Starting a business is a big deal. A business means committing years of your life to a single idea. For a passionate entrepreneur, the right idea can mean money, success and fame. The wrong idea will lead to failure, tears and gnashing of teeth. So, how do you choose the right business idea?
Africa’s agribusiness is a trillion-dollar opportunity. But to take advantage of the opportunity, you have to pick the right business idea. How do you choose a single idea that will lead to success?
Last week we looked at spotting trends to identify business opportunities. Trends are signs that point you in the right direction when you choose an idea for your business. But it is entirely possible to start a business that is on trend but doesn’t work out. So, what do successful on-trend companies that have in common?
The answer is simple: They solve a problem.
And the bigger the problem, the bigger the opportunity. Current global issues like the Corona virus and the climate crises have brought with it many new problems to solve. For a smart agripreneur that means many new business opportunities.
Four problem-solving questions you need to ask before you start your new venture
1. Is your business solving an essential problem?
Writing for Entrepreneur.com, Thomas Oppong says, “Focus on building a must have not a nice to have product. … To grab your customer’s attention, start by solving their needs, wants rarely make the cut.”
The corona virus has highlighted how important this is. When it comes to investing in businesses right now, CNBC’s Jim Cramer says “What you’re looking for, I would say, are companies that … have the ability to survive no matter what because there’s demand for their products.”
Focussing on essential problems is key. What problems are everyone complaining about? The agrifood space has plenty. Every single country in Africa has unique problems. Tanzania needs to improve water quality. Stable electricity plagues South African agribusinesses. And Nigeria has fake seeds on the market.
In the Daily Nation, Kenyan Journalist, Julius Sigei writes, “Wrong use of fertiliser, prolonged drought due to climate change, and failure by the government to promote irrigation, as well as poor marketing policies that benefit brokers at the expense of farmers, have made Kenya a net importer of maize.”
If you can find an innovative, cheap solution to these problems, you have a winning agrifood business.
2. Is your business doing something better?
When you do something better, you are solving the problem of inefficiency.
Consider this example. You and your neighbour have the same size farm and you grow the same apples. For pest-control, he uses an airplane and 1500 litres of universal pesticide to spray his trees. His crop is safe, but he also poisons many bees on his farm leading to lower pollination rates.
You, on the other hand, use an Aerobotics drone to map your fields to find pests and sick trees. Knowing exactly where your problems are, you can use a precision crop-spraying drone and 10 litres of bee-friendly pesticide to cover your affected trees.
By keeping your pollinating bees safe you now have more apples. You also spend less on pesticides and a drone is far cheaper than putting a plane in the air. And that means more profits.
Agrifood businesses that solve efficiency problems will be big business a hyper-precision farming takes off in the next decade.
3. Can you solve an African problem to build a global solution?
Writing for the World Economic Forum, Rapelang Rabana, Founder and Chairperson of Rekindle Learning says, “Many of the challenges we see in Africa were solved long ago in countries with much higher gross national incomes (GNI) before the advent of digital technology. Typically, they were solved using analogue solutions, and even if things weren’t perfect, they worked well enough for everyone to forget the flaws.”
She believes that these problems are more noticeable in Africa. That means it makes sense for entrepreneurs to find solutions and build it into a business. With more advanced, and exponentially scalable, digital technologies available, African entrepreneurs can come up with fresh, high-tech solutions.
These can then be exported to those high-GNI countries to solve their analogue inefficiencies, too. Rapelang explores Dataprophet, Aerobotics and IoT.nxt as three African companies that have done exactly that, and her article is worth the read.
4. Can your business solve a problem faster?
“Is there a need in the marketplace? Is the space full of slow-moving companies unwilling to change? Then maybe you have an opportunity. If not, you might be wasting money and time,” says James Paine, Founder of West Realty Advisors on Inc.com.
If you are geared to solve a problem faster than a competitor, you might just claim your place. One of the biggest problems facing businesses right now is the corona virus. It is impacting how many businesses function.
Restaurants, bars and factories have closed their doors across the planet. And global agriculture will certainly also be affected. As COVID-19 spreads into Africa, the same will likely happen here.
But people still need food, even if they are isolated. If you have a restaurant, a fresh produce shop, or even a farm, and you can make quick decisions, you can become a preferred provider by solving this problem.
What could this look like?
Tell all your customers about the hygiene procedures you are following to keep your food clean and your staff and customers safe. Make sure clients see your staff with masks and gloves so you can build trust. Put up a big sign to say you are doing deliveries. Give people a number they can call, as well as an email and a WhatsApp line to place orders. Guarantee that your deliveries are hygienic. Don’t give deliveries directly to customers. Place it at their door and stand back. Take electronic payments as far as possible.
By the time slow-moving companies close their doors for social distancing, you can have a thriving, new door-to-door, delivery business for your grocery store. But only if you can solve the problem faster.
Can you solve a big problem and turn it into a business? Well, start building your business. The GoGettaz Agripreneur Prize Competition 2020 is launching soon, and we want to hear from you.