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 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.
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