Testing new products or services for your agri-business
Learn how to investigate a new product or service idea before you introduce it within your agri-business.
According to the Canadian Federation of Agriculture, since the 2001 census nearly 20,000 Canadian farmers have been put out of work. Unfortunately, greater competition and increasing production costs make it difficult for many farmers to break even, let alone thrive.
The good news is, agriculture holds exciting possibilities for profitable side businesses that bring in extra revenue and spur sustained growth. Just be sure to do the proper research and develop a solid business plan before you invest in your innovative new idea.
These tips can help you take the right steps to diversify and expand your agri-business.
Perhaps you’re a dairy farmer who dreams of building an agri-tourism operation with on-site sales of ice cream, a gift shop and guided tours. Or maybe you’d like to share your sustainable farming practices with others through specialized training opportunities.
As you think more about your side business idea, don’t neglect to tap your best source of business intelligence: your customers.
Compile a list of contacts from your customer database. Then survey a sample group who can help you come up with an in-demand product or service, by answering a few key questions:
If you have a side business idea you’re excited to pursue – and your customers have offered enthusiastic feedback – the next step is to conduct market research.
This activity is important before you go any further because it allows you to identify any major competitors – who they are, what they offer, and at what price points. If it turns out your competitors already have your idea covered, don’t consider it a setback; with this knowledge, you can look for a promising business idea with little or no competition.
The sweet spot is an untapped niche with enough demand to turn a profit. If you’re the only one catering to a unique demographic – for instance, by specializing in artisan cheeses – you’ll attract hungry customers and earn more revenue.
As a final tip, before you purchase equipment, hire employees or start advertising your new business, do a test run.
For relatively little cost, you can set up a table at a trade show or participate in an event with a local business owner who targets the same customer. Offer a sample of your goods, a free farm tour or discount on a service. Feedback at this test stage will show you where you might need to fine tune your product offering or competitive position before you go to market.
Now you can take your winning idea, your market research and customer feedback to a lender for funding.
At Scotiabank, our advisors understand agri-business owners. We’re ready to help you – just as we’ve helped thousands of business owners like you to achieve their goals.
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.