Exploring business models for agri-business enterprises
It can be extremely difficult for small-scale farmers in Canada to thrive on the traditional business model.
It can be extremely difficult for small-scale farmers in Canada to thrive on the traditional business model. High equipment costs and competition from large producers are just a few challenges faced by smaller agri-businesses trying to earn a sustainable income.
Fortunately, other income opportunities exist for agri-businesses willing to diversify. These alternate business models can introduce new revenue streams, differentiate your business from the competition and maximize your income potential.
The increasing demand for in-season local produce and the low cost of online sales has empowered farmers to reach customers further afield than the local farmer’s market.
Fresh City Farms is one example of a venture that relies entirely on an online sales model, offering a convenient shopping experience to customers across Toronto.
The growing business sells nearly 1,000 local and organic products including fresh herbs, fruit, vegetables, eggs, dairy, and baked goods, as well as pre-portioned recipe kits and catering services via their website. The business offers its busy, health-conscious customers something many of its larger competitors don’t – delivery right to their door.
Selling online[i] is a great way to augment your local market reach because you can tap into a much larger number of potential customers.
Many opportunities exist for agri-business owners to earn additional income by simply sharing knowledge about the work they do. For example, here are a few ways a farmer could benefit from demand for agricultural education:
There’s an opportunity to share your expertise for profit – here’s one example of that revenue model at work.
Another excellent way to earn more income – and at a very low-cost – is to invite the public to your farm for educational tours, seasonal family-friendly activities, unique dining experiences, farmers markets, festivals or events.
For example, at a price of $89 per person, big-city dwellers in the Greater Toronto Area may book a day trip to a lavender farm and an alpaca farm located in Prince Edward County in eastern Ontario. The fee includes round trip motor coach transportation from several pick-up locations around the city. Visitors receive a tour of both farms, a taste of lavender lemonade, some lavender cookies and complimentary bottled water and snacks on the bus.
As you consider new business models to increase income, look for niche opportunities that allow your new venture to stand apart. It’s also important to research demand and any competitors before investing in any idea.
At Scotiabank, our advisors understand agri-business owners. For over 180 years we've been providing financial services to Canadian farms and agri-businesses. You’ll find Agriculture Banking and Financing Experts at Scotiabank who can help you with everything from financing an equipment lease to farmland mortgages, and more.
Get more business advice, access helpful resources and learn about available financing solutions by speaking with a Scotiabank Small Business Advisor today.
(Disclaimer: The advice provided in this article is for informational purposes only. You know your business best – so be sure to implement what works for you and contact professional advisors as necessary to make sure you following applicable laws and regulations.)
[i] Be sure to investigate and comply with applicable laws and regulations as they apply to communications with existing or potential customers and make sure your business isn’t prevented from selling products online.
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