6 Tips for Growing Your Agricultural Business in 2019
There are many reasons why you may want to expand or grow your agricultural business, even though the competition this year is more active than ever before. Not every business knows exactly what the best steps to take are when expanding in the agricultural market, and this can lead them into making costly errors. In this article, we have come up with a list of tips that are all worth considering. Which will be best for you will depend on your current business model, how efficiently your business is currently operating, and the opportunities currently available in your area.
It’s a well-known fact that businesses that specialize in just one or two products or services are those that tend to be able to charge higher prices. Consumers automatically see specialized businesses as those with a higher level of expertise or higher quality products, so it’s definitely something worth considering. In addition, if you stick to just one or two things, you can improve the efficiency of your business, and reduce costs at the same time. The lower your outgoings are, the more you’ll be able to remain competitive in the market, which is something that is incredibly important for agricultural businesses.
2. Consider Private Label Manufacturing
Of course, not every agricultural business is going to be able to specialize, and this especially applies to large companies that rely on their diverse offerings in the community. One tip for businesses in this area is to consider launching their own line of products through a process known as private label manufacturing. What this essentially means is hiring a company to manufacture products on your behalf and then selling them with your own branding.
If you like this idea but you’re struggling to a reliable and affordable private label manufacturer in this sector, you may want to check out the agrochemical suppliers AmegA Sciences USA to help you with this. AmegA Sciences can help to manufacture wetting agent chemicals, turf pigments, lake dyes and soil surfactants. They’re also one of the best specialty fertilizer suppliers in the United States and ship internationally. The company has a long history of private label manufacturing and so are well suited to help your business stand apart from the rest with its own line of branded goods.
If you have the funds available, scaling your business could be a good option. The best way to increase your profits is to reinvest them into your process through scaling. If you run a farm, for example, you could increase the number of acres you have to plant more crops, or if you run a more retail focused agricultural business, you could expand your warehouse facilities, or open up shop in more locations. It’s worth noting, however, that this is only recommended if your current business is operating at peak efficiency and has more orders than it can currently handle from your current premises. If you expand without needing to, your costs will increase, which could lead to you losing money in the long term; not what you want.
You may think that networking is something that only office-based businesses perform; however, it can be incredibly beneficial for those in the agricultural industry as well. In fact, networking can enable a small company to look like a large operation when done correctly. You can look into machinery shipping arrangements and buying groups, and also look into the ways that you can share operators and other personnel across farms. When working alongside the other businesses in your area, you will be able to make a bigger impact in the local area; much bigger than you could manage on your own.
5. Downsize & Optimize
It may seem counterproductive, but if you currently have a farm or business premises that is far too large for what you need it for, it could benefit your business to downsize. Not only will this save you money (and even net you some money in the short term), but it can also help your business to work more efficiently, which can, over time, help to increase your profits. It’s definitely worth surveying your current situation and determining whether you really need all the land and space you have available. We heavily recommend reaching out to IT-service providers to see how they can help digitize and optimize your processes from a technological angle. In 2019, more and more bespoke tech solutions are being developed and used by the most successful agro companies to vastly improve their output and margins. adopting up-to-date techniques and tools has been proven to increase efficiency (and therefore decrease the physical space needed for the equal or better results).
Finally, one last thing that is worth considering are the ways you can integrate your production and processing. For example, you could look into producing turkeys, finishing hogs, or producing eggs under contract. These services can all ensure a reliable income, but they do have a certain amount of risk attached to them, which is definitely something you’ll want to consider when working out your net returns. That said, some agricultural businesses and farms find that moving into these specific areas could provide the boost they need and add an additional form of income to their roster. Instead of effectively guessing what your business can integrate or scale, make sure you track as much data about your current model as possible. It is always better to let your customers and market indicate to you what to specialize in, based on the data provided about their engagement with certain products or services you provide.
Working in the agricultural industry isn’t as easy as many believe, and it can be much harder to scale up, or grow your business than it is in other industries. That being said, the high barrier to entry and the continued overall growth of the agricultural market means you will find more opportunities here than elsewhere, providing you make sure to consider every option available to you carefully.
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