If you do over production, your products waste, and you may have to spend additional cost to store them. If you do under production, another competitor gets good chance to enter in to your market. Therefore market study plays a main role in your business.
Risk Management
Every business has some level of risk for the investment. Therefore you have to consider the risk and take necessary steps to reduce the risk. Some of the common and effective methods of risk management are;
1. Insure the Business
2. Share the investment (Joint ventures)
3. Combine 2-3 products/businesses
4. Creating a good business portfolio
Insurance is the basic method. You can easily insure your business. However you have to study the insurance policies first, as some insurance companies add some unreasonable conditions to the insurance policy.
Those are basic things required to start an Agriculture Business.
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