It is an established fact that agriculture is the most sustainable source of income for individuals and a promising source of revenue for any nation. It gladdens me to see how agriculture is warmly welcome across all tribes and culture; the most feasible means of eradicating poverty is to eradicate hunger. However, we need money raising ideas to foster food production.
This solution is very simple to achieve but quite difficult to think out. This is why I have decided to write about money raising ideas for any farm business as capital has been highlighted to be the most limiting factor in a farm business.
Not only a farm business, but any business that wants to survive will surely need money to scale up the written plans. Running a business without capital is quite frustrating; I can so much relate. It makes an agile business plan crippled. There are several money-raising ideas successful entrepreneurs have used and are still very relevant to date.
However, farmers are obnoxious of these ideas or let me say, they are skeptical about the feasibility of these ideas when related to their farm business or they know the ideas but do not know how to optimize them. This article is an eye-opener and a key to raising money for farm business successfully.
Having read materials about these ideas and my interactions with successful entrepreneurs that have used these ideas for the success of their business, I found these money raising ideas very feasible for any farm business or agribusiness. Be conscious as you read these ideas and sketch out plans on how to implement them. The money raising ideas are:
- Support from family and friends
- Raising money through Seed investors
- Raising money through Venture capitalist
These are the money-raising ideas you need to raise money for any farm business, they have worked for businesses in various sectors;
why is agriculture now different?
Let us now analyze these money raising ideas and see how they can be transformed into money for your agribusiness.
How to optimize these money raising ideas
1. Raising money through family and friends
This is a traditional way of raising money for any business; it is one of the easiest ways of raising money for any business, but most entrepreneurs do not know what to do with this money.
Family and friends are your first group of investors; you get money from them by the virtue of the mutual relationship you share with them. They love you and trust your potential; hence, raising money from them seems very simple and fast. It is good for the business.
However, what do you do with the money you raise from family and friends?
This is where most farmers or entrepreneurs get it wrong. Money raised from family and friends cannot sustain a business; instead, used the money to sort out the most perfect ideas for your proposed farm business.
You see, it is suicidal to follow up fresh ideas as they flow through your mind. The idea that comes to your mind on any farm business is always in the raw form that needs to be mined and refined before it becomes tangible and fit for the market. The process of mining and refining comes at a cost; this cost should be cleared using money raised from family and friends.
Funds raised from family and friends should be used to make researches about that farm business you are eyeing, use it to meet the bigwigs of the business to ask questions and clear all your doubts about that business. This form of fundraising is used to determine and develop the business model. A business model is what you need before developing a business plan; it is the foundation you build the pillars of your business plan on.
2. Raising money from Seed investors
The money you get from friends and family has given you the insights of the business, therefore you have the idea of what you want to produce, how you want to produce and your potential market. The next stage is to determine the feasibility of this model before turning it to a plan or template you use for your business. This is where seed investors come in.
Who is a Seed investor?
Seed investor is an individual, maybe a professional who spends all their time investing and helping various businesses grow.
The term seed refers to start-ups in their earlier stage, more than just an idea but not yet a fully developed business. The money you raise through seed investors is meant for experimentation. You need to test that business model you have chosen to ascertain the answers you got in the process of refining the business ideas.
You use the money to start little, tweak the business as much as you can to find the best fit for the business. Use it to activate markets and other potentials that circumvent the business; from this process, you can determine your profit and loss margin, likely problems and best solutions, etc.; now you have a physical product, a reality of your ideas.
In summary, use the money to build your financial template for the business. This is when you can now develop a feasible and actionable business plan.
3. Raising money through venture capitalist
Venture capital is the dream of every aspiring farmer, this is the capital you need to run the business within a specified period. It is not the type of money you use for experiment or feasibility study. It is meant to finance a farm enterprise or a product.
Venture capital mostly comes from firms or professionals that specialize in financing promising enterprise ready to grow rapidly and make a profit. A venture capitalist needs to see a physical product, chickens in your farm or plots of sown crops, and persuasive evidence that the farm business has a great way to make a lot of money and grow rapidly. This is technically in form of a feasibility study report or business plan. One of the easy ways of getting venture capital is through the TEF or angel investors.
An angel investor is an individual who often has another full-time occupation but loves to invest in startups. You use venture capital to run your farm business, purchase variable and fixed cost and expand your business. Other sources of getting venture capital are borrowing money from banks and crowdfunding through sites like Kickstarter or IndieGoGo.
As a rule of thumb, friends and family invest in you and your ideas, seed investors invest in your process of experimentation to develop a great business plan while venture capitalists invest in great business plans and products to help them grow fast and become more profitable. These are the money-raising ideas you need to raise money for any farm business; misinterpretation or poor utilization of these fund-raising ideas often leads to failure in any farm business.
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