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Business | Market: Agriculture

Building a successful business is not easy. Think of the probability of a new business being successful. According to a Harvard Business study, there is an 18% chance that an entrepreneur will meet success in his venture. Sometimes, I think, the reason for this is that the right questions are not being asked in the ideation process of building a business. I think some of the important questions that need to be asked includes,

  1. What problem does my venture solve?
  2. Is there a demand for this? Or can a demand be created for this?
  3. What is the size of this demand?

It's always good to plan all the way through while keeping an open mind to address any challenges that come while executing your plan. One of the reasons the Aloe Vera project in Edna's Garden did not go so well, was because of a lack of research. There was demand but the logistics to fund that demand was not financially sustainable. I would have been suffering a loss from transportation cost for an indefinite period. The deal was not good and there weren't much demand for raw Aloe Vera to be supplied in volumes over 100 lbs.

The diagram is a good visualization of how a Coffee business works from end-to-end starting from the farmer at Stage 1. The economic system for most food and natural products looks something similar to this.

Business canvas of a Coffee Business

As you can see the manufacturing (roasting) is the second most value-added stage of all the stages. What's a little obscure is the added cost by the retailer. What is seen in the diagram is the cost of the coffee and not the total cost paid by the retailer. So, the profit is not explicitly seen on the diagram. Could it be that the retailer profited the most in this Coffee business?

I've heard it said from a manufacturer that there is nothing (as in no profits to be had) in the farming business. I'm lead to believe him because sometimes farming can be the most difficult and least rewarding. So, where you place yourself in the supply chain of any business is vital to meeting your main goal. I think if a manufacturer can profit from a farm, then he should do it. But if he does not have to but can profit from someone else doing that hard work that is even better.

Knowing the eco-system and the supply chain of the business helps a lot. That's the reason this diagram stands out for me.

Linkages are vital in any business that supplies goods. So, when thinking of a farming business, the initial plan must involve the forward linkage to the buyer. In Jamaica, the tourist industry makes for a good forward linkage. There are indeed needs in the Jamaican tourism industry. For this reason the, ALEX system was created.

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