eMKambo Vibes – 24 April 2017
Key elements of market - informed agribusiness Models Like all businesses, agribusinesses should be built around a product/service and a niche market. Ideally, more products and services spawn more business models with some models eventually becoming separate business units. When that happens, it becomes easy to assess the viability of each business model. Contrary to some beliefs, in a business model, money is just like salt. Without meat or vegetables, salt is useless. The salt owner should be interested in those with meat, potatoes, tomatoes and other products. On the other hand, while some commodities need salt, some consumers don’t need much salt.
Confusing a business plan with a business model Most agribusinesses lack models. They confuse a business plan with a business model yet a plan assists in executing a model. A model is an attempt to turn your innovation into profit or economic value. The following pillars help to characterize a business model without over-simplifying the complexity in agricultural value chains 1. The owner -who will provide the product or service. 2. Value proposition – What need or solution do you want to address? Have you addressed a need? Absence of a value proposition is the main reason why we end up with copycats who just watch what another person is doing and try to imitate rather than focusing on the customer. A need is a value proposition. What loans are needed from the customer’s perspective? To what extent is a reasonable interest rate a solution to farmers? What if loan amount is the real need? What if the main issue is unfavorable conditions that insist on collateral not in line with the agribusiness? 1