What strategies are seed businesses using to thrive in the dynamic Nigerian seed market?
Achieving success in a seed business requires more than just being good at seed production; it demands a strategic approach. A good seed business plan helps you handle industry challenges by clarifying your vision, manage resources, and implement key marketing, production, and finance strategies. These aspects are referred to as the three pillars of seed business by Dr John MacRobert of the Seed Systems Group in a 4-day seed business management training for seed entrepreneurs in Nigeria under the Collaborative Seed Programme (CSP). From seed procurement and production to distribution, sales and branding, every stage of the business requires attention to detail and planning to increase productivity and profits. The training was a result of the need to empower seed business entrepreneurs with solid business insights to boost profits, ensure sustainability, and improve farmers’ access to quality seeds.
How can a clear business plan set a seed business apart?
Yes! You can set your seed business apart and create your seed business model canvas too. Click to learn more.
Developing a seed business model canvas, a visual tool that outlines key components like value proposition, customer segmentation, revenue streams, and operations can help a business stand out. By providing a clear roadmap, aligning the team, and building a solid foundation for long-term success. Begin by defining a clear vision that guides the business and motivates the team. This vision should integrate ethical values, build customer trust, and demonstrate commitment to responsible practices. Additionally, outline the business’ vital components by establishing guidelines for operational excellence. Consider hanging the document in the workspace as a reminder. This will keep the goal in view and encourage everyone to work together towards it to make the business stand out.
How should you plan your seed business finances?
Dr John MacRoberts teaching the participants the “profit frost model” at the Seed Business Management training. (source: Sahel Consulting, 2024)
Want a detailed guide on handling your finances? Check out this guide.
Finance planning is important for any successful business including a seed business. This starts by projecting sales, considering factors such as historical data, crop type, customer segment, market supply, sales goal and potential growth. Use the profit-first model to project income and costs. This will help to set realistic targets and inform production and marketing strategies. Remember, seed businesses often have a lag between production and sales, so accurate projections are essential for managing cash flow and making profits. To set a good seed price, consider customer purchasing power, break-even and competitors’ pricing. An ideal profit should be between 10-20 % of the variable cost (costs directly linked to production) plus operational costs (consistent expenses regardless of production). To manage resources, spend money only on income generation and assets. Also, ensure positive cash flow by lowering overhead costs (costs not linked to production), as production quality cannot be undermined, and increasing gross margin. To make more profit, consider increasing income by selling more, adjusting your seed price or reducing operational costs. The profit forecast should determine the plans that go into production.
What should be considered when planning production?
A cross-section of seed company representatives at the Seed Business Management training. (Source: Sahel Consulting, 2024)
Effective production is the backbone of any seed business. It involves forecasting seed demand to guide production, optimizing production time and ensuring the availability of necessary resources. Prioritize procuring Early Generation seeds (EGS) from reliable partners to produce the best quality seeds through well-structured planning, efficient processing, and risk management. Develop and implement a production plan that outlines field management practices, agronomic techniques, and outgrower management strategies. Ensure quality control throughout the seed processing, from cleaning and grading to drying and treating. Identify potential risks such as climate conditions or factors, pests, and diseases, and develop strategies to mitigate them. Consider factors like resource allocation, and regulatory compliance to ensure a consistent and reliable supply of seeds. For quality assurance, it is key to put in measures such as having a quality assurance production manual, establishing a good professional structure with key positions for each stage of the process and mitigation strategies for production plan assumptions in demand forecasting. Efficient seed production is key to achieving your marketing and sales goals, as outlined in your financial plan.
You can plan your production better! Click here to know more.
How to market quality seeds?
Dr John MacRobert explains how you can develop a plan to market your seeds well!
Learn more here The approach to seed marketing contributes to creating demand and building customer loyalty. Focus on customer-centric methods, understanding target market needs and preferences to modify messages and offerings accordingly. Create desire by highlighting the unique benefits and value proposition, using storytelling and visuals to captivate your target audience. Deliver exceptional customer experiences throughout the entire buying or purchase journey, from purchase to after-sales support. Utilize a mix of active and passive marketing channels to reach target audience effectively, considering factors like digital marketing, partnerships, incentives, and traditional media. Choose distribution channels that align with the customer preferences, delivery time, and costs to optimize the buying process. Do well to market the seeds in a way that connect to the customers’ heads (give product knowledge), hearts (evoke emotions) and hands (drive action). Finally, monitor and evaluate marketing activities’ performance to identify areas for improvement and make necessary adjustments.
Testimonials from the participants
The training served as a moment of self and business reflections, a representative of Afri Agri Products Limited expresses this: “This training is a reawakening for me to start a seed business with standard management and improve my existing seed business procedures”
A representative of Boom Seeds Limited also expressed his eagerness to implement the lessons learnt, according to him, “The training exceeded my expectations, helped me discover knowledge gaps and I can’t wait to develop and implement the knowledge I have gained”
The impact of this training on the participants is the beginning, as participating seed entrepreneurs continue to seek advice from experienced professionals, learn from industry best practices, and adapt to the evolving needs of their customers and the market, they can achieve long-term success and provide high-quality seeds to farmers timely, create valuable purchase experiences and make profits.
