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LETS GET DOWN TO BUSINESS.

Question :
My husband and i were just about to start a business which would in turn sprout many other small businesses, using agritech. We both own our own businesses and we were going to bootstrap it out of profit/drawings, but now both our revenues are much less certain and its too risky. We would still like to do it and it is just what is needed right now. But it would take 6 months to a year to get revenue in so payments for a loan would be tough. Keep mulling it over but can’t see a way to make it work… open to ideas. 

Question submitted 17/04/20 @ 10:30pm
Industry: Primary Industry
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  • Hi, have you joined the Agtech association, they have connections, support. Can you forgo some shareholding and bring in investors? There is PledgeMe, it works well around social good or drawing on community gain ie sprouting more businesses. Syndex.exchange is a private market place to raise capital. Your own circles? I would be cautious of taking on debt in these markets if you were to find one on offer. It is difficult to provide much more with the information provided, but many businesses have been built off a recession (so its not impossible) and sometimes investment in recession is a good idea. It depends on the idea and your wider situation. What we do know is Primary industry needs to grow faster/tech to support.

    Without knowing the details options include creating a relationship with any supply partners that would see value in the business and share early costs ( or equity ). Then there’s the obvious equity funding raise . It may seem too early consider that in a normal environment but in these times investors will still be seeking opportunities, and likely to check out less traditional investments, especially those that could come through the current environment with a clear value proposition.

    Thanks. I am the original author of the question. It is a vertical farming business within a shipping container. My husband is an electrician so we want to build a plug and play indoor farm that uses the absolute minimum of electricity and is partly self powered. For leafy greens or medicinal cannabis growth. We need about $30K to build the first one. I want to create something so people can buy a ready to go business, complete with SOPs etc. I say ‘about’ because I had priced it very carefully and then the world changed! Thanks for the tips.

    Hi Jacinta

    That is a good value add proposition and caters for the DIY and lifestylers who would pay a premium for a plug and play but as you say, how much is the question.

    Do you have any end users in mind that may pay a discounted rate for a prototype. Any “produce” suppliers that may assist if they saw an end market opportunity?
    It reminds me a bit of the Henergy smart mobile laying solution featured on the RNZ clip. https://www.rnz.co.nz/national/programmes/countrylife/audio/2018735214/that-s-hentertainment
    If your solution was smart ( just internet connected to monitor say temp/humidity/light from an app there could be innovation grants available.

    As Anna mentioned, there are a number of regional investor/angel networks that could be interested in hearing a pitch from you for seed funding.

    yes it will be fully automated and internet connected so can be monitored from anywhere. Good idea about the inovation grants. If you put together already existing tech in an inovative way, does it still count as inovation?
    With regard to the seed funding, I think I will need to spend a bit more time on the business plan and budget etc before I can do that. I am fairly agile and bootstrapped my current business, so I am used to experiment, iterate, feedback, iterate but you can’t be like that with investors. It would need a bit of polish! But its not a bad exercise for me to do anyway before we make the decision. Go back to the numbers, set out the business steps on paper instead of just in my head. Thanks.

    With the whole investor thing, I have only ever had my own private business so I don’t know what I would have to do differently to have investors, how do you work out dividends, does the accountant do that, do you need to do annual reports – where would I find that information? It feels so much more complicated.

    I wouldn’t worry about that, as it would all get sorted out in a shareholders agreement down the track and you would be party to creating that. Many won’t want dividends if they’re growth focused, instead they would want profits reinvested. The one thing they generally all want is an exit strategy
    so you need to be sure that you’re aligned with what that might look like, eg a sale.
    They key thing they would want to see now would be current and projections of revenue and profit. Market competitor, sector and opportunity summary and some insight into skills/experience of founders. But once you start down the track and get a feel for investors, definitely have an advisor on hand to help negotiate and advise on any deal or agreement. Your accountant will often have (local) contacts or high net worth individuals that they could match you with so worth asking.

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