UJASIRIAMALI

1. DAH 208:INTRODUCTION TO AGRIBUSINESS
Topic 1:The concept of agribusiness
• THE BUSINESS IN THE AGRICULTURE
INDUSTRY .

2. The concept of agribusiness
• collective business activities that are
performed from farm to consumer.
• Supply of agricultural inputs,
• The production and transformation of
agricultural products and
• Their distribution to final consumers

3. The concept of agribusiness
• Characterized by raw materials that are mostly
perishable, variable in quality and not regularly
available.
• The sector is subject to stringent regulatory
controls on consumer safety, product quality and
environmental protection.
• coordinated and better planned linkages between
agribusiness firms, farmers, retailers and others
in the supply and value chains are highly needed.

4. The concept of agribusiness
This broader concept of agribusiness covers.
• Agricultural production and propagation of
animal, animal products, plants, plant
products, forests, and forest products, fish and
fish products.
• The provision of services associated with
agricultural production and the manufacture
and distribution of supplies used in
agricultural production.

5. The concept of agribusiness
• The design, installation, repair, operation, and
servicing of machinery, equipment, and power
sources, and the construction of structures
used in agricultural production.
• Any activities related to the inspection,
processing, and marketing of agricultural
products and primary by-products.
• Any aspects of nursery, landscaping, parks and
other ornamental horticultural operations.

6. The concept of agribusiness
• The conservation, propagation, improvement,
and utilisation of renewable natural resources.
• The multiple uses of forestlands and
resources.

7. Why study agribusiness?
• Increased opportunity for economic growth
• Creates new areas of employment
• Opens chances for learning new skills

8. Agribusiness sub sector
The input-supply sub-sector
• Animal Feeds
• Seed, Fertiliser and Chemicals
• Electricity and Petroleum
• Farm machinery and equipment
• Livestock (breeder and feeder stock)
• Co-operatives

9. Agribusiness sub sector
• The farm production sector
• The hub of agribusiness, is the farm
production sector
• Dominated by many producers at different
scales of production and varying levels of
commercialisation.
• Involving production of different, related to
agriculture product.

10. Agribusiness sub sector
• The output sector
• Responsible for the transformation of the raw
farm produce into final consumer products
and conveying them to the retail level.
• Large corporate organisations are common in
the output sector
•

11. Agribusiness sub sector.
• Wholesale operations involve sales to
retailers, other wholesalers, industrial users,
and, to a lesser extent, the ultimate consumer.
• The retail food stores represent one of the
largest industrial segments in agribusiness. It
includes informal sector food vendors, cattle
dealers, butchery owners, retail shops, super
market chains etc.

12. Importance of agribusiness to the
economy(Tanzania)
• Source of employment
• Contribution to national income
• Expansion of non-traditional exports

13. Agribusiness linkages
• Beneficial intra-agribusiness linkages(agriculture
industrial concept)
• Inter relation of subsectors and their activities
• Technology development
• Need for productivity
• Need for export financing

14. Agribusiness linkages
• Beneficial linkages between agribusiness and other
sectors
• Tourism, which provides it with a market
• The energy sector that supplies it with
electricity and fuels to run farming and
processing operations.
• Agribusiness can generating a surplus that
could be invested and used to develop the
infrastructure.

15. Negative practices in agribusiness
• large input manufacturers and marketing firms
possess sufficient market power to influence the
prices at which they sell inputs and buy
commodities.
• Collusion among actors ,resulted to business
monopoly.
• This imbalance in market power between the
large and better resourced corporate and small
ones resulting into business conflict, hence needs
government intervention.

16. Negative practices in agribusiness
• The exploitative tendencies by crop
raiders/middlemen and export companies.
• Moral hazards by producers/farmers.

17. ASSIGNMENT-1
• List 5 firms and explain how their
related to agribusiness(10 marks)

18. TOPIC 2
• INTRODUCTION TO ENTREPRENEURSHIP
• LIST FIVE CHARACTERISTICS OF AN
ENTREPRENEUR (10 MARKS)

19. Important definitions.
• Entrepreneurship is the process of creating
something different with value by devoting
the necessary efforts, assuming the
accompanying risks and receiving rewards of
monetary and personal satisfaction.
• An Entrepreneur is a person who exploits
opportunities and utilizes resources to create
more value taking reasonable risks in the
process.

20. Important definitions
• An Entrepreneur is a person who exploits
opportunities and utilizes resources to create
more value taking reasonable risks in the process.
• Economists view entrepreneurs as those who
bring resources together to generate profit.
• Psychologists view them in behavioural terms as
being achievement oriented individuals, driven to
seek challenges and new accomplishments

21. Important definitions
• Innovation: The process of doing new things
or the transformation of creative ideas into
useful applications.
•

22. Characteristics of Entrepreneur
• Self-confident
• Self-reliant
• Creativity
• Achievement-oriented/goal directed
• Leadership
• Risk taker
• Committed
• Innovative,

23. Characteristics of Entrepreneur
• Flexible, versatile
• Energetic
• Initiators
• Positive thinkers
• focused
• curious
• outgoing
• pro-active

24. Business skills needed by
entrepreneurs
• Identifying opportunities
• Formulating ideas
• Clarify concept
• Goal setting
• Developing a business plan
• Obtaining technical assistance
• Selecting the type of ownership

25. Business skills needed by
entrepreneurs
• Planning the marketing strategy
• Locating the business
• Financing the business
• Dealing with legal issues
• Managing human resources
• Promoting the business
• Managing sales efforts
• Problem solving

26. Advantages of entrepreneurship
• Enormous personal financial gain
• Self-employment, offering more job
satisfaction and flexibility of the work force
• Employment for others, often in better jobs
• Development of more industries, especially in
rural areas or regions disadvantaged by
economic changes, for example due to
globalization effects

27. Business skills needed by
entrepreneurs
• Encouragement of the processing of local
materials into finished goods for domestic
consumption as well as for export
• Income generation and increased economic
growth
• Healthy competition thus encourages higher
quality products
• More goods and services available
• Development of new markets.

28. ASSIGNMENT-2
• INDIVIDUAL ASSIGNMENT(10 Marks)
• WRITE A BUSINESS IDEA CONCEPT NOTE
RELATED TO AGRIBUSINESS(maximum 5
pages)
DEADLINE FOR SUBMISSION-18/01/2014

29. TOPIC 3
• THE LEGAL ECONOMIC AND SOCIAL
DIMENSIONS OF AN ENTERPRISE

30. Forms of business
Many micro and small enterprises operating in our
society today have not formalized their
operations under any of these legal forms.
There are four significant legal forms of business:
i. Sole proprietorship
ii. Partnership
iii. Corporate
iv. Co-operate

31. Forms of business
• Which Business Form?
Depends on
• Personal preferences of the entrepreneur(s)
• Profile/size of the relevant enterprise
• Advantages/disadvantages associated with the
particular legal business form
• Funds required vis-à-vis funds available.
•

32. Forms of business
• The Sole Proprietorship
-One person and does not involve legal partners.
The person bears full accountability for the
business in terms of financing, compliance with
tax regulations, etc.
-This business carries unlimited liability in that the
entrepreneur is liable to the extent of her
personal assets.
-Technically, a sole proprietorship does not exist
without its owner.

33. Forms of business
Advantages
i. Relatively easy and low cost of starting up.
ii. All accrue to the owner
iii. The owner has direct control
iv. Possible tax savings
v. Freedom and simplicity of ending the
business
vi. Simplicity of administration

34. Forms of business
Disadvantages
• Unlimited liability of owners
• Limitations applicable to the raising of
capital/financing
• Lack of business continuity
• Limited opportunities for employees
•

35. Forms of business
Partnership
• A partnership exists where two or more
persons are co-owners in an enterprise. In
operating as partners the owners do not only
combine financial resources, but also their
talents, which are usually complementary.
They are also able to expand social and
professional contracts.
•

36. Forms of business
• Types of partnership
• The general or simple partnership
• The limited partnership
• A general partnership
one in which the co-owners share unlimited liability for
the business regardless of the percentage each has
invested. Each is also legally liable for the conduct of
the business, and cannot avoid any liabilities that are
created by any of the partners.

37. Forms of business
• A limited partnership, one or more of the
partners have limited liabilities, and also need
not be involved in the actual running of the
business.
•

38. Forms of business
• Advantages
i. Ease for formation
ii. Access to additional capital
iii. Broader management base
iv. Tax advantages
v. Employee incentives
vi.

39. Forms of business
• Disadvantages
i. Unlimited liability
ii. Shared authority
iii. Lack of continuity
iv. Capital limitation

40. Forms of business
• The Corporation or Registered Company
• The corporation is a business having a legal
identify of its own but whose ownership to a
maximum of twenty in the case of a private
corporation, and an unlimited number in the
case of the public corporation.

41. Forms of business
• The owners of a corporation are its shareholders
– meaning that they are the final owners of the
company’s assets, less debts and liabilities. A
corporation has its own legal identify separate
and apart from its shareholders. It can acquire
property, accumulate wealth, sell its assets, enter
into contracts with other entities or individuals,
make investments or engage in legal actions.
•

42. Forms of business
Advantages
i. Limited liabilities
ii. Wide and full access to equity capital
iii. Specialized management and broad networking
iv. Continuous existence
v. Transferability of ownership
vi. Less risk for creditors
vii. Autonomy in the establishment of legal entities
viii. Tax advantages

43. Forms of business
• Disadvantage
i. Dispersed ownership
ii. Operational flexibility
iii. Taxation
iv. Implication for secrecy

44. Forms of business
• The Co-operative Form of Business
• An enterprise or organization that is owned or
managed jointly by those who use its facilities or
services.
• An association or corporation established for the
purpose of providing services on a nonprofit basis to its
shareholders or members who own and control it.
• The nature and functions of cooperatives differ
considerably—such as purchasing cooperatives,
consumer cooperatives, and marketing cooperatives
•

45. Forms of business
Advantages
i. Tax and stamp duty concessions
ii. Wide social and professional networking
iii. Shared decision – making
iv. Safety mechanism against individual or special
interest group control
v. Attractiveness to grant aid funding institutions

46. Forms of business
Disadvantage
i. They are difficult to organize and register
ii. Suppression of independence
iii. Restriction of level of share ownership
iv. Restrictions of savings rate and dividends
payout
v. Limited credit prospects

47. Starting and Operating an Enterprise
critical economic and social requirements include:
i. Marketing
ii. Funding
iii. Personnel
iv. Inputs/Resources
v. Production/Processing
vi. Location
vii. The environment

48. Topic 4
• IDENTIFYING BUSINESS OPPORTUNITY

49. Identifying business opportunities
•when does an idea
become an
opportunity?

50. Identifying business opportunities
• Ideas and Opportunities
• an idea becomes an opportunity only when it has the potential to
be viable.
• Viability can be determined against several criteria, but some
general areas include:
•
• Marketing: Is there a substantial market for the product/service?
I.e. will people buy it?
• Production: Will you have the capacity and technology to produce
goods that will meet the requirements of the market and enable
you to make a profit?
• Financial: What returns will you get on your investment?

51. Identifying business opportunities
• Sources of Business Ideas
i. Awareness of trends and practices in your society
ii. Greater health and fitness
iii. Information Technology
iv. Increase in travelling and the exposure to other
cultures
v. Two income families
vi. Globalization
vii. Recognition of needs
viii. Problems
ix. Other cultures.

52. Identifying business opportunities
• Other sources
i. Friends, business associates, consultants etc
ii. Yellow pages and business publication
iii. Statistical, and other information bureau
iv.

53. Topic 5
•Business plan

54. Business plan
• A Business Plan is a document or blue print
that summarizes what the entrepreneur
hopes to achieve from being in business, and
how various resources will be organized to
meet these goals.
• It is a detailed analysis and description of all
aspects of business over a given time frame.

55. Business plan
• It is also a tool that serves for implementing the
business idea, monitoring the progress of the
business and outlining strategies that will ensure
that the business is able to cope with difficulties,
particularly those of the first few years.
• Generally it will include details of the nature of
the business, its structure, goals, objectives,
strategies, markets, star-up and operation costs,
financing required as well as returns on
investment.

56. Business plan
• The Importance of Preparing a Business Plan
• Having a plan means having a focus and a clear
direction of where you want the business to go
and how it will get there.
• It is map/framework to be followed by the
management
• Compensates for lack of experiences
• Compensates for lack of capital
• Reduces chances of failure and minimization of
risks

57. Business plan
• It serves as a communicating tool when
orienting personnels
• Preparing a Business Plan also helps to ensure
that needs are anticipated and planned for
before they actually arise.
• Internally, the plan also benefits you in terms
of being a tool that allows you to monitor the
progress of your business.

58. Business plan
• The business plan becomes a reference point for
implementing strategies that will counteract the
problem while steering the business towards its
goals.
• Externally, it can be used as a proposal for
accessing capital for start up, or expansion.
• It is on the basis of this plan that lending
agencies or investors decide if your business idea
is bankable or worth banking.

59. Business plan
The Business Planning Process
To facilitate the preparation of a useful and effective plan,
there are a number of preliminary steps, which need to
be taken. These include:
• IDENTIFICATION OF BUSINESS IDEAS BY
i. Copy from existing business e.g. daladala, shops,
grocery
ii. Modifying existing business eg. Coming up with a
mobile toilet, packed and blended safe vegetables
iii. New business e.g. caring sick/elders

60. Business plan
Validate the idea, assess the viability of the idea- not all ideas
are opportunists.
• Develop a market plan or the basis of knowledge from
market assessment
• Develop an operational plan for what you will produce or
market
• Prepare financial plan (sources and use of money)
• Show assumptions
• Show benefits
• Determine the long-term and short term goals of the
business

61. Business plan
• BUSINESS PLAN OUTLINE
– Cover page
– Executive summary
– Table of contents
– History/introduction of the business
– Definition of the business
– Market plan

62. Business plan
– Production plan
– Management plan
– Objective, goal and strategies
– Financial plan
-financing issues
-financial data-cost volume, profit analysis,income
projection,cash flow analysis and balance sheet

63. Cover page
• Should include appropriate descriptions.
– Business name
– Business address
– Business phone, fax, E-mail address
– Principals (owners of the business)
– Date

64. Executive summary
• This is what convinces someone that they
should read the remainder of the plan.
• It should be one or two double spaced typed
pages and contain the essence of the plan.
• Remember:
– for whom it is written,
– what is being requested of them, and
– why they should be interested in participating in
the venture or financing it.

65. Table of contents
• Be specific and complete in this area.
• Some readers may judge the completeness on
the basis of the plan.
BUSINESS DESCRIPTION
-History/ introduction
-Definition of the business
-Description of the products or services
-Location

66. (a) History/ Introduction
–If this is a start-up venture,
a brief explanation of how the idea
(company) came about, is in order at this
point.
– If this is an operating plan
the history section may have the major
highlights supplemented with additional
details, in a appendix.

67. (b) Definition of the business
• It is important that you be able to state
succinctly what the business is.
• This is distinct from what the business does (a
listing of functions, products, or services) and
is oriented to answering the question:
– WHAT NEED ARE WE MEETING.

68. (c)Description of products or service:
• The identified need and the identified market will
be accommodated by specific products or
services.
• The description(s) of the product or services
should fully explain to the reader why, given the
previously stated information, such products or
services will be demanded.
• You may append catalog sheets, pictures, etc.

69. (d) Location
• This section should explain location where the
business will be located, being its
production/processing facilities.

70. MARKETING PLAN:
• Having stated WHAT need you are fulfilling you can
now define WHO has that need.
• Your definition will indicate the target of your
marketing effort and will give both demographic and
psychographic characteristics.
• Your market penetration projection should be included
along with an analysis of the competition.
– Customers
– Competition
– Pricing
– Sales, advertising and Promotion
– Distribution

71. MANAGEMENT PLAN
• Having described the business, the market, and the
product, it is time to indicate who will make things
happen.
• A start-up or financing plan will require more detail
than will an operating plan.
• Resumes and other details of the personal
backgrounds of the principals should be left to an
appendix.
• This section should sell two things:
– That you have the right people and
– that they are properly qualified or experienced to
effectively manage the business.

72. OBJECTIVES, GOALS AND STRATEGIES
• What you intend to accomplish and how?
• This will include varying amounts of details based upon
the purpose of the plan, but it is important to focus
this section on the “crunch factors”.
• The detail should be placed in individual appendices.
• Items to be covered in this section include:
– Sales strategies
– Promotion strategies
– Financial strategies
– Management strategies
– Pricing strategies

73. FINANCIAL DATA
• A business plan is future oriented.
• Therefore, this section should focus on projections and pro-
formas
• Historical financial information necessary to understand the
plan should be referenced in an appendix.
• The items to be included are:
A. Cost-volume-profit analysis
B. Income projections – Pro-forma
– Monthly for the planning year
– Quarterly for the second year
– Annually for the third year

74. C. Cash flow analysis – Pro-forma
– Monthly for the planning year
– Quarterly for the second year
– Annually for the third year

75. APPENDICES
• These give supporting detail to the content
section as well as adding material of interest
not otherwise included.
• If there is proprietary information (patent,
research and development, formulas, market
research, etc) that you may wish to control it
would be well to place that information into
detachable appendices.

76. Next plan
-Setting test dates
- Presentation modalities.
- More assignments to come….

77. Assignment
• Now after Knowing what is included in the
business plan.
– Prepare a business plan for the idea you
submitted, if you wish to change the business idea
you will be required to contact the Mwl.
Concerned
– There would be some presentation of each
section which would be picked randomly, so it
better to be prepared in advance and own the
business idea.