Three ways to increase your agri-business revenue

Boost your income by exploring these strategies for Canadian agri-businesses.

Coming up with new techniques to bring in more sales dollars to your agri-business may seem challenging because you’ve likely experienced success so far by following your own revenue strategies. But a little fresh thinking may be just what you need to amplify earnings.

Consider these strategies to help increase revenue for your agri-business.

1. Increase sales to existing customers

Any business with an operating history might first look at its existing customers for additional revenue opportunities. It’s simply far less expensive to sell more to an existing customer than it is to find a new customer.

Your customers already know and trust your operation, so they are likely more receptive to:

  • Buy more. If a customer buys a certain quantity of product from your business, create a purchase volume incentive for them to buy a bit more.
  • Buy more often. A customer spending $1000 each quarter is preferable to a customer spending the same amount annually. Look for ways to increase purchase frequency if it works for your customer – for example, if you sell farm equipment, offer incentives to customers to upgrade every 3 years instead of every 5 years. But only if it makes good sense for your customers to do so.
  • Buy something else. Cross-sell your customers on a related product or service. In addition to selling fresh apples to its restaurant customers, a local orchard might offer apple cider as well.

Your existing customers would likely rather buy from you than go through the process of screening an unknown vendor. Use every customer interaction to talk about the other things you can do for them.

2. Sell locally

Producers may be able to command a better price by selling to local markets.

Local businesses and consumers often value food grown or raised within the local area.  It allows your agri-business to access the “buy local” trend where people are willing to pay premium prices for quality food produced by local farms.

Most people want to support a local farm and feel good about the food they are eating. Local restaurants and shops can gain competitive advantage by promoting the fact their food comes from a local supplier.

Selling to local market can reduce your costs, too. Transportation costs may decrease when a farmer selling produce or meat to local grocery stores and markets doesn't have to drive very far.  Payroll costs can also decrease as well when your drivers travel less distance to make deliveries.

3. Upgrade equipment

Improving output capabilities can increase revenue when your business can accommodate larger orders or demands for shorter processing times.

For example, purchasing more efficient farm equipment – such as tractors or harvesters –can help to reduce equipment costs over a period of time when that newer equipment carries a lower operating cost than current gear.

  • Purchasing capital assets that contribute to income may also allow a farmer to recoup these expenditures over a number of years through depreciation, or capital cost allowance. See the Canada Revenue Agency website for more information.

See your banker

Every agri-business is different, so it’s important to consult with your advisors before pursuing any changes to your revenue strategy. The right advisor for you will have experience specific to agri-businesses and can share some industry best practices and provide valuable insight on your plans. Scotiabank[1]  has provided financial services to Canadian farms and agri-businesses for over 180 years.

Next steps

  • Talk with your colleagues about their marketing strategies to bring in more revenue. You might just find an idea that will apply to your business.
  • Speak with your Scotiabank Small Business Advisor about revenue strategies for agri-businesses. Ask about financial services and products to support cash flow, equipment purchase or lease, and expansion plans.

[1]”Scotiabank” is a trade name used by The Bank of Nova Scotia.