Chapter-5 planning and organizing an agribusiness

It discussed here what are the different techniques ni agri business.

1. Chapter 5 PLANNING AND ORGANIZING AN AGRIBUSINESS

2. Introduction Part of the American dream is that everyone who wants to should be able to own their own business and be their own boss. It is still possible for a person to start with very little capital and build a successful business, but it is a very difficult process and is becoming more difficult each year. Even though most agribusiness students will never own their own businesses, it is important to understand the basic processes involved in business planning and organizing.

3. Importance of Small Businesses In business and economic terminology, most agribusinesses are small businesses. There is no single definition of small business, but the U.S. Small Business Administration (SBA) defines it as a business that is independently operated, is not dominant in its field, and meets certain size standards in terms of number of employees and annual receipts.

4. Small Businesses Are Not Really Small When it comes to jobs, small businesses are not small in the number of people they employ. Ninety percent of the nation's new jobs in the private sector are in small businesses. Entrepreneur in Agribusiness —Is It for Me? The American economy is based on the free enterprise system, or capitalism. This simply means that we have the right to own our own business and to make a profit. It also means that we can lose money, perhaps even all the money that was in-vested

5. General Characteristics of Entrepreneurs Entrepreneurs are people who have the initial vision, diligence, and persistence to follow through. An entrepreneur is a person who accepts all the risks pertaining to forming and operating a small business. This also entails performing all business functions associated with a product or service, fulfilling social responsibilities, and meeting legal requirements.

6. Personal Characteristics of Entrepreneurs Every person is different and unique. This includes entrepreneurs. However, entrepreneurs generally have common qualities that set them apart. * Independent *Self-Confident *Energetic *Organized *Visionary

7. *Persistent *Optimistic *Committed *Problem Solver *Self-Nurturing

8. *Risk Taker *Action-Oriented *Has a Sense of Urgency *Flexible *Emotionally Stable

9. Challenges of Entrepreneurship Being successful is not easy. You do not simply start a business and enjoy the profits. Three major challenges must be addressed by entrepreneurs.

10. Total Responsibility A beginning entrepreneur is in charge of every-thing. The success or failure of the agribusiness depends on just one person: the owner.

11. Long, Irregular Hours Being your own boss requires much work. People who start their own businesses work more hours than those who work for someone else. It is not uncommon for an entrepreneur to work more than 60 hours per week.

12. Financial Risks The most serious disadvantage of a small business is the need for money. Obviously, it takes money.

13. Entrepreneur The entrepreneur is the person who organizes a business or trade or improves an idea. Entrepreneurship is the process of planning and organizing a small business venture. It is the entrepreneur who visualizes the business strategy and is willing to take the risk of getting the business started.

14. Why Agribusinesses Fail? Agribusinesses fail for many reasons. Usually, failure is due to factors in the areas of management, labor, or financial resources. Many people go into business or expand without adequate planning, and without analyzing the added costs associated with the additional returns or the potential risk.

15. Management People do not plan to fail; they only fail to plan. Labor The strength of a business is in its people. Financial Resources Management of financial resources is not merely an exercise to set raised out at the beginning and end of every year.

16. Undercapitalization Undercapitalization is an important factor in small business failure. Analyzing Your Agribusiness Venture Most people would like to become wealthy by starting a business that proves to be successful. Recognizing a Need A business succeeds only when it fills an economic need, and it is the responsibility of the prospective business organizer to determine what types of businesses are needed.

17. Agribusiness Startup Factors to Consider What Financial Resources Are Needed to Get Started? When entering any field of agribusiness, the entrepreneur should determine all startup costs. What Labor Does the Agribusiness Need?

18. What Management Requirements Exist? Does a Market Exist for the Product or Service? Where Should the Agribusiness Be Located? Should You Buy an Agribusiness or Start a New One?

19. Preparing a Business Plan It's amazing how many people are eager to start an agribusiness yet have only a vague idea of what they want to do. Eventually, they come up with an idea for their agribusiness and begin discussing the idea with friends. It is at this stage that the entrepreneur needs a business plan.

20. Business Plan Outline Introduction Company Description Product and/or Service Management Plan Marketing Plan Legal Plan Location Analysis Business Regulations

21. Business Regulations Capital Required Financial Plan Financing Arrangements Competition Operating Plan Appendix

22. Cover Sheet The cover sheet acts as the title page of your business plan. Introduction The introduction could also be referred to as the executive summary or statement of purpose. It sets out the business plan objectives. Table of Contents The contents page lists the major topics in your business plan. The Organizational Plan This section includes two major areas: a summary description of your agribusiness and a more detailed description of the administrative parts of the company.

23.   Products or Services . If you are a manufacturer or wholesale distributor of a product, describe your products and briefly outline your manufacturing process. Intellectual Property. Address issues concerning copyrights, trademarks, and parents. Location. Describe your projected or current location, including advantages and disadvantages. Legal Structure. Describe the legal structure of your company and why it is advantageous.

24. Management. List the people who are or will be running the business. Accounting. What system will you set up for daily accounting? Who will you use as a tax accountant? Legal. Who will you retain as an attorney? Insurance. What kinds of insurance will you carry? Security. Address inventory control and theft of information, both online and offline, and project-related costs.

25. The Marketing Plan The marketing plan sets out all the elements and components of your marketing strategy. It should include the details of your market analysis, sales, advertising, and public relations campaigns.

26. Overview and Goals of Your Marketing Strategy Show who your potential customers are and what kind of competition your business will face. Outline your marketing strategy and specify what makes the company unique. Market Analysis. Implementation of Marketing Strategies. Customer Service. Assessment of Marketing Effectiveness.

27. Financial Documents Summary of Financial Needs Loan Fund Dispersal Statement Pro Forma Cash Flow Statement (Budget). Three-Year Income Projection. Break-Even Analysis. Appendix (Supporting Documents)

28. Major Areas of Agribusiness Management Agribusiness management refers to the responsibility of a person to make decisions, organize resources to implement decisions, monitor the implementation of decisions, and evaluate the effects of decisions on the overall success of the operation. Planning Planning means determining what is to be done and where, how, and when to do it. Planning is done on a day-to-day, year-to-year, and long-term basis. Organizing Organizing is the grouping together of activities, people, and other resources to implement a plan.

29. Directing (Leading) Directing or leading consists of providing instruction and guidance to employees. Staffing Staffing includes all activities involved in the recruitment, selection, training, and retention of personnel. Controlling Controlling covers all the activities that are necessary to ensure that the policies of the agribusiness are being carried out. Goal Setting As stated earlier in this chapter, people do not plan to fail-they simply fail to plan.

30. Setting Your Agribusiness Goals There are some general rules that can help you set goals for yourself. Write Down Your Goals. The best way to start thinking about the goals of your agribusiness is by writing them down. Organize Your Goals. You will have both specific goals that you want to reach in a few days, weeks, or months and goals toward which you will work for many years. Reaching Your Goals. It is futile to set goals if they do not drive your actions.

31. Problem Solving and Decision-making When starting and organizing an agribusiness, the owner will have a number of decisions to make and problems to solve. How well the owner handles these issues will greatly affect the success of the business. Decision-making is the term that describes the process used to choose the new and different action. Decision-making may involve setting new goals to solve a problem. In extreme cases, when a problem cannot be readily solved, the decision may actually be to do nothing at all.

32. Various Styles of Decision-making Reflexive Decision-making. People with this style make decisions quickly. They typically do not spend a great deal of time considering all the different options and consequences of each action. Reflective Decision-making. People with this style consider all the options and consequences before making a decision. Consistent Decision-making. People with this style consider all the options and still make decisions in a timely manner.

33. Conclusion Remember that you will encounter obstacles as you pursue your goals. Some of these obstacles can be foreseen. If you are prepared for the foreseen problems, you will have more time and energy to deal with the unexpected ones.  Summary Even though most agribusiness students will never own their own business, it is important to understand the basic processes involved in planning and organizing a business. As we enter the world of agribusiness, we must decide whether to work for ourselves or work for someone else.