Running a business can be challenging; running a farm business even moreso. Factors like climate, pests, natural disasters and fluctuating prices can make farming and running an agribusiness prone to instability. Farmers and agribusiness owners need to have a constitution of steel to avoid succumbing to the pressures of the industry.
Cousins Jessilyn Uy and Roel Chan, co-owners of God’s Grace Farm (GGF) in Cebu, have weathered many challenges since GGF was established in 2011.
Chan shares some tips on how they managed to cope with the challenges and keep their business not just running, but thriving:
Keep your passion for farming burning. Any business owner will encounter challenges, and farming is no exception. “There are many uncontrollable factors [on a] farm, from pests, to the weather, even labor issues,” Chan says. “If you’re not grounded and if you’re not literally on ground… [so] you know what’s happening on your farm down to the smallest thing; [if] you don’t want to get sweaty, [or stay out in the sun], then you’re not in the farming business. Passion really drives that.”
Adapt to technology. This applies to production and distribution. On the farm side, “adapting to technology includes productivity and being sustainable,” Chan says. “I think there’s a balance.” Because, [for example], if productivity is your only [concern], then you will use all the chemicals that you can use just to make sure that you get all the yield that you want. There are technologies [that can] increase your productivity [while being] sustainable and responsible. You should study that. It’s a never-ending study.”
Never stop learning about your industry. A good business person is one who is always in tune to what’s going on in their industry, and a better business person is one who is also in tune to what’s going on in other areas just in case there are opportunities as well. “You study, you go to the [trade] shows,” Chan says. “…ATI (Agriculture Training Institute) has so many programs, a lot of them online. Continuous learning.”
He adds that there are many resources online, and that one should not be afraid to experiment.
Pay attention to distribution and logistics. Spoilage accounts for a huge amount of loss in the agriculture industry, and this must be taken into consideration when running a farm business. The GGF team had to do a lot of research on optimal storage conditions for each product they offered. “[They can also] explore available resources like cold storage,” Chan says. “Just inquire, especially [if you’re] starting out. The prices [can be] friendly… And whether you use a forwarder or go direct with the courier, the airline, the shipping, everything is improving… I don’t even have to buy a truck. I can just book [using a delivery app] now and I get the same delivery whenever I need it. There’s that advantage with the modern economy that also helps… a business like mine.”
Think long term. “Always bear in mind that the food business is a recurring business, so if it’s a recurring business, the lifetime value of your customers is long and valuable,” Chan says. Offer premium customer service to encourage loyal clientele. You don’t have to bend over backwards for your customers, but showing them that they are valued will go a long way in making them feel good about supporting your business. For example, if a customer complains about receiving damaged produce, GGF replaces it, no questions asked. “I struggled with that in the beginning because I count pennies every transaction. Then I realized [that every] damaged item [you replace] impresses people, and you cannot recreate that feeling… The complaint will turn into admiration,” Chan says. “And of course, it’s also a business of trust. Every customer who gives a positive testimony about your business is equivalent to probably–to pull a number–10 [new] customers.” Chan says.
Price your products correctly. Chan doesn’t believe in offering discounts to entice customers, for two reasons: First, dealing with perishables will require the business owner to factor in damage and spoilage when computing prices. “You’re not greedy for putting a buffer because you’re sure to lose stock to that,” he says.
Second, you won’t need to sell excess stock at a loss if “you also program your inventory properly,” Chan says. “[Starting] from the farm [to] how much you plant [to] how much you will bring into your stores, if you [plan]correctly, then you don’t have to [sell at discounted prices], and you minimize food waste.”
Try not to give in to trends. In line with proper planning is resisting the urge to follow trends without properly studying the market. “I haven’t seen any technology that can [predict what will sell] but through time, you get to learn that by gut feel and at the same time, by being responsible,” Chan says. “Don’t be greedy, like, hey, a lot of people are buying this. I’ll plant it tomorrow. It doesn’t make sense.”
Have a strong support system, especially during trying times. Anyone who is considering going into agribusiness should understand that it isn’t for the faint of heart, as there are so many uncontrollable factors involved in its success. “This is a very slow business because you have to be careful,” Chan says. “It could be okay today, but it might not be tomorrow. One typhoon and you might end up crying.” He relates that his cousin almost gave up after Super Typhoon Odette ravaged their farm, but he encouraged her to stay on because he knew that they could get over the challenge. “This is drama in real life. It really happens,” he says. “So we try to encourage each other.”
Photos courtesy of Roel Chan