Getting into a new business is a milestone as you have triumph the
problem deciding what line of business to engage in and kick starting
it. However, studies have shown that sustaining business to successfully
go through transition at different stages of growth have been more
daunting challenge than starting them.
Why most agribusiness
fail today is because of lack of foresight to implement change at the
appropriate time as the business runs. To be a successful agripreneur, you need to able to move your business from one stage to another, so as to create wealth and build up sustainably.
Generally planning, decision making, management, business performance
evaluation, self-discipline, customer service and retention strategy,
financing the business and handling of stress and pressure are
implicated in the actualization of success or not of a business. However
imperative causes of why most agribusiness fail and possible solutions
would be pointed out in this post:
Bad business idea
No business idea is actually bad in itself, but a particular business
idea can be circumstantially good for one while it is bad for another.
Nevertheless, business decisions should be based upon factors that
provide one with comparative advantage to engage in a particular
business and not the other.
Comparative advantage for a business could be in form of knowledge,
skill and availability of the necessary resources to start-up and grow
the business; which could all be evaluated by a business plan to
evaluate the technical and economic viability of a business idea than
starting up a business on the basis of how lucrative it seems elsewhere
or your passion which cause you affinity to a business as the business
would require more than and not only your passion to sustainably create
wealth for you.
Cash problem/fund problem
Predominant insufficient and at times total lack of fund for your
business can fail the business, and with a worsening situation with most
agribusiness as cash plans are required and advised to be made to cover
a full production cycle before start. Pitching the business with
confidence to investors, banks and people who can help to provide fund
adequately for the business can be a solution, but it is important to
understand that “small and available” funds could be judiciously
invested and grown into wealth.
Another dimension of cash being a problem for agribusiness is the
mismanagement of the cash flow of the business. Effectively managing
cash flow is important for any agripreneur by sacrificing enjoyment
until he/she reaches a comfortable stage before reaping the fruits of
the labour, as it is easy to get side tracked by things that seems to be
important but have little to do with achieving your original target for
your business. Self-discipline is solution to this, so as to achieve
success in business.
Professional management is key to successful agribusiness venture.
Inexperience and incompetence of management affects planning, decision
making, business performance evaluation which are important to sustain
and grow a business. Most agribusiness require high precision in
decision making to cope to the high risk and uncertainty nature of the
business. Hence, agribusiness management should be well equipped with
the technical, emotional and virtue to get the business started and
Moreso, while the business grow, competencies expected from the
management to sustain growth. Often the basic challenge is in transition
from owner to leader, having the right business leadership skills and
self-discipline growth comes with increase in employee size, income and
Challenges to maintain a narrow strategic focus.
Lack of customer focus
Customers are integral part of business. A business with all excellent
start-up requirement without customer consideration is bound to fail,
hence the customers are evaluated in terms of quantity and quality
during the business planning process to ensure the future of the
business. Setting business target for yourself and your employees who
should be focused on increasing the number of customer through improved
customer service is key to success for your business. Excellent customer
delivery is not an option because it breeds trust, reliability, love,
patience, fairness and edge in competition. If your immediate resources
are unable to manage a large client base, identify and focus on segment
for which the most value can be created in order to optimize your
returns. It has been proven time and again, that it is far cheaper to
retain an existing customer than it is to acquire a new one, however
watch out for customers with buying habits that are detrimental to the
success of the business.
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