Business tips: Importance and Scope of Agricultural Startups

Agriculture is the largest sector of our Indian economy. It plays an essential role in the country's GDP. It is the most profitable sector. So, starting agriculture is an advantage as it comes with a thriving business environment. Many new students opt for starting an agricultural sector or technologies in agriculture. It is because this sector is consistent and will always stay consistent as food is the most important thing a person needs.

Agriculture startups are not easy to start. They face many challenges like lack of financing, inadequate irrigation, farm size, inefficient supply chain, middlemen and agents in the business, and productivity issues. So, a business plan is essential to overcome these challenges. Let us take a look at why agricultural startups are important.

Importance and scope of agricultural Startups:

1. Production efficiency

The production efficiency in India is enormous as compared to other countries. It is one of the major reasons why people start an agricultural business. You can measure the efficiency from several factors, such as determining the number of people associated with products, the outcome of these products, and an average total of supplies by farm workers, etc.

2. Source of Livelihood

Agriculture startups provide a source of livelihood to many people. Around 70% of the Indian population is dependent on agricultural production. So, startups offer various technological advancements into the agriculture field to increase productivity.

3. Public and Private Agri services

The public and private sectors provide agricultural-related services to new startups known as Agri services. They help new businesses and startups to perform efficiently. New startups need funding, financial stability, and resources. So, these sectors help them to grow.

4. GDP Growth

The agricultural startups add to the GDP growth of our country. Agricultural sectors are flourishing every day, and many new entrepreneurs contribute to the country's GDP and enhance the country's food quality and experience.

How to start an agriculture startup?

Many people don’t know how to start a small business in the agriculture field. Here is a step-by-step guide on starting an agriculture business:

1. Business Plan

The most important step is to create a business plan for your business. Business plans determine the type of business, size of the agriculture business, requirements, market strategies, competition, fertilisers, pesticides, location of the agriculture business, and potential target customers for the business. Selecting the proper location of your business is essential as it defines your customers and their requirements.

A business plan helps to derive the future requirements of a business. It also allows entrepreneurs to pre-strategise and understand the market situations clearly. It helps them to alter their decisions as per the market requirements.

2. Market Research and Competitors

It is essential that you study market situations and have knowledge of your competitors. You can study your competitors' strategies to know what people prefer and how you can maximise the customer experience. Agriculture sectors have many variants that you can produce. You can find the potential market that best suits your abilities and skills. If you choose the right business variant, you can make it profitable and expand in the future.

3. Machinery and Equipment

After selecting the business location, size, and components, the next step is to select the right machinery and equipment for your business. Make a list of all the required tools and machines, analyse their usage and make a budget. It is essential to make a budget for your machinery and expenditure. It would allow you to focus on the important tools for the business. You also need to invest money in fertilisers, pesticides, and other organic seeds for your business.

You can also research the new technological advancements to help in your business. New technological tools are far more effective than outdated machinery and equipment. So, find the right technology for your business. Some machines might be expensive, but they can reduce your time spent. So, research properly and find the best match for your business.

4. Licenses and Permits

The next step is to get your business licensed and avail of the permits. Licensing is an important part of the business. It is illegal to start a business without licenses and permits.  An agriculture business requires many licenses. You can apply for different types of licenses online. The licenses required for an agriculture business include company registration, AGMARK, food-based permits, trademarks for your business, and other food-related licenses. Other than that, you will also need farming land permits for ownership or lease agreements, etc., to start your business.

5. Financial Plan

The next step is to manage your finances and make a financial plan for your business. It is essential to contain your business costs and manage the finances for the growth of the business. If you increase your market share, but the business costs are high, you won't have any surplus money for your business activities. A financial plan can be made through financial statements, like income statements, cash flow analysis, break-even analysis, balance sheet, profit and loss accounts, and ratio analysis of your business. You can create a financial model to forecast the business's profits, revenues, and expenses.

6. Marketing and Promotion

Marketing plays an essential role for every startup or business. You can market with the help of social media platforms. The power of social media is not unknown. You can use the power of your followers and fanbase to advertise your business. It will help you gain valuable insights into their thinking, behaviours, trends, and ideas. You can use the information to improve the quality of the product and to reach your potential target market. It will help you gain customers for your business.

Conclusion

We can say that starting an agriculture startup is a complex task. It requires various steps like creating a business plan, managing finances, marketing and promotion, machinery and equipment requirements, and market research. So, if you are thinking about starting your agriculture startup, then follow the above-mentioned steps for a better understanding.

Also read:

1) Should Agricultural Income be Taxed in India?
2) Best Tips To Get Started With Farming And Agriculture
3) What are Some Beneficial Government Policies for Small Home-Based Businesses in India?
4) How To Start An Organic Farm Business In India?
5) OkCredit: Simple, Paperless & Secure solution for businesses

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FAQs

Q. What are the components of Agribusiness?

Ans. Agribusiness has three basic components, and they are as follows:

• Agrichemicals
• Breeding
• Machinery and Equipment

Q. What are the main categories of agriculture business for investment?

Ans. There are various categories that you can invest in the agricultural business. These categories include the following:

• Productive Resources – Productive resources include fertilisers, irrigational tools and machinery, seeds, pesticides, equipment, energy source, feed, etc.
• Agricultural Commodities – Agricultural commodities include raw material and processed product
• Animal Husbandry and Fishing Business
• Other services like insurance, loan, credit, packaging, and marketing.

Q. Are Agriculture startups profitable?

Ans. Businesses don’t earn profits initially. It takes time to establish a business. However, agriculture businesses can earn good profits if you make a proper market business plan and execute it systematically. It can help you with sales and business growth.