5 Common Characteristics of a Successful Agribusiness
What makes a successful agribusiness different from an ordinary agribusiness?
While there is no simple answer to this question (and indeed people’s definition of successful varies), some characteristics are common to successful businesses.
From the Apples and Googles of the world, through to the profitable and ever-expanding beef or horticulture operation up the road – some common characteristics set these businesses apart.
What are some common characteristics of a successful business?
1. They understand their ‘Why’
Simon Sinek (his ‘Start with the Why’ presentation [view here] is the third most popular TED presentation of all time) stresses that too many businesses focus on ‘What’ they do and ‘How’ they do it – not Why they do it.
Any business can tell you what they do (“I sell the best tasting apples”) and how they do it (“finished on grain for 90 days”). A progressive or unique business gets clear on Why they are doing what they are doing (“our customers deserve to eat the same wholesome, clean food our parents enjoyed”). This establishes the unique story around the business, and becomes the talking point with customers, and the basis of your marketing. As Sinek said “People don’t buy what you do. They buy why you do it”.
2. They practice a Customer-Centric Approach
Customers need a reason to choose you over everyone else in the marketplace. Then they need a reason to keep coming back, and more importantly they need a good reason to talk to others about you. This is relevant regardless if you sell direct to consumer, to an intermediary (such as a processor), to a retailer and so on.
A Customer-Centric Approach means starting with the customer every time, to understand their wants, needs, drivers and particularly their problems. This will help you work out the most suitable product or service offering for the marketplace, as they will be tailored directly to your customers’ needs. (ABDI also recently ran a webinar on “Characteristics of a Unique AgriBusiness“, which provides more information on the Customer-Centric Approach).
And remember, it may not necessarily be only about the product or service. Often it’s the intangibles they value, including customer service or the story behind the product. In particular, the customer and supplier relationship is often the most important element.
3. Everyone in the business understands, and owns the business Vision
Any great business is generally made great by its people and the culture that surrounds the people, characterised by commitment, ownership, and innovation.
All business owners or managers must be absolutely clear on the Vision for the business (i.e. where is the business going, what are its objectives), and they must own that Vision. Even more importantly, they must communicate it relentlessly and empower others in the business to also own it, then implement it.
Having a unified team working to a common goal will always be more effective than taking a fragmented, piece meal approach. Read here for more tips on managing your team members.
4. Consistency and Reliability
Think of the last time you bought work wear for the paddock or clothes for the office/social events. It’s likely you went straight back to a brand you’ve used before, knowing it is good quality and fits you/feels good/looks good. And there is a good chance it wasn’t the cheapest item on the rack either.
That’s the power of providing a consistent, reliable, high quality product or service. Don’t cut corners where it matters, and invest in long term relationships, because customers will just keep coming back, and will stick with you, even during tough times.
5. Don’t try to be all things to all people
This may in fact be the most important lesson you can learn being in business. Too many business owners’ attention is diluted by constantly looking at all the other opportunities and ways to generate cash flow. They often get distracted by ‘looking over the fence’ at what their competitors or neighbours are doing and then chasing the next big opportunity.
When you have “one foot in and one foot out” and your focus is dissipated, you’ll find it harder to gain traction. You’ll generally be spread too thin, never making the impact you should. This inevitably leads to people getting burnt out, stressed, and then progress stagnates.
A better strategy is described via the saying “the riches are in the niches”. Rather than trying to be all things to all people (i.e. trying to create a product that appeals to everyone), it’s much easier and often more profitable to sharpen your focus, and deliver really well on something you know can have an impact on the marketplace. The idea is to sell to the ‘true believers’, rather than trying to convince the ‘non-believers’.
Find your niche marketplace, or get clear on your unique offering in a wider marketplace (such as a commodity marketplace), and focus on maximising your impact in that segment.
This requires a laser-sharp focus, without being distracted by the next ‘pot of gold’. By focussing your efforts, refining your offering by listening to your customer and then building relationships, there is potential to develop a much higher value offering, for a discerning customer who is actually willing to pay for it. Ultimately, this could develop into longer-term customer relationships, with return business that meets everyone’s needs.
Looking to take your business to the next level?
Creating a successful and profitable agribusiness is much easier with the support of others who have been there before. Often previous roadblocks can be overcome just by taking a fresh perspective and looking at things differently.
If you believe your business could benefit from interaction with other like-minded agribusiness owners/managers and industry business specialists, our Advisory team can assist. Book in for a free 30 minute phone call to discuss your business needs with one of our advisors today!