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WHY MOST AGRIC BUSINESS FAIL


agricincome
  • Jan 2018
  • agric


  • image

    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.

    Managerial inexperience/incompetence

    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
    grow.

    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.

    www.agricincome.com





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