How To Prepare For Any Farm project like a business man.

A huge number of people are developing interest in the agricultural industry as it is proving to be one of the most lucrative ventures. Everyday the competition increases with increase in interested people worldwide.

This article is designed to help you prepare any farming project and be massively successful at it.  Carefully planning your idea will allow you to predict Any possible problems That may arise before they come. The failure or success of the farming business will depend on the following important factors.

·         Dedication and will to reach your goal despite the challenges.

·         Availability of Technical skills

·         Basics of financial  management, marketing, and record-keeping skills

·         A market research plan that is practical and applicable

·         Honesty to yourself

As a new farmer or a farmer looking to start a new project in which you have no prior experience in, you need to consider all these factors and Your chances of success in the industry will increase.

Self-analysis

What is your reason to venture into Agriculture?

It will help if you a lot if you are well aware of the main reason that pulls you into the industry because once the challenges kick in it always boils down to this reason.

Is any of this one of your answers?

1.        Freedom from your daily routine

2.        That you want to be your boss

3.       That you want to do what you want to do whenever you want to do it

4.       To improve your standards of living

5.       To escape the boredom with your current job

6.       You have a product that you think is in demand

There are no right or wrong answers here since you might find that your reasons vary as time goes on and with the progress of the project. This is purely for clarity. It is very important to be able to identify things that might be obstacles in your endeavor.

These are some of the possible reasons that will pull you back.

Possible setbacks

1.       Anything that would prevent effective marketing.

2.       Any reason that would make the required factors of operation unavailable to you.

3.       Capital requirements way above your comfortable limits.

4.       Poor product-market fit

5.       Anything that would make you unable to change your plans when circumstances change .

Starting a new business, especially in farming requires certain personal traits and qualities.

The following are vital questions about your character that will be essential to your Farming business. They will help you evaluate yourself to know whether or not you will be able to face the emotional and financial strains involved with the business.

Please note that this does not mean being pessimistic but rather being wisely prepared incase anything goes wrong for every business comes with its own risks.

If the answers for the above questions is YES for you then it means you are ready to take on the project.

1.       Are you prepared to lower your standards of living If needed to enable your young  business  to establish properly?

2.       Are you comfortable with working up to 16 hours a day? Over the weekends and holidays.? Because unlike 8 to 4 job In agriculture you work against accomplishments and not time this is important to note especially in the beginning . As the project grows you can get more help and have less involvement if you want .

3.       Do you have the emotional strength to withstand the stress that comes with possible financial loss.  Agricultural losses can be devastating sometimes.

4.       Do you have the physical stamina to handle the workload and schedule, or can you afford such help in terms of  reliable hired labor?

5.       Is your family is prepared to go along with the challenges that come along with the business. Because the people close to you must bear the load too in some way.

6.       Are you financially ready to sacrifice part of your savings In case your plan fails ?

7.       Is the possible outcome exciting enough to justify any kind of risk.?

Find your niche

The most common attribution of success in every successful business is attributed to the time taken in  finding  a proper  niche. This is one of the most critical problems faced. In the early stages of your planning. And this determines the feasibility of your idea. Many people venture into agriculture so blinded  by their dream and vision the outcomes that  they failed to thoroughly evaluate the niche they will serve.

Idea feasibility self test.

Before you invest your resources, the following exercise will help you separate. Good ideas from the bad ones, have the potential to fail.

1.       Identify and briefly describe the project you’re about to start.

2.       Identify your revenue models.This are the various channels of income in your business for example , a potato project could have  the following possible revenue models:

·         Selling fresh harvested potatoes

·         Selling value added potatoes- cooked  or baked

·         Selling potato seeds.

·         Making valuable online content about potato farming (long term goal)

·         Consulting other interested farmers about potato farming (after you succeed in all of the above)

3.       Does your product or service satisfy a need in the market? Here it is important to check out the pain points in the market .Your products should satisfy the market in terms of price,quality and quantity. In Agriculture this may be challenging to establish since most of the projects are seasonal .Some short and others long season.

4.       The product you’re planning to produce does  the demand exceeds supply.

Sometimes you may produce a product where the market is already saturated. The best way to take on this challenge would be to add value to your product to not only increase its shelf life significantly but to also set your product apart from the rest and feed a different kind of demand.

Market analysis

As an owner of a starting agricultural business, you must know the market for it to be successful. You need  to analyze the market available to you both online and offline. This process will demand significant effort but is very necessary.

The market analysis does not have to be costly and you don’t have to be a qualified statistician to do it as well. A simple post on social media where you possible peers hang out would help. For example if you need to know the price ranges of potatoes local you could easily search on Facebook and find potato farmer groups. Here you can ask anything from current prices of both inputs and outputs and get answers from both farmers and experts in the field. It is possible to even connect and network prior to starting your project since event information will be available in such platforms.

Analyzing the market just means gathering facts about your consumer’s  an potential customers.

Understand the demand of the product or service, you intend to invest your money and time in . In this research, the more information you gather from your environment, the greater the chances are of capturing  that perfect niche.

You need to have the market knowledge before you invest in agricultural business.

To determine if your product or service will sell well. The following are self assessment  questions that will help you collect the necessary information for your farm.

They give you a good idea of the kind of market planning you need to do for your farm. If the answer is no any questions will mean you’re planning is weak. So you need to continue the research until the answer to all the questions is  yes.

1.       Do you know exactly who your customers will be?

2.       Do you understand what the need and what they want?

3.       Do you know where they are located and how to reach them?

4.       Will you be offering the kind of product or service that they will buy?

5.       Will prices be competitive considering quality, value and quantity. Without compromising your profits?

6.       Will your promotional strategy be effective enough to make sales and keep your business alive ?

7.       Do you understand how your competitors operate and how  they compare to you?

8.       Will  from be conveniently located to Serve consumers or buyers? Or do you have plans for efficient logistics to ensure so?

Plan your start

Up until now, you have identified the problems you will face on the question concerned. In converting your idea into reality. You’re also ready to determine whether your idea is feasible. You are aware of your qualifications and deficiencies?

You have learnt whether your product or services are needed or not.

The following questions will prepare you for the start.

1.       Do you have the necessary equipment and farm structures to go on with the project?

2.       Do you have the necessary knowledge to determine your input needs   to control purchases.

3.       Do you have room and plans  for expansion on your farm or are you able to lease more if need be?

4.       If you are leasing land, do you have the necessary agreement papers?

5.       Do you know where to look for reliable suppliers, and have you compared the prices? Qualities and credit terms of suppliers.?

6.       Do you have reliable and  skilled labor ready?

Farm records

•     Are you prepared? To maintain complete and clean  record of farm  inputs, outputs and farm practices.
•        Have you determined how much labor you will need Currently and in case of expansion..    
•     How do you plan to handle employees and payroll?
•      Do you know what financial reports should be prepared and how to prepare them?

Finance

A great number  of agricultural projects that fail each season. The main reason is insufficient funds. Many new farmers  will try to start the project without knowing the sufficient capital needed to derisk the business. This could be because of a lack of knowledge in this matter.

To avoid such trouble. You can  consult with an expert in agricultural finance or review your situation by analyzing the following three questions.

1.       How much liquid cash do you have in your possession?

2.       How much money will you need to start your Farm project.?

3.       How much money will you need to maintain the project?

To plan your survival and that of your project at the beginning it is important to protect your operating expenses every month The typical expenses for one month may include but are not restricted to.

Your living costs.

All input costs.

Farm service fees depending on the kind of project you are planning

Employee wages if you will  have employees.

Your own rent  if you’re renting Living space.

Agronomist Fee If you’re consulting with them.

Transportation.

Miscellaneous

Now use this to find your  total monthly expenses and multiply the answer by three. The answer you get is the amount of money you need to cover your operating expenses for the first three months, which are crucial for your project’s success.(although many short season agricultural projects will take about three months to harvesting )

 Make sure you have this money ready before you start your project. And make sure you use it only for the purposes listed. Because this money will keep your project alive.

By adding the total starting cost to the total three months expenses you can have an estimate of the cost to start up the project and operate for three months.

By subtracting the totals of the lists from the cash available to you. You can determine the amount of additional financing you may need. If any.

 If your project is annual Biannual or perennial. You will need to estimate your operating expenses for the first year after starting up.

 Here are some of the practices that might lead   financial setbacks to your young agricultural project so watch out !

1.       Excessive money taken from new business to cut off your living expenses.

2.       Too rapid expansions.

3.       Credit extended to customers.

4.       Starting without Financial planning.

If you have taken the time to look at all the questions and factors in this article in your context then it means you have seriously thought about your goal.

However, there still are some things you need to learn about agriculture since it is a rapidly evolving industry. You need to do research in any niche you find.

Don’t hesitate to seek advice from experts and people who can tell you what you need to know because it is worthwhile. This could be either online or offline.

With all these in mind, you can now get optimistic and cheer up for your next project.

Success!