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Business PlanAgriculture AssessmentFebruary 2018

Group Leader: Alex Piatek

Team Leader: Georgina Scott

Trekkers:April Serhan-GuevaraKate O’DonnellPaige MoultPaige MandySorrell Handforth

© XYZ For Good Pty Ltd T/A Project Everest 2018 1

Table of Contents

Executive Summary 3

Ownership Structure 7

Products And Services 7

The Market 10

Market Research 11

Marketing Strategy 16

Competitor Analysis 16

Operations And Logistics 17

Cost And Pricing Strategy 17

Financial Analysis And Reporting 18

Contingency Planning 18

Future Actions/Next Steps 19

Glossary 21


Executive Summary

Business name

Agriculture Assessment

Business summary

At this stage, the project is focused on assessing the viability of our current product through

market research. Our offering includes three elements, each of which complement each other to

provide a holistic solution to the key pain points smallholder farmers experience. Firstly, there is

a farming blueprint, which will be designed so that farmers have tailored options to improve their

farm within their individual capacity with consideration to their own goals and circumstances.

This will be complemented with a consultancy service to ensure farmers can seek advice as the

crops grow. Finally, a distribution service will provide a platform that connects farmers and

business-to-business consumers to create a more streamlined avenue for food distribution.

The blueprint and consultancy will provide a revenue stream, with farmers paying for the service

as an investment for their business. The distribution service will provide an additional revenue

stream; the premise of this product is that parties from either side of the distribution network-

that being farmers and business-to-business consumers, will pay for the service. The business

will need to continually measure the outcomes of all these aspects in order to quantify the social

impact on the community with respect to the United Nations Sustainable Development Goal of

Zero Hunger.


Business aims

To improve the food security and opportunities of smallholder farmers through:

1. Increasing yield size and improve quality

2. Improving consistency of produce throughout the year

3. Encouraging nutritional variety of crops

4. Facilitating market access


Financial summary:

Experimental Farm Cost Analysis

Costs to Date: 20/12/2017

Unit Price per unit Units required Total price

Tools

Small hoe MWK700.00 1 MWK700.00

Big hoe 1 MWK2,700.00 1 MWK2,700.00

Big hoe 2 (handle) MWK1,000.00 1 MWK1,000.00

String 50 metres MWK1,000.00 2 MWK2,000.00

Shovel handle MWK600.00 1 MWK600.00

Scales5kg scale, 1 g error MWK 13000 1 MWk 13000

Seeds

Maize (SC 403) 1kg MWK1,500.00 1 MWK1,500.00

Tomatoes (Rodade, Seed Co) 2.5g MWK970.00 2 MWK70.00

Tomatoes (Mayford) MWK1350 1 MWK1350

Carrots (MayFord) g MWK800.00 4 MWK3,200.00

Pumpkin 2 dishes MWK200.00 1 MWK200.00

Pigeon peas* MWK0.00 1 MWK0.00

Groundnuts* MWK0.00 1 MWK0.00

Eggplant (MayFord) g MWK1,350.00 3 MWK4,050.00

Radish (MayFord) 10g MWK1,350.00 6 MWK8,100.00

Mulch Few bundles MWK 600 1 MWK600

Total MWK12,170.00 MWK40,470.00*Seeds were donated from community members

Note that ‘units required’ refers to the units utilised to date.


Business Model Canvas

It is encouraged for the July team to work through a new Business model canvas (BMC), to find issues and ideas that they have experienced. In the links below are the BMCs for December, January and February. The direction of the business has changed a little between these months, with the January team envisaging a more holistic approach to the product rather than a range of product options. This is because each product individually will not provide a strong enough value for the farmers. However, as a combination of the blueprint, consultancy and distribution service, it is believed that Project Everest can differentiate themselves from the market whilst also guarantee returns for the farmer at each process.

The January BMC currently only focuses on the blueprint and consultancy, as it was easy to envisage given that the distribution service has different customers such as supermarkets, hotels, restaurants and cafes who have different value propositions to the farmers. However, it is encouraged that an attempt is made to merge the product offerings into a single template, to simplify how the produce and revenue may flow through the business.

The February BMC has changed direction further, purely focusing on the supply chain network.

Link to the February version of the business model canvas: Link

Link to the January version of the business model canvas: Link

Link to the December version of the business model canvas: link


Ownership StructureXYZ For Good Pty Ltd (T/A Project Everest)

Products and ServicesWhat we sell

The current business model is in its very early stages. As such, further ideation and prototyping

of the experimental farm alongside market research (empathising and defining) will be required

before a final product can be released to the market. The current business model identifies a

holistic product that can be broken down in three parts, with corresponding revenue streams.

1) Farming blueprint

○ The provision of a tailored farming blueprint to smallholder farmers who wish to

implement the system on their plot of land. For an example of what this might

entail and information that needs to be included, see this link:

Click Here.

The following still needs to be determined:○ Continue research and data collection from various sources to gain a greater

understanding of the issues faced, allowing us to continually improve our model.

○ Continue relationships with Bvumbwe Research Station (13 km from Limbe

towards Chigumula, look for sign on the right), Kasinthula (irrigation) Research

Station and other organisations to source valuable secondary research for the

blueprint design and distribution service.

○ Farmers’ willingness to pay for this product needs to be validated in the ‘Test’

stage of the design thinking process, as farmers are already able to get


information free of charge on new farming practices from Agricultural Extension

Officers. A survey was designed by the January team regarding this question, but

was not undertaken in either January or February (can be found here). However,

this would be vital to know from the farmers whether a revenue model could be

established.

○ Whether an upfront payment is feasible or other payment options are required

i.e. subscription.

○ Will the business supply the required inputs (e.g. seeds, fertilizers, pesticides)

alongside the blueprint? If so, establishing relationships with suppliers will be vital

to reduce costs creating an added incentive for farmers to adopt the blueprint.

○ Scalability of the blueprint needs to be tested across various plots in the same

region and across different regions in Blantyre.

○ The possibility of using technology such as drone mapping and cognitive

technology to facilitate blueprint choices.

2) Consultancy service

○ An added service alongside the farming blueprint. Farmers can receive ongoing

tailored support which assists in the implementation of the blueprint and then any

advice on maintenance and farming techniques necessary to improve their yield.

This can then be used for data collection and distribution mapping for Project

Everest as well.

The following still need to be determined:○ Do farmers see the value in this or are they happy with the blueprint alone?

○ Who would be providing the consultancy service? Will we require someone on

the ground who can talk to farmers face-to-face or can it be done virtually? Will

this make the service cost prohibitive?

○ How will the services be provided? Individually or through community groups?

○ What kind of content will the service entail? (e.g. Drone analysis, soil testing)


○ How will Project Everest differentiate themselves from Extension Officers who

already provide this service for free.

3) Distribution service

○ Project Everest would guarantee to purchase surplus produce from farmers, to

be sold at a markup to businesses that require a variety of fresh produce (e.g.

hotels, restaurants). This may be combined with storage options so that market

price fluctuations can be used to best facilitate social impact and revenue.

○ Another option is USSD coding which is a mobile text based communication

platform (similar to the way you load Airtel credit while in country). It will be used

to create a supply chain network between the supplier to the end buyers in order

to increase access to the market. This idea is in very early stages therefore there

is no set direction on how this will be done.

No decision has been made about which option will be taken.

The following still need to be determined:○ Coder (Quina found through Minota) to create the USSD coding system

○ Quantify the value of which market access means to them, which is difficult

because farmers often cannot imagine having surplus to sell at those quantities.

○ Continue mapping out the distribution service network to understand the process,

while identifying opportunities and threats within this market

○ Research needs to be conducted to assess what barriers to entry exist within the

distribution market for both domestic and international distribution. (e.g. food

regulations and standards)

○ Whether Project Everest will set up a new distribution network or leverage the

existing methods available (e.g. bicycle, minivan, truck).

○ If this is not available, explore other methods for farmers to reduce the risk of the

blueprint (such as insurance, contract farming etc).


The Market

Early adopters

For the business-to-consumer segment: Community members in Nsambudzi and surrounding

villages who are able to afford an upfront payment for the blueprint and an additional payment

for consultancy and distribution services. They will typically have a relatively larger landholding

and willingness to experiment with new techniques.

For the business-to-business segment: Businesses such as supermarkets, hotels and

restaurants who wish to source fresh and local produce through us.

Different market segments being targeted at different stages of growth

Once our offering has been subject to various iterations taking on feedback from our early

adopters, and the business has a sustainable revenue stream, we will look to cater to farmers

with lower income levels and smaller landholdings. To do this, we will establish separate tiers

with differing price points, whereby we offer consultancy on a less personal level or using

groups rather than individuals. Our distribution service would also be more widely accessible,

especially to more remote villages who currently struggle to access to the market.

How consumers will interact with our goods/services

We aim to provide a personalised service to farmers, which will involve interactions with our

consultants on a regular basis. Additionally, the distribution service will take this approach

allowing customers to be knowledgeable in the process of how their produce is getting to them.

For business partners, we aim to build strong relationships to ensure that they will continue to

source their fresh produce from us.


Sales of products/servicesN/A

Market Research

Relevant secondary research

Bvumbwe Research Station has been helpful with connecting Project Everest with Extension

Officers and sharing secondary data. Through further meetings, Bvumbwe Research Station

has given the Agricultural assessment team six documents containing useful information on

distribution networks, experiment protocol, a research station guide, climate information

valuable contacts as well as other information.

A meeting with Kasinthula Research Station resulted similarly in the way that the Research

Station shared valuable documents with the Agricultural assessment team focusing on irrigation

and how it can affect crops and yields. In some of these documents, irrigation techniques are

tested in experiments to determine the most efficient methods. Nitrogen fertilizer experiments

are also analysed to determine the most efficient and effective fertilizer combination.

This information from both Research Stations will be highly beneficial to the Agricultural

Assessment team when further developing the farming blueprint and later the experimental

farm.

These methods should also be combined with Best Practice work already being undertaken in

Malawi, such as Roseberry farms and methods farmers would like to use.


Farming Techniques and Methodologies

● Compiled list of crop information

● Planting densities

Overview of Malawi Agriculture handover document can be used to understand the current

practices being used and the pain points that have been identified: Link

The distribution network is useful to understand how Project Everest has identified where

produce goes from farm to end consumer. After surveys were completed with farmers and

vendors, the data was collated in a spreadsheet to begin analysis. A couple of our assumptions

were questioned through the surveys answers. Before completing surveys, the Agricultural

Assessment team believed that farmers and middlemen had regular customers that they

connected with each time they sold produce although this was found to be quite uncommon. It

was assumed that market stall holders would sell all of their produce during the day and if not,

they would take their produce home to resell on the following day, however it was discovered

that some market stall holders sleep overnight with their produce in order to keep it safe for sale

the following day.

Distribution service survey spreadsheet (vendors): Link

Farmers distribution survey spreadsheet: Link


Empathise breakdown:

This is evidence found from surveys conducted from July to December, and interviews for the

distribution service

Pains:

● Inability to afford farming inputs (e.g. fertilisers and pesticides)

● Ineffective farming practices (e.g. monocropping staple crops such as maize increases

susceptibility to pest invasion & continues to deteriorate soil fertility)

● Market access can result in much produce to go to waste as well as reduced quality, and

flooding of markets can make selling to the market a net loss activity.

● Lack of diversification of produce at markets reduces the selling price

● Lack of a secure market can result in uncertainty working day hours

● Lack of security can mean sleeping overnight at the market to protect produce from theft

Gains:

● Access to tailored information and ongoing support to maximise farm productivity

● Reduced need for expensive fertilisers and pesticides through the introduction of

permaculture techniques

● Increased crop yield and diversity, which increases the earning potential of smallholder

farmers

● Increased nutritional variety

● Increased market access and transport options

● Niche crops increase potential selling price. Ie. sugarcane, strawberries, mushrooms


Jobs to be done

● Restart the experimental farm after further research is completed

● Analyse survey data

● Shadow more distribution chains (only one completed)

Define breakdown

There are huge issues with pest control, fertilizers, irrigation, crop nutritional value and quality of

the produce. This stems from the farming techniques currently used such as monocropping

which is due to lack of space and understanding of crop rotation. Farmers rely heavily on

fertilizers and pesticides which are expensive to buy, and therefore are not always accessible to

farmers. Companion planting and organic fertilizers can be the solution to pest control and

cheap fertilizer as this reduces the amount of capital spent on solving issues. Crop rotation also

leads to increasing nutritional value of crops as some of the plants replace the nitrogen levels in

the soil whereas others deplete the soil of nitrogen. Irrigation proved to be necessary in our

experimental farm as many seeds did not germinate due to a two week drought. Although this

has not yet been incorporated into the blueprint, it is something that should be looked into

further.

Distribution access is low for smallholder farmers in Malawi, thus creating issues with selling

produce from farms. With the common mode of transport to the markets being either walking,

riding a bicycle, minibus or lorry, the quality of produce can reduce with the lack of refrigeration

of vegetables. Obviously refrigeration is not an option at the markets, therefore the

transportation method needs to be easily accessible and potentially better in terms of benefitting

the produce. Responses from farmer surveys indicated a strong interest in increasing

productivity, for both personal consumption and selling for profit.


SWOT Analysis:

Strengths● Established good relationships with

stakeholders.

● We have easy access to information about

various farming and irrigation techniques

that come at no cost to us.

● Have access to agricultural business

consultants (Fiji twins).

● PE has a good reputation in Malawi.

● In terms of the blueprint, we have the first

mover advantage.

● The consultancy service to implement the

blueprint at farms.

● Accessibility to communities.

Weaknesses● Scalability of our business model based

on individual variables for each farm.

● The state of the blueprint is currently still

in development.

● There is a limited understanding of the

supply chains in Malawi.

● Has not been tested in Malawi before and

may not yield the same results as other

countries where similar concepts have

been executed.

Opportunities● Market opportunity to implement supply

chain as current distribution chain is

inefficient.

● Communities such as Nsambudzi are

open to advice and sharing of information.

● Potential future partnership with Bvumbwe

Research Station.

● New varieties of crops are being created

with longer shelf lives.

● Niche product with diverse crops in the

blueprint results in a higher profit when

sold.

Threats● Agricultural Extension Officers could

attempt to disseminate our methods for

free, which might result in the community

being misinformed.

● Lots of smallholder farmers are risk

averse.

● Unpredictable weather, rainfall and

droughts (if pursuing the blueprint/the

experimental farm).

● Farmers lack of capital.

● Seasonality and time taken to grow crops

means finalising blueprint design will be

slow.

● Reducing the need for middlemen might

increase unemployment.


Marketing Strategy The focus of marketing may take many forms, and the ideas identified are at the moment only

suggestions. For Project Everest to reach the farmers, using highly visual branding on products,

word of mouth, visual marketing in markets, and regional shop fronts may be useful. Also,

identifying early adopters through networks and community leaders will be vital for the early

progress of the product.

When establishing connections for distribution service, personalised sales to the supermarkets,

exporters and other big end customers can be used to capture an initial markets. And from here,

the proof of concept will make personalised sales cheaper for smaller retailers like the cafes.

Competitor Analysis The District Commissioner's Office, through Agricultural Extension Officers, currently provides

free workshops and advice to local community members, disseminating information about

farming methods and sourcing inputs. As such, they offer knowledge that is similar to our new

suggested blueprint and consultancy service. However, Project Everest can offer the unique

value proposition of a holistic farming system with tried, tested and proven methods, tailored to

individual farmers’ circumstances, that provide nutritional variety and increase resistance to crop

loss.

Roseberry Farms is a highly respected farm that operates a similar model to Project Everest

envisages. This includes contract farming in Bvumbwe with 40 women, along with her farm here

in Blantyre, and then sells onto Shoprite and private buyers. She works with the UNDP and her

mission is to empower women in the horticulture sector. Although this is very similar to the

product design above, some key differences do exist. This includes a lack of scalable plan for

the Roseberry farm, given Ruth (owner), has to visit the farms and direct the produce as she © XYZ For Good Pty Ltd T/A Project Everest 2018 16

needs. Her customers are only the end consumers of the produce, and the farmers work on a

contract. This is different to Project Everest where our customers are also small-holder farmers,

and the aim is to give them the opportunities they would like. However, care has to be made so

that the businesses complement each other and do not compete too much, given Ruth has the

capital and network to outmaneuver Project Everest in the early stages.

Farmers Organisation Pty Ltd has initiatives in place addressing issues faced by smallholder

farmers. They have recognised the lack of access to smaller quantities of fertilizer, pesticides

etc. and provide an annual package inclusive of any supplies necessary for the maintenance of

the consumers farm. The package is tailored to the specific farm in a similar way we are

considering including supplies in our blueprint.

Operations And Logistics TBD

Cost And Pricing StrategyAs the product and business are undergoing preliminary research, costs and prices are yet to

be determined. No research has been conducted regarding customer’s willingness to pay and

thus, must be uncovered before a thorough cost and pricing strategy can be developed.

Although no cost breakdown is available, aspects of the cost and pricing strategies can be

considered. This includes but is not limited to costs associated with the blueprint, USSD code

system, marketing and customer acquisition, and legal costs regarding running a distribution

service business.

Currently, two potential revenue streams have been identified.


1. Payment for the blueprint and consultancy service. Farmers may purchase the blueprint

either through an upfront payment or a payment plan based upon their financial ability.

They could also purchase the consultancy service through a subscription payment plan

thus, ensuring ongoing revenue for the business.

2. Selling the distribution product to farmers and business to business consumers through

a subscription service. A suggested system to manage this is through USSD mobile

banking. This is advantageous in that it does not require internet connectivity and is a

technology that is widely common across Malawi. However, more research is required

as USSD mobile banking may not be viable.

Financial Analysis And Reporting

TBD

Contingency Planning

An area of concern is the role that Agricultural Extension Officers play in local communities.

They may attempt to disseminate Project Everest's methods and findings for free, which may

result in smallholder farmers being misinformed as the methods have not yet been proven. The

relationship with the District Commissioner’s Office and the Agricultural Extension Officers will

aim to alleviate these concerns.

Connections with the Bvumbwe Research Station and other secondary research institutions

are still in in early stages. Care has to be made to maintain these relationships and ensure we

are returning value to them. Without their support, it is unlikely that blueprint designs can be

made to a high standard, and other methods such as purchasing information may be needed.

Small-holder farmers are risk averse and therefore lack the capital and resources to afford

investment into new farming methods and techniques. To overcome this issue the products

could potentially be sold through affordable payment plans which break up the costs into small © XYZ For Good Pty Ltd T/A Project Everest 2018 18

and regular fees. This increases the opportunity for small-holder farmers to invest into their

farms. Moreover, effort must be placed to ensure that the blueprint and its methods are

thoroughly researched and tested before its implementation. This would also benefit from

endorsement from the Department of Agriculture which can be attained through maintaining

the relationship.

Future Actions/Next Steps

Analyse and sort Farmer and B2B surveys

● Continue conducting a consumer typology analysis through the use of Pen Portraits. See

appendix for more info.

Acquire more secondary data

● Continue to collect data from research stations and other stakeholders with a focus on

the viability of the blueprint/ consultancy and the distribution service.

Maintain relationships with key stakeholders

● Continue to identify opportunities in the distribution services and maintain these

relationships across the month.

● Maintain relationships with research based stakeholders as these will be crucial moving

forward.

● For this please refer to the appendix and hubspot


Implement 7-step Framework

● Consider looking into the “7 Step Framework” for data gathering for progression with the distribution chain analysis (refer to pg. 5 of the document in the link.)


Glossary

Smallholder farmers - farmers who operate on small plots of land, who produce food for themselves and maybe a small amount for the market

Holistic approach - a solution that aims to resolve all key issues farmers face, rather than one part of the problem

Blueprint - the product name given for the farming plan and information booklet for the farmers, designed to step farmers through a process for their farm layout

Maize SC403 - a Maize variety highly available in Malawi that gives good yield returns for the climate, especially in dry conditions

Rodade Seed Co - Seed company in Malawi

Mayford - seed company from South Africa, seeds available in most stores but are in small batches (made for garden purposes)

Bvumbwe Research Station - Research station in Bvumbwe, government run and takes on projects that suit Malawi

Design Thinking Process - method of approach to design the product offering, following the process of empathise, Ideate, Prototype and Test

Nsambudzi - region where farm is located, see map in Handover appendix for location (20

minutes northeast of Lunzu)

Best Practice - recognised methods that are acknowledged and proven to deliver the best

results

Roseberry Farms - Ruth’s farms who operate as contract farming in Bvumbwe


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