If there is one business area where you can be assure of success, then the area certainly lies within the agri-business circles. Unfortunately, success is assured almost as much as failure is, if one does not take note of obvious pitfalls and avoid them. That explains why raising capital for agribusiness ventures is not an easy thing. You must brace yourself for disappointments if you cannot prove to your prospective capitalists that your venture will take off well and break even on time. To avoid such disappointments, consider arm yourself with the following tips.
Understand the risks involved
You know what they say about risks in business. The greater the risk, the sweeter the reward. This is of course true. But then again, no venture capitalist would want to put his or her money where there are no calculated risks. That is why agri-insurance plans come in. Crops fail, disasters ruin farm, crop pest outbreaks occur. How will you deal with these unexpected setbacks if and when they ever occur? Simply have an insurance plan as part of your proposal then assure your prospective venture capitalists that they have nothing to lose should any of the said setbacks derail your project.
Know the market
Take time to research if there is a market for the farm produce that you will reap. There may be a market yes, but what are the market dynamics? Are the buyers consistent with buying prices? These and more questions will help you know if you can break even on time and go on with the project for long. You may also have to learn more about your competitors and come up with smart ways to outdo them. Of course this will take time, effort and hard work. But you shouldn’t be discouraged. That is what business is all about.
The cost of running the project
You will have to buy the latest farm implements, consider labor and of course invest in seeds and fertilizer. These are just but some of the costs you will have to consider before you can roll out your project. You prospective venture capitalist will want to know about these and more. How else will he be able to calculate Return on investment?
Talk to your competitors
Get to know more about the business. The best way to do this is by hearing it from the horse’s mouth. That is why you must set aside time to know what to expect when your project is underway. The other farmers will help you with not just new skills but also with tips on how to overcome different agri-business challenges. You may for instance think you know everything about the weather pattern and conditions required to grow your crop. But a visit to the nearby farm may reveal subtle details that may never have crossed your mind. It could be something as subtle as choosing fertilizer for your lawn. Whatever the case, be willing to learn. Think of that trip to the nearby farm as a lesson outside the classroom – a practical lesson to speak. Once out of it, you will be able to convince venture capitalists that your project will work.