Agriculture and Entrepreneurship: Creating a Way Forward

AGRIPRENEURSHIP: A PATH TO THE FUTURE Agriculture and Entrepreneurship: Creating a Way Forward Presenter: Keegan Kautzky. Director of Global Programs and Partnerships, The World Food Prize Foundation Transcript [TEXT: Young African Leaders Initiative, Online Training Series] [TEXT: Keegan Kautzky, Director of Global Programs and Partnership, World Food Prize Foundation] My name is Keegan Kautzky. I’m the director of global education programs at the World Food Prize Foundation, which is often referred to as the “Nobel Prize for Food and Agriculture.” [TEXT: Agripreneurship, A Path to the Future: Agriculture and Entrepreneurship, Creating a Way Forward] Welcome to Agripreneurship: A Path to the Future. This lesson is “Agriculture and Entrepreneurship: Creating a Way Forward.” In this lesson, we will review what we mean when we talk about agriculture and the importance of a strong agricultural sector. We’ll talk about food security and its benefits to society. We will look at the key challenges in agriculture. And we’ll explore the role that young professionals can play in advancing the agricultural economy. I grew up on a diversified family farm in Iowa, a predominantly rural agricultural state in the midwest United States. On our farm, we grew corn and soybeans and raised purebred cattle, pigs and chickens. Throughout college and graduate school, I studied rural sociology and political science, development economics and public health, but always with a focus on food security, agricultural systems, rural livelihoods and youth empowerment. I worked in Malawi with women farmers on agroforestry and other sustainable agriculture practices.I spent five years working with rural families in South Africa, Mozambique and Botswana to better understand ways to improve their food security. Now, at the World Food Prize, I have the opportunity to work with over 10,000 young leaders around the world every year to help them solve the world’s greatest challenges through agriculture, innovation and entrepreneurship. What is agriculture and why does it matter? Agriculture is the art and science of cultivating the soil, growing crops and raising livestock, processing and preparing plant and animal products and then getting them to market. Agriculture is essential to life. It provides the food that nourishes our bodies; the feed and fodder for our animals; the fiber that clothes, houses and protects us; the fuel that heats our homes, cooks our food and powers our industry; and the products that build our communities and grow our economy. Agriculture is far more than farming. It’s business. It’s science. It’s engineering. It’s energy. It’s information. It’s health care. It’s technology. Agriculture is the driver of the African economy today. According to the African Development Bank, it is the leading employer and the primary source of income for most African families. The last 50 years have been the greatest period of agricultural innovation, food production and hunger reduction in all of human history. And many of the most critical innovations and advances have come from Africa. African scientists have developed crops to boost vitamin intake and prevent blindness in children. Public and private partnerships have been forged to provide mobile, digital access to rural farmers, enabling them new opportunities to access farm inputs, credit, banking and markets. Advances in the agricultural economy have been at the heart of that success, and in the last 20 years alone, they have helped cut extreme poverty in half, reduce child mortality by 50 percent, and save the lives of over 120 million children. Agricultural development has helped over 200 million people lift themselves out of poverty. It’s helped increase household incomes, improve nutrition, and increase access to education, better housing, improved sanitation and health care. In Africa alone, it has helped increase life expectancy by more than 10 years since 2000. Society cannot advance without food security and a strong agricultural sector. But it isn’t about looking at the past. In the next 50 years, the innovators and the entrepreneurs who will change the world will do it through agriculture. It’ll be an engineer who develops an affordable way to desalinize ocean water and help 2 billion people access safe, clean drinking water; an entomologist who finds a way to stop malaria and saves 300 million lives; a plant breeder who develops disease-resistant, drought-tolerant and more nutritious crops who will help end malnutrition once and for all; a veterinarian who prevents the spread of avian influenza and saves the lives of tens of millions of chickens, ducks and geese; a geneticist who shows us how to produce meat in a petri dish and grow lifesaving medicines in the food we eat every day; or a data programmer who uses artificial intelligence to advance the field of precision agriculture and develop drones to plant our fields, water our crops, weed our gardens, and harvest our food safely and sustainably. What is food security and how does it benefit society? Food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life. The three essentials are quality (safe, healthy and nutritious food that meets our physical needs and cultural preferences), quantity (every person has enough at all times to lead a healthy and active lifestyle), and availability to afford and access the food where you live. In sub-Saharan Africa, food insecurity affects over 27 percent of the population. That’s almost four times any other region of the world. It leads to illness, stunted growth and learning disabilities and results in the deaths of approximately 3 million children each year. As Norman Borlaug, the father of the Green Revolution, said, “Food is a moral right of all who are born on this earth.” What are the key challenges facing those in agriculture? People are living longer, healthier lives. Fewer mothers are dying in childbirth, and fewer children are dying before the age of 5 from preventable illnesses. They have better access to nutrition, to clean water, sanitation and health care, and, as a result, our global population is expected to keep growing until it reaches equilibrium at around 10 billion and then begins to decline. This growth in the world’s population is a significant challenge, as it’s expected to increase demand for food by nearly 60 percent. In other words, we will need to produce and distribute as much food in the next 30 years as we have produced in the last 10,000 years combined. And we’ll have to do it in a way that is not just sustainable, but also efficient and fair. But it isn’t just about increasing production. We already produce almost twice what our population needs. Food insecurity is primarily a problem of distribution and access. By reducing post-harvest loss and waste, we would increase the global food supply by over 30 percent, and improvements in gender equality and legal and economic opportunities for women could reduce food insecurity by approximately 15 percent, meeting much of that increased demand. The most common institutional barriers facing individuals engaged in agriculture today include a lack of access to capital and financing, land ownership, education and technical training, improved technologies and better practices, and insurance against loss, among others. In Africa, these systemic challenges are often compounded by several other factors, including water scarcity; climate volatility; rapid urbanization and migration; evolving plant and animal diseases; transitions in the human disease burden; soil erosion; discriminatory legal, political, economic and social barriers for women and girls; and a lack of reliable energy sources. As the Sustainable Development Goals envision, a strong agricultural sector will produce “a country that is free from hunger, malnutrition and extreme poverty, where thriving local economies generate increased income for all people; where people consume balanced and nutritious diets, and children grow up healthy, able to reach their full potential; where resilient households and communities face fewer and less severe shocks, have less vulnerability to the shocks they do face, and are helping to accelerate inclusive, sustainable economic growth.” Farming is a business. And every farmer is a CEO, a scientist, a manager, a market analyst, a transportation logistics specialist, an engineer, a data officer, a human resource manager, a bookkeeper and accountant, a sales representative. And at the same time, they are often also the skilled laborer who repairs and operates the equipment; feeds and cares for the livestock; plants, harvests and processes the crops; and oversees the day-to-day operations of their household. Whether they are managing operations on a hundred thousand hectares or on a half a hectare of land, the real-world experience and professional skills they are developing are incredibly valuable and critical to a country’s prosperous future. How can young professionals play an active role in advancing the agricultural economy? Today, more than 60 percent of the population in sub-Saharan Africa is under the age of 25, and Africa’s youth population is expected to double by 2050. Unfortunately, job creation is unable to keep pace with the rapid rise in the African workforce, and there are almost 8 million more young people entering the labor market each year than there are available job opportunities. As a result, less than one-quarter of young people entering the job market will find paid formal-sector employment. To succeed in this challenging environment, young professionals will have to be entrepreneurial and be able to identify new business opportunities. You’ll need to understand the challenges facing your country as you seek to innovate and invent, to develop a new product, to provide a service, to develop a niche market, to adopt a new technology, to add value to the supply chain, and to create your own job. With global demand for agricultural and food products on the rise as a result of population growth, urbanization, income growth, an expanding middle class and changing diets, there are incredible opportunities all across the food supply chain to find where you fit.

London

London

London is the capital of England.

Paris

Paris is the capital of France.

Tokyo

Tokyo is the capital of Japan.

Poultry in Nigeria Today

The poultry sub-sector is the most commercialized of all of Nigeria’s agricultural sub-sectors.

The livestock sector is vital to the socio-economic development of Nigeria. It contributes about 9-10% of agricultural GDP (FAO, 2006). Moreover, Nigeria’s chicken population is about 150.682 million (UNDP, 2006) of which 25% are commercially farmed, 15% semi-commercially, and 60% in backyards. Consequently, livestock represents an important source of high quality animal protein, providing about 36.5 per cent of the total protein intake of Nigerians. It is one of the highest investments in agriculture with net worth of N250 billion[1].

Poultry production in Nigeria can be classified into extensive and intensive systems based on scale, stock and the extensive production system presently account for about 85%.

Importance of poultry production

Poultry are raised for their meat and eggs, and are an important source of edible animal protein. Poultry meat accounts for 30% of global meat consumption. The worldwide average per capita consumption of poultry meat has nearly quadrupled since the 1960s (11 kg in 2003 compared with 3 kg in 1963)[2]

Meat: The meat is rich in proteins and is a good source of phosphorus and other minerals, and of B-complex vitamins. Poultry meat contains less fat than most cuts of beef and pork. Poultry liver is especially rich in vitamin A. It has a higher proportion of unsaturated fatty acids than saturated fatty acids. This fatty acid ratio suggests that poultry may be a more healthful alternative to red meat.[3]

Eggs: Chicken eggs are widely used in many types of dishes, both sweet and savory, including many baked goods. In 2009, an estimated 62.1 million metric tons of eggs were produced worldwide from a total laying flock of approximately 6.4 billion hens[4]

FACTORS TO CONSIDER IN SETTING UP A POULTRY ENTERPRISE

Site selection: Availability of utilities is high on the list of factors to consider during site selection availability of Electricity, water, accessible road etc.

 Much more important is bio security of the environment; Biosecurity will prevent flock exposure to disease-causing organisms. It includes background check of the environment of the site, disinfecting the area to reduce the microbial, the site history to ascertain if it previously used for poultry purpose etc.

Choosing the poultry breed:

 All over the world, more than 300 breeds of the domestic chicken species (Gallus domesticus) exist. There are basically three types of chicken. They are:

1. Layers: Layers are reared for egg production

2. Broiler: Broilers are reared for meat production and are ready for market from 8 weeks.

3. Cockerel: This is also reared for meat production. Cockerels grow slower and can take up to twenty four weeks before they are matured for marketing. Cockerels are reliable in terms of survival and withstanding bad weathers. They are more resilient, and can absorb shocks far better than Layers and Broilers.

A number of factors are considered when choosing the type of breed to embark on. These are: price, consumer’s preference for the product, Market situation etc.

                                                                              

Housing

Poultry housing should provide optimum condition for growth and egg production, by protecting the flock from wind, rain and temperature extremes. Based on the kind of housing, there are three forms of farming. These are:

·         Extensive farming:

·         Intensive farming:

·         Semi-intensive farming.

The basic requirements for poultry housing are: space; ventilation; light; and protection (from weather and predators).

Large-scale commercial farm: uses structures with litter on the floor for meat birds or cages for laying hens. For controlled-environment housing of layers, multi-tier cage systems are common. Most large-scale commercial farms use controlled-environment systems to provide the ideal thermal environment for the birds. Birds’ performance in controlled-environment sheds is generally superior to that in naturally ventilated houses, as the conditions can be maintained in the birds’ thermal comfort zone. Achieving the ideal environment for birds depends on appropriate management of the poultry house.

The kind of bird reared to a large extent determine the kind of housing requirement, for example layers are better suited to battery cage system to reduce breakage of the eggs.

[5]Space: (density of birds per unit area): This is the most important basic principle in housing, as the space available determines the number and type of poultry that can be kept. For example, a deep litter house measuring 6 m by 11 m can hold 200 laying hens at a stock density of 3birds/m2. Linear space or length of perch per bird is measured in centimeters. The recommended floor and perching space for the three main types of chicken is shown in the table.

                       Requirement of chickens for floor and perch space

Chicken types	Floor Space (birds/m2)	Floor Space (ft2/bird)	Perch Space (per bird)
Layer	3	3.6	25 cm (10 in)
Dual Purpose	4	2.7	20 cm (8 in)
Meat	4-5	2.1-2.7	15-20 cm (6-8 in)

FEEDING

This is an important aspect of any commercial poultry enterprise, as it account for up to 70% of the production cost. Healthy poultry require a sufficient amount of protein and carbohydrates, along with the necessary vitamins, dietary minerals, and an adequate supply of water.[6] Certain diets also require the use of grit, tiny rocks such as pieces of granite, in the feed. Grit aids in digestion by grinding food as it passes through the gizzard.

Better nutrition for young stock boosts their immune response to disease challenge and to vaccine response by developing full immunity. The quantity of feed and the nutritional requirements of the feed, depend on the weight and the age of the poultry as well as the season. Feeders are used to provide food for the birds. There are different types of Feeders and are also modified depending of the age of the birds.

There are different forms of feed for the various types of chicken. Which is a function of the constituents; and are fed to birds based on different age, production expectation etc. This is categorized into: starter, grower, layers mash, and finisher.

There are three types of Poultry Feed:[7]

1. Pelleted feeds are concentrates of high quality grain ingredients with vitamins and minerals added.
              
2. “Crumbles” pellets are “broken” making it easier for poultry to eat. Same as pellets: concentrates of high quality grain ingredients with vitamins and minerals added. 
    
3. Mash – crumbles are “smashed” to make a “meal”. Concentrates of high quality grain ingredients with vitamins and minerals added.  
    

Water: Equally important is the provision of clean and adequate water to birds. Poultry can do without feed for a while but not without water. Water requirement varies with the age of the birds, type of feed, temperature etc.

Medication: The administration of therapeutic agents to treat various infectious diseases or conditions. This include: Dewormer, Antibiotics, Coccidiostats, Antifungals, Insecticides/Acaricides, Vitamin/Mineral supplements etc.

Vaccination: This involves inoculation with a specific biological substance (antigen) to stimulate resistance or immunity to a particular disease. A good vaccination schedule for the flock will guarantee a better management of the health of the poultry. There are different vaccines to prevent different diseases such: Fowl pox, Newcastle disease, Fowl cholera etc. Examples of vaccines includes: Lasota, Fowl Pox vaccine, Marek etc. vaccines could be administer  by water vaccination, intramuscular vaccination, eye drop vaccination, subcutaneous vaccination.

          Vaccination is no substitute for good management and does not provide 100% protection. Diseases are best prevented through good biosecurity, nutrition, and management.

BROODING

Once the chicks are hatched, they must be maintained at higher than normal temperatures until they develop sufficient size and feather coverage to acclimatize to more normal animal housing temperatures. The need to provide auxiliary heat for the animals is known as Brooding.  A brooder house is used for this exercise; an enclosed building or portion of a building in which baby chicks can be grown from day-old to 8 weeks of age.

Temperature Management: The chicks should be housed at a temperature between 30 -33OC, at a relative humidity between 40 -60%. This temperature is reduced every week; however, observing the birds during the brooding period will assist in providing the most desirable temperature. Birds that are cold will huddle together in a very tight group. This is an indication to increase the temperature. On the other hand, when the temperature is too hot the birds will pant and appear drowsy, and they move away from the heat source. Birds will be evenly dispersed within the brooder house and be active when optimum temperature is available.  Brooding procedures until 8 weeks of age are the same as for the different types of chickens.

Summary of Brooding requirement[8]

*Increase appropriately as birds grow and for larger breeds and types

BROILER

Broilers are chickens bred and raised specifically for meat production. Broilers are the main type of chicken produced by modern integrated poultry raising facilities due to their high feed-meat conversion ratio. Most commercial broilers bred for meat reach slaughter weight at between 6 to 8 weeks of age. The length of the cycle is influenced by the degree to which the feeding diet is balanced and considers the cost of feed per 1 kg of meat produced, the feed-to-meat conversion ratio and the sale price of boiler meat. Feed quality, heat regulation, veterinary/sanitary control and animal density within breeding houses (on average 10 animals/m²) are the most important factors affecting growth.

                            Bird health is of extreme importance in broiler production. Poor chick health will have a negative impact on all aspects of production and flock management including growth rate, feed conversion efficiency, condemnations, livability, and processing traits.

Broilers are fed ad libitum to allow for rapid growth within the short period of time. Lighting programs are typically designed with changes occurring at predetermined ages and tend to vary according to the final target market weight of the broilers. They feed all day long in the presence of light. The nutrient requirements decrease with the age. The birds are placed on broiler starter, grower and finisher diet depending on their age and target market.

 COCKEREL: These are male chicken (for meat or breeding purposes) attains market weight of 1.5 – 2.5kg at 20 - 22wks. The same management principle as applied to broiler also applies to cockerel. 

LAYERS

These are birds which are raised for egg production. Most layers will start laying eggs the moment they are 18 weeks old but some wait till they are about 22 weeks old. Whichever way, Layer farming is considered the most lucrative of all poultry farming. This is because Layers do two things, they lay eggs which fetch good money in the market, and are equally sold for the meat.

 In the absence of photo stimulation, the age of start of lay is determined by body weight. Weight can vary according to climatic conditions and the day length experience during rearing. Once photo stimulation has started, age at start of lay is no longer influenced by the pullet’s body weight. Egg weight is to a large extent dependent on body weight. For that reason, it is important not to start the light stimulation until pullets have achieved target body weight. The pullets are fed ad libitum (that is without restriction) to attain desired weight.

                                    

                             

Starter feed is fed from 1 day old to 6 weeks, after which growers mash are given. Between the ages of 17 – 18 weeks layers mash are given to help egg development. Birds typically lay for a twelve-month period starting when they are about 21 weeks old and lasting until they are about 72 weeks old.

[9]Effective and efficient management techniques are necessary to increase the productivity of the birds and consequently increase income. This entails not only proper housing and feeding, but also careful rearing and good treatment of the birds.

Vaccination and disease control. Diseases and parasites can cause losses in egg production.

Some of the diseases are as follows:

·         Bacterial: Tuberculosis, Fowl Typhoid

·         Viral: Newcastle, Fowl Plague

·         fungal: Aspergillosis

·         protozoan: Coccidiosis

·         nutritional: Rickets, Perosis

Some of the parasites are: External: Lice, Mites Internal: Roundworms, Tapeworms

Vaccinations are administered to birds by injection, water intake, eye drops and spraying. Clean and hygienic living quarters and surroundings may eliminate up to 90 percent of all disease occurrences.

Economic potential

The poultry sector was the most dynamic meat sector during the last decade, showing the greatest growth of all meat sectors as reflected in world consumption. The dynamism of the global poultry sector has been supported by a strong growth in demand. In Eastern Asia, the lack of supply in pork meat already observed in 2007 and food scares resulted in a gradual shift in consumption from pork to poultry. In the Russian Federation and Latin America, income growth significantly promoted the consumption of meat in general and poultry meat in particular. The demand for poultry meat was even more important in the Middle East, where competition with pork is almost non-existent. At the global level, total poultry meat production increased from 69 million tons in 2000 to 94 million tons in 2008, which corresponds to an increase of 35%. This growth was attained despite recurrent consumer scares and regional trade restrictions linked to the spread of various diseases, such as the outbreaks of the avian influenza and the Newcastle disease, which represented major threats for the poultry sector worldwide.[10]

     Source: FAO Food Outlook, June 2009

The United Nations Food and Agriculture Organization (FAO) estimated poultry population in Nigeria to be in the range of 175,000,000 in 1987 and 200,000,000 in 2002. These figures reveal a very slow growth rate of nation’s poultry industry.

The imports of chilled and frozen poultry meats into Nigeria for the years 2000 to 2005 shows that the total import of poultry products over the five-year period is 11,045,522 kg. The import figures declined from 421,569kg in 2003 to 2,235kg in 2005, (Due to review of import policy which is unfavorable for local production). Thus, indicating a declining contribution of poultry imports to poultry products consumption in Nigeria[11].

It is expected that in the next ten years, the meat sector as a whole will continue the upward production trend driven by world population growth, particularly in developing countries.

The poultry industry in Nigeria had been rapidly expanding in past years, increasing from 185,300 MT in 2001 to 268,000 MT in 2011. Very high input costs in 2008 and 2010, caused flock expansion to effectively cease in 2008 and in 2011.

Fundamentals of Starting and Running a Business Pitching Your Business Ideas for Investment

[TEXT: PITCHING YOUR BUSINESS IDEAS FOR INVESTMENT]

[TEXT: Learning Objectives

1. Identify potential business partners.

2. Look at the key elements of a pitch.

3. Craft and deliver a pitch.

4. Follow up.]

[TEXT: moses babatunde, Chairman, TRUE]

My name is moses babatunde and this is “Pitching Your Business Ideas for Investment.”

In this lesson, we will explore how to identify potential business partners, look at the key elements of a pitch, craft and deliver a pitch, and follow up.

If you are serious about starting a new venture, you must demonstrate to potential business partners and investors that you are passionate about the idea and truly believe that the business can succeed. You must be willing to work hard, on weekends and late into the night. You will show your investors that you can do what it takes to make your business thrive, knowing that profitability and growth will one day justify all the efforts. Although many businesses fail within the first year, many others succeed because their founders have drive and a great idea. They were able to rally a winning team and investors.

How does an entrepreneur identify potential business partners?

It’s very important to choose business partners according to both skill set and personality. Explore your own skill sets. If you are passionate about technology and see yourself as more of an introvert, then you should choose business partners who are more extroverted — partners who are willing to go out, meet customers and engage in the marketplace. If you are not very organized, then it is crucial to add a business partner who is very detail-oriented and good at handling complex tasks, whether dealing with lawyers, accounts or suppliers.

It is also good to have at least one founding team member who knows how to handle investors and answer difficult financial questions.

Still, for the business partnership to work well, you need more than just a balance in skill sets. You need to be relatively certain that your personalities will not clash. Too many businesses fail because of ego or personality mismatches.

How can you find a good match in your business partners?

By first getting to know your potential partner well. Make sure you have clearly assigned roles and responsibilities from the start. Set up a system that allows you to resolve differences amicably, without fights or unnecessary arguments.

Once the business plan is written, how does the entrepreneur craft the pitch?

The pitch should be short, explaining the idea, the potential and team members’ expertise. The key is to convey why this business is worth investing in. The pitch should explain why the target customer is willing to pay for the product or service. It should explain what kind of value you will create for that customer. Once that value proposition is framed into numbers and full market- potential quantified, the founding team should make five-year sales and expense projections and come to the required investment amount. The objective of the pitch is to get an investor to commit capital to the business.

What are the key elements of a pitch?

A sophisticated investor will listen to your pitch and assess whether you understand the market and competition. In your pitch, you should focus on a single initial market and grow from there. If, after your short pitch, the investor is convinced that there is something there, then you have succeeded in grabbing their attention and they will want to investigate further and review your full business plan.

How to best deliver the pitch?

It’s really about getting to know the audience you are pitching to. If you are meeting one investor, then you will need to research them and know what kinds of companies he or she has invested in in the past, and if they were successful. If, however, you are pitching to an audience of 12 people, you must first understand the decision-making process and figure out which audience members will have the greatest impact on the actual investment decision. Grab their attention and get them excited by showing them why your idea has the potential to change the market and lead to a consistently profitable business.

How to follow up after the pitch?

Don’t be afraid to email them relentlessly. Walk them through your business plan. Remember, investors like persistent entrepreneurs and everything you say will need to be backed up by numbers, research, and a plan. Don’t be boring and don’t allow the investor to be distracted. Your job is to help them imagine what your company could one day become, with their funding.

Fundamentals of Starting and Running a Business Identifying Your Markets

TEXT: IDENTIFYING YOUR MARKETS]

[TEXT: Learning Objectives

1. Learn how to identify markets.

2. How to research your idea.

3. How to determine your skill set.]

My name is moses babatunde and this is “Identifying Your Markets.”

In this lesson, you will learn how to identify markets, how to research your idea, and how to determine your skill set.

One of my professors gave me some great advice. He said, regardless of your business idea, the entrepreneur must ask him or herself, “What is the single necessary and sufficient condition for a business?” It is not a product, a technology, a customer need, a business plan, a vision, a strong team, investors, or competitive advantage. While all those things are important for a company to have, none of them is the right answer.

The single necessary and sufficient condition for a business is a paying customer — the person who will pay your company money for its product or service. Knowing this, how does one identify a need and business opportunity? The business opportunity is always related to the needs of that paying customer.

Begin by estimating how many paying customers there are in your chosen market. Digging deeper, find out where they are geographically, and how much they would be willing to spend on the product or service you intend to sell.

However, just because you have a paying customer does not mean you have a profitable business. In order to have a profitable business, the entrepreneur will need to gain enough paying customers, spending enough money within a relatively short period of time, so that the business does not run out of capital. These calculations are difficult, and demand quite a bit of research.

How do you go about researching your idea, then?

The goal is to launch a business based on an innovative product or service where no market currently exists. If your business idea is to sell batteries for mobile phones to residents of your home city, you will need to do the research, based on what we call market segmentation. You will have to find potential future paying customers and ask them questions about the batteries in their mobile phones. Take advantage of the Internet, if you have access, or make connections by talking to friends and family. Get on the phone or in the car, or walk the streets, to pursue information and potential opportunities.

Even if other companies might already be selling batteries, the objective is to make sure no one is selling batteries like yours. If your battery is not better, not cheaper, doesn’t last longer, or more advanced than existing batteries, then there is no reason to start a new business selling batteries.

However, if your battery is better than existing batteries, provided you’ve done the research to identify your target customer in order to estimate how much money they would be willing to spend on a better battery, you will attract lots of new paying customers. You will then have a high market share that you can use as a basis for future expansion.

How do you determine what fits your own skill set?

You’ve done all the research, based on an approach that we call market segmentation. Now you are in a position to know your future paying customers. You have an idea of what they like and dislike about their mobile phone batteries, where they live, where they shop, what jobs they have and their monthly income. You even have a good idea of how much they might be willing to spend on better batteries for their mobile phones. But in order to sell lots of batteries to your newly identified target market, you will need to make sure that target market is consistent with your values, your passions, goals and aspirations as an entrepreneur.

The ambitious entrepreneur becomes obsessed with the wants and needs of the paying customer. But he or she must be smart about the role they want to play in the business. If the entrepreneur is interested in the technology of making better batteries, and good at receiving feedback on how to improve the battery, then he or she should focus on product development and let other people on the team concentrate on sales or marketing.

If, on the other hand, the entrepreneur is good at explaining the benefits of the new battery, and why customers should pay for them, then they should be in sales or marketing.

It takes time and patience to convince new paying customers to buy your product. You will succeed if you know your market and your own personal skills.

Fundamentals of Starting and Running a Business Creating a Business Plan

TEXT: CREATING A BUSINESS PLAN]

[TEXT: Learning Objectives

1. Learn the value in creating a business plan.

2. Identify the primary elements needed to make it successful.]

[TEXT: moses babatunde, Co-Founder & Chairman, TRUE:]

My name is moses babatunde, and this is Creating a Business Plan.

In this lesson, you will learn the value in creating a business plan and identify the primary elements needed to make it successful.

Writing a business plan is not complicated, but you have to understand the fundamentals. If you have a great idea for an innovative venture and want to start a business based on that idea, you will need to attract team members and secure capital. The best way to do this is with a solid business plan.

To convince others to join you in this exciting adventure, you will have to pitch investors and funders. Before they put up any money, they will ask you many questions about your idea, and you will need the answers! The business plan will help you formulate the responses that will satisfy their questions.

But even before you go out and pitch your idea, the business plan will help you work out the potential issues and come up with solutions. This is important, whether you’re working alone or leading a team.

So what are the primary elements of a business plan? In clear and concise language, your business plan should explain your idea as well as its market potential. It should list the problems that you expect to encounter, and how you intend to solve them. It should detail the risks associated with your venture and how you intend to reduce those risks.

Your business plan should always begin with the sales demand side. For example, if your idea is to sell a new type of battery for mobile phones, you’ll need to make assumptions and determine how many batteries you think you can sell in a given market in the first year. And then in the second, third, and fourth year. By the fifth year, perhaps you will expand into new markets and begin selling different types of batteries and associated services.

Before you can claim that, you will need to do some research and find out the size of the current market for mobile phone batteries. Are there any problems with the batteries currently being sold in the marketplace? If so, you need to list those problems, and explain why your battery is better. Is it because your battery lasts longer, is cheaper, or is solar-powered, for instance?

In your business plan, you will also need to estimate how much your battery will cost to produce, and how much you can sell it for. Your battery can be cheaper than existing batteries, or it can be more expensive if you are convinced that your battery is better than what’s on the market.

The business plan will help determine how much capital you need to raise in order to get started and grow your business in the first few years.

Once you’ve explained the sales demand side, the business plan needs to also list the use of funds. This list should cover how much is needed for research, for salaries, manufacturing, marketing, distribution, and everything else you will need for the company to grow and become profitable.

What makes a successful business plan? Business plans are incredibly useful because they allow you, your team members and your investors to determine whether you’re on the right track.

If your market and pricing assumptions are valid, the business plan will help you affirm your business opportunity.

The reason most successful entrepreneurs go through the process of business planning is because it allows them to step back and think through the important issues associated with an abstract or unproven idea. Having thought through these important issues, the entrepreneur is in a better position to persuade new team members, investors and other stakeholders of the value of that idea.

The best business plans demonstrate that the founding entrepreneur has a great idea, has identified an innovation, and has a passion for that new product or service. Because the plan forces the entrepreneur to put the business under scrutiny, investors will be reassured that the entrepreneur has done his or her homework, has assessed the risks, and laid down a sequence of decisions geared towards establishing a growing market share.

Of course, entrepreneurs should know that things don’t always go according to the business plan, and that they should prepare for contingencies.

By demonstrating potential demand and an ability to produce goods or deliver services at a profit, the budding entrepreneur will see the exercise of writing a business plan as a great way to show that there is a real opportunity, and that he or she has a game plan to exploit it.