In Part 1 we looked at the 5 questions you need to answer to be eligible to enter the GoGettaz Agripreneur Prize Competition. In this article, we cover questions 6-10 and will dig deeper into the questions you need to answer to run, grow, and scale your agribusiness in the real world.
The 10 questions:
- Am I an entrepreneur?
- Do I have a great business Idea?
- Do I have a market and who can I ask to test if the idea will work?
- How thoroughly can I build my business on paper before I spend money?
- What do I need to start a legal business in my country?
- Where am I going the get the money?
- How can I develop my product or service to be coronavirus-proof?
- Who do I need on my team to do the things I cannot do?
- Where will I build my business?
- How can I make sales?
6. Where am I going the get the money?
One great way to get $50,000 to launch, grow or scale your business is by entering the GoGettaz Agripreneur Prize Competition. Even for contestants that don’t win, the media coverage, online mentorship courses and programmes, and introductions to investors are extremely valuable.
You don’t need a lot of money to start a business. Agripreneur Ntando Thabethe started Elite Crop in her backyard with less than R400 ($20) worth of seeds. Self-funding or getting investment from family and friends can be a good option for a lean start-up. This excellent article by Professor Serguei Netessine looks at the lean start-up approach.
Agribusiness crowdfunding apps like Agri Zoom in Congo can get public investment money directly to the farmers who need it.
If your business has noteworthy growth potential, you can explore grants, angel investors, venture capital, start-up incubators and accelerators to get finance.
Banks offer business loans and credit. Beware that interest rates on a credit card can sink your business before it has even begun. If you do decide to approach a financial institution for money, compare offers and institutions.
Specialized agricultural banks are available in some countries that provide loans to agribusinesses on terms that are more understanding of the profit horizon of such businesses.
Trade services. If you need computers and you build websites, see if you can strike a deal with a hardware seller to work on their website in exchange for equipment.
7. How can I develop my product or service to be corona-proof?
The coronavirus pandemic will change the agrifood industry forever. Imports and exports will take months, if not years, to recover. Food traceability will be even more important. Food products themselves may change drastically.
With millions of litres of milk discarded in Britain during the pandemic, alternative new products like all-natural room-temperature yogurt are being developed. Farmers and food processors must create active back-up processes to turn their products into something completely different should the need arise.
Going digital doesn’t seem possible for every business, but to corona-proof your business it might be exactly what you need to do.
Writing for Forbes, Ted Ladd says, “One type of business has survived the crucible of the coronavirus: the multi-sided platform. … At its simplest, a platform is a marketplace where buyers meet suppliers. Amazon and Google epitomize this category.”
If you do not have the capacity to move to build a digital platform for your business, build relationships with online platforms instead. In the agriculture sector Wakulima Market in Kenya, Foodlocker in Nigeria, AgriZoom in Congo, Brazzaville, and AgroCenta in Ghana are all developing platforms that link farmers to the market. Who is already working in your sector that can help link you to the 4th industrial revolution?
8. Who do I need on my team to do the things I can’t do?
The fastest way to sink your new business is to do everything yourself. One human cannot be the perfect product designer, laborer, website builder, accountant, marketer, lawyer, IT technician, and sales rep, all rolled into one. There are too many diverse skills that go into building a business and there definitely are not enough hours in the day.
Getting the right co-founders on board can fill in essential skills gaps in core functions of your business. Let’s look at an example. You are an app developer. Your business is collecting and transporting produce from smallholder farmers to food processors after they made a purchase on your app. By adding a supply-chain or logistics expert as co-founder your business may soon be delivering agricultural supplies to your farmers during the produce collection cycle, making every trip more efficient and more profitable.
Getting a team together during the coronavirus pandemic might even provide some extra benefits. Many talented people are searching for jobs. Thomas Koulopoulos on inc.com says:
“For the foreseeable future, we are likely to experience a glut of talent. If you’ve got a killer idea, this is a great time to attract and collaborate with top-quality players. The same goes for the sort of talent you need to help with the many operational pieces of starting a new business, such as setting up your website, creating your branding, or support and administration.”
Whenever different people are involved, write down everything that is expected and understood about the relationship.
“If you start your company with co-founders, you should agree early on about the details of your business relationship,” says Richard Harroch from AllBusiness in The Complete 35-Step Guide for Entrepreneurs Starting a Business. He also says, “perform a comprehensive reference check before you hire an employee” and, before you start hiring, “use consultants and freelancers to supplement your team.”
9. Where will I build my business?
Agrifood company Fresh Direct Nigeria started on rented farmland, but they soon realized that farming in the city would be far more beneficial. They had problems with water, electricity, finding staff, and getting their food from the farm to the people who wanted to buy it. Starting a hydroponic urban farm inside shipping containers in Abuja solved all their problems.
If you are starting the next Amazon for fresh food, but your internet connection is one bar of 3G signal on your phone, then you might have to rethink your location.
The same is true for produce. You may be a great farmer who produces 50 tonnes of beautiful tomatoes on cheap farmland you are renting for an excellent price, but if you are 500km away from the nearest city and the roads are so bad that your truck loses a tire every two months, your profit will go down the pothole.
Make sure your location fits your business.
10. How can I make sales?
The absolute best way to get sales is to sell something people need. Even then, sales don’t magically appear from nowhere when you build your business. While there are plenty of resources online to teach you how to be a better salesperson, the key is that sales are about human relationships, and making consistent sales is about establishing a process.
Zarema Plaksij from SuperOffice says “A sales process is a set of repeatable steps that a salesperson takes to take a prospective buyer from the early stage of awareness to a closed sale. Typically, a sales process consists of 5-7 steps: Prospecting, Preparation, Approach, Presentation, Handling objections, Closing, and Follow-up.”
Matthew McCreary, Associate Editor at Entrepreneur.com says, “Start by identifying targets who want your product or service. Find early adopters of your business, grow your customer base or put out ads to find people who fit your business. Then, figure out the right sales funnel or strategy that can convert these leads into revenue.”
Social media advertising has made it possible for anyone to reach specifically targeted people who will be interested in your product. It won’t cost a fortune either.