How to start a produce business in Uganda (2022).

So you want to start a produce business? You’re not alone. The number of people doing agricultural produce has grown significantly over the past few years. Just because many are doing it, its not good to dive in headfirst.

The produce business is a great way to make money. It can be done as a side job or as a full-time job. But how do you get started?

This post will tell you all you need to know about starting a produce business. It has the most important aspects of a produce business discussed, strategies you can use, and tips to be successful doing a produce business.

What is a produce business?

Produce is a term that refers to agricultural products ranging from cereals, fruits, and more in that category.

A produce business is one where the business owner exploits the price difference between two localities and fluctuations in price by buying from a cheaper source and selling at a profit or keeping the products till the price increases due to limited supply or scarcity and then selling for a profit.

How does the produce business work?

It’s easy to Start a produce business as it runs on two simple principles.

1. Price fluctuations (inflation).

In this method, you buy produce at a cheaper price and then wait for the price to increase due to scarcity and then sell-off. The price difference is your reward as a businessman

2. Price difference in two different localities due to different conditions in the areas.

Produce is cheaper in production areas compared to consumption areas. All you do in this method is buy at a lower price in production areas and sell at a profit in consumption areas.

What different products can you deal with in a produce business?

In a produce business, you can deal in any agricultural products. As long as you can get a cheap source and some other place where you can sell the products at a profit. Such products include;

Maize/ corn, Millet, Simsim, Rice, Beans, soybean, groundnuts, cassava, etc.

Is doing produce profitable?

Just like any other business, produce too is profitable as long as.

• You can get a cheap source especially in the production areas and resale in urban areas.
• You try to cut down costs especially of transport and processing.
• You do the right price estimation analysis so that you sell when the price is high.

How much money is required to start a produce business?

The capital requirement for a produce business range from small to big based on your strategy and the product you are going to deal in. We shall elaborate more on this at a later stage. Though if you have small startup capital, you need to look out for cheaper products, buy them, sell and make a profit and then later come back for more.

How to start a produce business.

Plan your produce business.

Planning is the first step in the procedures on how to start a produce business. You don’t need to make a complex plan. All you need are the key issues that shall affect your produce business addressed.

The key elements you should have in your produce business plan are an Executive summary, Business goals, and objectives, Market analysis, Sales strategies, and Source of Funds. All these are important to your produce business and you should have them developed and we’ll plan.

For details on all these elements, Read the article below that is about how to write a business plan.

Read more: How to write a business plan.

Find a strategy and product to deal in.

A strategy for this case is a business mechanism that you’ll use or adopt to make a profit.

There are two strategies in the produce business;

Buying cheaply in production areas and reselling right away in consumption areas at a profit. This strategy is good for people with little startup capital.

Buying in production areas and storing the produce for prices to rise and then reselling at a profit. This method is good for people with a lot of startup capital. Simply because capital is tied up in produce in the storing phase. If you have little capital, you can run out of business. This strategy doesn’t work for perishables such as fruits.

It’s also possible that you can use both strategies especially if you have good startup capital.

Before choosing a strategy, it’s important to consider;

• Your startup capital. This can dictate the strategy you should use.
• Market trends in your area and how stable prices are. Are there efforts by any bodies to keep prices stable?
• The products you wish to deal in. They too can dictate the strategy.

After you’ve chosen a good strategy, now you can choose the product/s to deal in among the many products. You need to choose those that meet your criteria and strategy.

Raise capital.

Earlier, we already looked at the capital requirement for a produce business. We’ve further discussed the strategies in detail and how they influence the capital requirement. In summary, any amount can work based on your strategy and the product you are going to deal with.

Now that you know how much money you need, it’s time to look around at how to raise that money.  Some of the ways to raise startup capital include Personal savings, Partnerships, Bank loans, and loans from friends to mention but a few. We have a full blog post about how to raise capital for your business. You can get detailed information there.

Get a store in a good location.

A store in a good location. These are two aspects, a store and a good location. You can have two stores as it’s tricky to get a spacious store in a busy town place. A small store at your sales point and a spacious mega one on the side. This is because there is a lot of produce to store especially if you fall for that strategy.

Location is another aspect you have to consider. Most developed and developing areas have groupings for different produce. For this case, get a good location in the agricultural production area. Make sure it is;

Easily accessible, with parking, loading, and offloading space.

Get suppliers and agents.

If you are to start a produce business, you’ll need suppliers of produce. These can be middlemen, producers, and whole sellers.

Read also: The key elements to success for a new business.

Start your business.

Now that you have all the above set, it’s time to start your business. You should start your produce business in the season when the specific product you are to deal in is ready. this will get you straight in business.

Tips to cut costs in a produce business.

• Cut transport costs.

When you purchase from production areas, consider transport cost as it’s a key element that can lead to losses if not considered

• Do market analysis the right way.

Price fluctuations are two-sided, both positive and negative. Watch out for price drops when you have the products in your store.

• Have permanent employees especially those that carry.

It’s wise to pay employers based on work done as sometimes there is no work to be done to cut costs.

• Have a big store to avoid shifting produce multiple times.
• Have agents in the different well-known production areas to make the process of getting produce easy. This is a trick to beat the competition.

Conclusion.

That is it on how to start a produce business. We hope you have good knowledge and are now well equipped to start your produce business. Just like all other businesses, produce too requires hard work, persistence, and patience. Equipped with those three, there is no way you’ll fail to make it in the produce industry. All the best doing business.

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