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What
Makes Agricultural Entrepreneurs Successful?
By: Rob Holland
October 2000
What are
some of the characteristics that make some agricultural entrepreneurs
so successful? The UT Agricultural Development Center
recently conducted case-study interviews with successful agricultural
entrepreneurs. They interviewed owners of businesses that
produced wine, fruit pies, country hams and operated a catfish
restaurant. Here are some of the characteristics common
among the cases studied in this project.
- The businesses seemed to experience growth and mature
over an eight-year period.
- The average age of the entrepreneurs is mid- to late 50s.
- Entrepreneurs have a strong desire, interest and commitment
to the long-term success of the business.
- Identification of specific target markets is critical
to product positioning.
- Management of cash flow was critical in the early years
of the businesses and in the later years for those businesses
with seasonal sales.
- Quality control, consistency and large-volume production
were critical issues in the development of overall production
systems.
- An in-depth understanding of and compliance with a variety
of regulations are needed.
- Most direct costs for marketing and promotion were incurred
in the early years of business operations.
- Word-of-mouth advertising seems to be the most effective
long-term marketing tool.
- The businesses were built on a philosophy of "let the
business grow with the market (dmand for the product) over
time."
"Potential
or existing agricultural enterprises can learn from the experiences
of the business cases evaluated by this study," said Rob Holland
of the Agricultural Development Center. "These businesses made
substantial investments in marketing and promotion in the early
years, buy word-of-mouth advertising seems to carry the enterprises
in the maturing years."
Holland
said that while start-up costs were fairly significant, the
businesses were built to satisfy relatively small-volume sales
in the early years and expanded over time. Identification
of the specific target customer who preferred their product,
coming into regulatory compliance, quality control, cash-flow
management and consistent products were all identified as
factors critical to the success of the value-added business.
For additional information regarding the study project or
Tennessee value-added agriculture, contact The Center for
Profitable Agriculture at (931) 486-2777.
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