Odipo: Before you think about profits, consider these 3 P’s first
By Gerphas Odipo
Many young people get into farming with but one thing in mind, profits.
To some degree this was our mentality a time like this last year. The wisdom we extracted from this erroneous mentality was: the key to a successful business is your foundation. If your foundation is weak so will be your venture, money is the worst of foundation.
The most important aspects of a successful farming venture (and any business for that matter) are pegged on the following three components as we later discovered:
When it comes to people, trust but verify.
Sir Richard Branson advises business owners to take care of their employers and they will take care of the customers, not the other way round.
He, like many other successful entrepreneurs, believes that the people you are working with will either make or break your business.
At Judera, we had a solid team and very hardworking crew. We had a competent farm manager who ran a tight ship. The mistake we made is that we entrusted the farm manager too much.
As a result, he fell into the hypnosis of money and realized he can make extra on the side without our knowledge. By the time we had discovered his deception, we counted a little under Ksh1 million in losses.
Our farm manager had started pocketing salaries and other funds being entrusted to him.
We were, and are not, ‘telephone farmers’; we made it to the farm at minimum twice a week. So how did we run into such losses?
We believed in word of mouth –not paper. Call it being naïve, but the ‘verbal accountability’ system we had put into place seemed to work well first two quarters of 2015. But when our farm manager noticed this loophole, he used it to embezzle us.
Lesson learned? Trust your people, but always verify.
This involves proper record keeping and accountability. We are in the digital age and keeping records easier compared to 30 years ago because so many free tolls are t your disposal.
You must have at least basic knowledge of excel and how to maneuver spread sheets. Take it from us, proper record keeping will save you more money than you can imagine.
Your hands must get dirty and your process must be at your fingertips
If you don’t want to be a ‘one shot wonder’ in agribusiness, you must set up a working process that captures every section of your business.
Even if you have a competent staff, you must know exactly when, where and how everything is done.
This will enable you seal the loopholes that we overlooked – since you are aware of and monitoring every stage of your process, you can stop the bleeding early.
This is why ‘telephone farming’ is discouraged – you cannot know the process if you are not on the ground.
Be ready to get dirty, literally, move in between your crops and name them if you have to. Proper labeling and tagging of your crops will assist you know what is being done at what point.
Paddock your land and we would discourage planting everything simultaneously even if it’s the same crop. Segmenting your farm will make it easier to observe growth and monitor progress faster.
Make sure your process has a flow; this goes as far as how you store your farm equipment and chemicals. Make sure they are all in a particular order and not just all over.
Create an inventory system for your store, and always make sure all the‘t’s are crossed.
Even if you have a process, do not take anything on face value as we did. Our process was broken at many stages and created a lot of gaps that facilitated embezzlement.
Do not wait to have a similar experience; the wise learn from the foolishness of others and not theirs.
Our people started being affected by the broken process and that, without a doubt, started affecting the third most important element of a thriving business –product
Good people+ a working process = lucrative product
One thing you should never compromise on is the quality of your product. Many young farmers seem to be keener on the quantity.
We discovered that it is extremely challenging to focus on both simultaneously. But if we were to make a bet on which of the two would bring lasting success, we would put our money on quality.
With the right concentration on your farm, you can easily produce on an acre more than another would on 5 acres. The quality of your output is pegged on how your people are treated on the farm and how flawless your process is.
It is actually foolish to imagine that the quality of your product will be first class if the people you pay to produce it are being treated third class and your process that is forth class.
People are the spine of a business, you might treat your people well, but is your farm manager following that example?
In our case, he was not and at the end of the day we had hurt dissatisfied employees who had one foot ready to jump onto the next job opportunity. They ended up being unmotivated and were unable to give their best.
The process was broken as it was not meticulous. The records were not up to date and the inventory process was wanting. Our product was not the best it could be simply because the people and the process were flawed.
As a result, our capital kept going in and very little was coming out. Our muscle to operate the farm shrunk from comfortably handling 65 acres to simply managing 5.
The farm manager, if you are wondering, took to his heels. His matter is now a police case.
The process has been streamlined meticulously and the people are happier.
We started the New Year at ground zero, but we are building with renewed energy.
We hope that you learn from our pocket-denting esperice: focus on people, processes, and product. If these are working well, the profits will follow automatically.
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