As a consultant and business coach, I get this question a lot from clients, “how do I transition into commercial farming?”
There has been a drive to commercialise farming and basically treat farming as a business that it is and not a mere hobby. Through that, most farmers keen on real growth are looking at the aspects of business that enable profitable and sustainable farming.
It is of utmost importance that you first understand your production and operational farming costs and income. Before you invest in any farming projects you must have done a financial analysis of both the income and costs of farming, which will ultimately guide your decision on whether you have the capacity to do more or rather make some major adjustments to the current situation.
Additionally, below are key principles that you may need to consider before the transition.
Financial analysis, of income, costs, and expenses related to your current farming operation.
Research and education: make sure to invest a lot of time in researching the specific type of farming you want to pursue commercially. You may attend trainings, workshops, seminars, and programmes that teach farmers about the best practices, regulatory requirements, and market trends.
Always start small: You must consider starting with a small-scale operation before scaling up to a commercial level. As Bishop Desmond Tutu once said, “There is only one way to eat an elephant: a bite at a time.” This approach will allow you to gain the necessary experience while testing different approaches and perhaps fail forward, and also minimise financial risk in the long run.
Develop a business plan: Once you have done the necessary research and understood your farming operation’s current financial position, you may now develop a detailed business plan stating your goals, production methods, marketing strategies, target market, and financial projections.
A well-detailed business plan will serve as a roadmap and framework for your transition into commercial farming. Sometimes in consulting, we develop a business model canvas, which is a shorter version of the business plan and gets you to the point faster before developing the long business plan.
Assess the market demand: This may be done as part of the business plan. Conduct market research to determine buyers for your products and understand their preferences and requirements, this is sometimes done again and again as you continue understanding your business better. It’s important to find value-added opportunities that can differentiate your products from those of competitors and consequently command higher prices.
Ensure to build networks and partnerships: It is necessary to create relationships with all your stakeholders as highlighted in the business plan or business model canvas; the suppliers, agronomists, distributors, agricultural organisations or cooperatives, and any other industry professionals whom you may need for your farming venture.
Transitioning into commercial farming is a process that requires complete dedication, hard work, and meticulous planning, however, with the right approach and investments, it may be a rewarding and profitable venture in the end.
More tips to be continued in the next column.
*Mekupi Kambatuku is a Managing Consultant at Simpli Business Advisory. She can be reached at admin@simpliadvisory.com.