Agribusiness venture and

preparing a business plan

Sathyendra Kumar. A.D.

1st M.B.A.(Agri-Business)

Institute of development studies.

University of Mysore..

Content

Introduction

Venture

Agri-business venture

Agribusiness ventures: How to start right

What is business plan

Why Business Plan Essentials

Benefits of having a business plan

Disadvantages of Business Plan

SWOT ANALYSIS

Step-by-step approach in drafting a agribusiness plan

Things to be considered when embarking on a livestock business

Things to be considered when embarking on horticulture oragronomic business.

Things to be considered when embarking on a livestock business

Where do I get the information to prepare my businessplan?

Business Overview

Marketing Plan

Human Resources Plan

Production Plan

Financial Plan

Reasons for business failures

Reference

Introduction

Future outcomes are a function of today’s decisions.

A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals.

Business plans may also target changes in perception and branding by the customer, client, taxpayer, or larger community.

Business plans may be internally or externally focused.

In agricultural businesses, planning may be even more vital because of the inherent uncertainty associated with agriculture

Production.

venture an undertaking involving uncertainty as to the

outcome, especially a risky or dangerous one: a mountain-climbing venture.

a business enterprise or speculation in which something is risked in the hope of profit; a commercial or other specula.

the money, ship, cargo, merchandise, or the like, on which risk is taken in a business enterprise or speculation.

Obsolete . hazard or risk.

Agri-business venture

It is a one of agri-business activity or starting the one of the agri related business in the risky manner and ensures the profit.

Ex: bee-keeping, poultry forming, preparing vermicompost and sell it etc,….

Agribusiness ventures: How to start right

Start your business before you retire.

Practice integrated farming system.

Consider your environment.

Get product knowledge.

Interest.

Know your market or create your market.

Budget money for publicity.

Create multiple streams of income.

Make friends with professionals.

Envisage business downturns or challenges.

Business Plans…

….Need to be employed by

anyone who is in business

…Set a strategy for future

growth and can be used to

attract investors and loans

What is business plan

A business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities.

A business plan is a document/plan of how a business owner, manager or entrepreneur intends to organise an entrepreneurial endeavour and implement activities necessary and sufficient for the venture to succeed.

It is an essential tool for planning, direction and running a business. It clarifies the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be realised.

Why Business Plan Essentials:

Getting an integrated view of your business.

Informing partners.

Determining financial needs and applying for funds.

Approval from board of directors/shareholders.

Recruiting.

Deriving objectives for employees.

Informing employees.

Informing lenders.

Mutual understanding within the management team.

Benefits of having a business plan.

Helping you to clarify your vision and deciding whether or not to forge ahead with the idea.

Determining if your product and/or service has a sufficient market to support it and whether or not it will be profitable.

Providing an estimate of your start-up costs and how much you'll need to invest or finance.

Convincing investors and lenders to fund your business.

Defining your target market (who your customers are or will be) and how to best reach them through strategic marketing actions or expanding market coverage or reach.

Setting a value on a business for sale or for legal purposes.

Defining corporate objectives and programs to achieve those objectives.

Disadvantages of Business Plan.

Not Involving the Right People.

Spending Too Much Time on Non-Essentials.

Lack of Accountability and Poor Implementation.

It can be a costly process because you will need the assistance of your accountant or financial adviser.

In order to obtain capital to fund the business, a lengthy detailed business plan must be put together.

All of the details of starting the business, including licenses, marketing, naming the business, finding product sources, etc. are the responsibility of the owner.

SWOT ANALYSIS Strengths are attributes of a person or of your business that can

contribute in you achieving your objectives.

Weaknesses are attributes of a person or of your business that can lead to you not achieving your objectives.

Opportunities are external conditions that will contribute to your achievement of your objectives.

Threats are external conditions that can lead to not achieving your objectives.

Strengths and Weaknesses are factors internal to your business and

Opportunities and Threats are factors, outside or externally, of your business.

Step-by-step approach in drafting a agri-business plan

1. Secure the identified land – proof of ownership or lease agreement.

2. Get a farm map or geographical map of the farm that includes farm boundaries and or watering points.

3. Identify potential markets and requirements for entrance into the market.

4. Identify resources available for utilisation to develop potential commodity.

5. Take into consideration your ability, knowledge and access to support before deciding on the commodity to be farmed with.

6. Calculate viability and economic feasibility on potential commodity and possible opportunities for value adding.

7. If favourable, go forward, and if not, repeat steps 3 – 6

8. Source information on the different forms of businesses.

9. Decide on what business form will be the best for the situation.

10. If the business form needs to be registered proceed with the process.

Things to be considered when embarking on horticulture oragronomic business. Soil and water need to be analysed for quality, and

determine the strength of the water source for quantity.

Consider all risks.

Source information on the weather conditions for the area.

Source information on the chemicals and fertilisers that would be required for the specific commodity to be produced.

Identify potential strategic partners like suppliers and potential mentors.

Identify rotational crops, if any.

Formulate a crop production plan/crop rotation plan.

Things to be considered when embarking on a livestock business

Consider all risks.

Source information on all regulations, especially if the business is close to a town.

Do a veld assessment/natural resource assessment.

Seek technical advice on the number of animals that can be placed on the available land for grazing.

Do a fodder flow and establish the gaps, and identify possible gap fillers.

Establish the optimal production system that would best suite a marketing strategy.

Once relevant information is obtained, then you can start drafting the business plan.

Where do I get the information to prepare my businessplan? Interviews With Other Producers.

Extension Specialists.

Personal Work Experience.

Industry Consultants.

Library Research.

Trade Suppliers.

Trade Magazines and Journals.

Demographic Studies.

Industry Associations.

Newspaper Articles, etc.

Business Overview

Title Page.

Table of Contents.

Business Profile and Summary.

Business Organization:

• Proprietorship.

• Partnership.

• Limited Company.

• Co-operative.

Marketing Plan

Preparing a Marketing Plan:

Where are we now? Where do we want to go? How do we get there?

What Products or Services do you Intend to Sell?

Who are Your Existing and Potential Customers and What are Their Profiles?

Who is Your Competition and What are They up to?

How will new Technology Affect Your Future Business Operations?

Continue…….,

How will Changes in Legislation and Other Circumstances Beyond Your Control Affect Your Future Business Operations?

How will you Advertise Your Products and get the Message to Your Customers?

How will you Monitor the Results of Your Marketing Plan?

Set Your Marketing and Business Goals. Be Specific as to Achievable Time Frames.

Define the Problems and Opportunities Facing Your Business.

List the Actions you will Take to Achieve Your Goals and the Expected results?

Human Resources Plan

1. Organizational Chart.

2. Labour Requirements.

3. Job Descriptions.

4. Training.

5. Compensation and Benefits.

6. Labour Management and Control.

7. Employer Responsibility.

Production Plan

What resources do you need to produce your products?

Land ▸ Buildings ▸ Equipment.

Materials ▸ Supplies.

Site Layout ▸ Construction Plans ▸ Timetables.

Production Process.

Construction Schedules.

Environmental Assessment.

Zoning ▸ Political Influences ▸ Regulations.

Transportation.

Financial Plan

1) Overhead and Cropping Budget.

2) Income Statement.

3) Projected Balance Sheet and Net Worth Statement.

4) Capital Purchases.

5) Loan Summary.

6) Projected Cash Flow Summary (Next 3 Years).

7) Financial Performance and Risk Assessment.

8) Long Range Plan (next 5, 10 or more years).

Reasons for business failures1.Management reasons:

A poor management team with insufficient experience and/or the wrong skills mix for the needs of the business.

A narrow customer base and inadequate marketing skills.

Inadequate marketing planning.

Under or overpricing products and/or services offered by the business.

Overtrading and running short of working capital.

Poor product and service quality.

Owner/managers who are autocratic, inflexible and make strategic decisions based on emotion.

A weak business concept, in that the product/market mix is not clearly defined and developed.

A failure to identify and manage risks.

Continue…….,

2.Financial factors:

Businesses without proper record/account of the financial transaction of the business.

Insufficient information on financial performance required for basic decision making.

Financial information based on incomplete or inferior technologies.

Insufficient supporting evidence on financial track record to obtain additional funds/loans.

Poor management of accounts payable and receivable.

Poor forecasting and management of sales and cash flow.

Insufficient working capital to fund its operations.

The business has borrowed too much money in relation to the owner’s investment in the business (high debt/equity ratio).

Continue…….,

3.Other factors:

No access to loan finance.

No access to developed markets.

No access to managerial support.

No access to capacity development programmes.

Weather conditions.

Conclusions

Every agribusiness venture is included there own rick so you have choose good venture and start.

Before you can prepare a agribusiness plan you consult knowledgeable person.

Systematic approach to problem solving can be of great benefit.

Steps are similar to the seven steps of the scientific method. Recognize the problem.

Determine your alternatives.

Gather information.

Evaluate the alternatives.

Select a workable solution.

Carry out your solutions.

Evaluate your results.

Reference….

www.tutor2u.net

www.retai.about.com

Preparing an agribusiness plan pdf

Business plan guidelines pdf

Agribusiness plan pdf

Presented to : Dr. H. M. Chandrashekar Assistant Professor in Agri-Business ManagementInstitute Of Development Studies.

Agri-Business venture and preparing business plan.