When Farm-to-Table Was Too Risky

All businesses have risk, especially new businesses. There are things that new business owners can and should do to mitigate the risk, but often don’t.   At the top of the list: make good business decisions based on industry knowledge.

 

It is much easier for a new business owner to make well-informed decisions if he or she has a deep knowledge of the industry they are entering.   And this is why many business advisers will suggest if you are thinking of starting a business in an industry with which you are unfamiliar, you first should spend some time working in that industry, even in an entry-level job.   Failing that, other ways to gain additional industry knowledge are to attend trade shows, or talk to a business adviser who has worked in that industry. If you don’t have the budget to hire a consultant, try speaking to a SCORE counselor.

 

If you have a choice between launching two different new businesses, and you have prior industry experience in one, give that choice first consideration. I had a conversation some years ago once with an individual who wanted to raise investor funds to start both an organic vegetable farm and a nightclub simultaneously. The big idea: the organic vegetable farm would supply the nightclub with organic vegetables to serve to patrons. The individual had some prior exposure to farming, but everything about owning and operating a nightclub would be new.  Either business would be a lot to learn, so it was better to choose just one, in his case, probably the farm.

 

The current issue of Inc. magazine has a cover article “The art of the pivot.”  It is one thing for Howard Schultz to come back on board at Starbucks and manage a “pivot”, but as a new business owner, hope you won’t have to do any pivoting your first few years, you may not have the needed financial resources. And with the right initial decision-making, it hopefully won’t be necessary to do a pivot.