There is an increasing demand for modern agricultural machinery, across the globe. Hence, starting a farm equipment selling business can be a profitable venture nowadays. In this article, we have listed the essential steps to launch your business successfully.
Farm equipment selling is a profitable business both in rural areas and in suburban. Agriculture equipment caters to a wide range of products in different segments. Generally, farm equipment is a special type of hand tool, machine, or equipment that helps in agriculture and farming. Some of the broad categories are:
- Soil cultivation
- Planting
- Fertilizing & Pest Control
- Irrigation
- Produce sorter
- Harvesting / post-harvest
- Haymaking
- Loading
- Milking
- Animal Feeding etc.
Is Farm Equipment Selling Business Profitable?
Agriculture and farming are the evergreen industries globally. As the population grows, the urge for producing more food products will automatically grow. So, the requirement for agriculture equipment is also increasing. In addition, people always look for upgraded and effective equipment for getting better results.
Secondly, agriculture equipment manufacturing companies always want to establish a well-penetrated distribution network. And you can tap this opportunity easily. However, the Asia-Pacific region is the largest market for farm equipment. The biggest consumer countries are China, Japan, South Korea, and India.
The rising mechanization of farming equipment and increasing population are the factors propelling the growth of agriculture equipment in this region. Therefore, we can conclude, farm equipment selling is a profitable business for entrepreneurs.
6 Steps to Start a Farm Equipment Selling Business
1. Understanding the Market
Before starting a farm equipment business, it is critical to understand the market. Here are some major points to consider:
- Market Research: Identify the demand for various types of farm equipment in your region. Understand the needs of local farmers.
- Competitor Analysis: Analyze your competitors. Identify their strengths and weaknesses.
- Target Audience: Define your target audience. It could be small-scale farmers, large agricultural enterprises, or specialized farms.
2. Create a Business Plan
It is better to have some experience before going to start the business. If you are an absolute beginner in this industry, then conduct some market research. The local market demand for farm equipment depends on several aspects. These are agroclimatic conditions, soil fertility, locally grown crops, natural irrigation facilities, etc. However, you will need to find out the demand for the specific products in your locality.
After having the information, you will need to craft a business plan. Additionally, you must include the financial projection and marketing strategy. Generally, the amount of investment depends on the range of products you want to deal with. Determine your marketing and sales promotion strategy. In a full-proof business plan, you will need to determine several aspects. These are
- Executive Summary
- Management Description
- Market Analysis
- Organizing & Management
- Product Line
- Financial Projection
- Funding Request
- Marketing & Sales Promotion Strategy
3. Registration & Licenses
First of all, you have to register your business. Select a specific form of the organization according to the ownership and liability pattern. And then, register the business according to your state law. However, it hugely depends on the location where you are starting the business.
Check what are licenses and permission required in starting the business. As you will operate the business from a retail location, you must obtain permission from the Govt. authority.
In addition, talk to a local tax consultant. You must have a clear understanding of the upcoming tax liabilities and compliances.
4. Select Farm Equipment Selling Business Model
First of all, you have to determine the business model. However, there are several ways you can sell the items in exchange for profits.
First of all, and also the easiest option is taking a distributorship of a reputed company. In this option, you can apply to the companies that are looking for channel partners. And according to their terms, you can initiate the business. For every unit sold, you will get a sales commission. And the profit is really lucrative in this business. Additionally, the parent company generally takes the marketing responsibility.
Otherwise, you can procure the product from the manufacturers and sell them with your own price tag. In this option, definitely, you will be making more profit than the earlier option. However, this option demands substantial capital investment for commencing the business. Furthermore, you can also import farm equipment from other countries if you can secure a better deal than domestic companies.
5. Arrange Funds
After determining startup costs, you need to take steps to secure funding. You can explore different ways to finance your farm equipment selling business. It can be through personal savings, bank loans, or investors.
6. Select a Location
In initiating the business, you must have a retail location. Additionally, according to your product range, you will need to secure the area. Generally, you will need to have specific spaces for the specific requirements. The list includes the space for display, cash counter, customer sitting arrangement, and storage.
A roadside space with a wide display window and adequate parking space is the ideal location for this type of business. You don’t need to take the space in the heart of the city. Because farm equipment items are not impulsed buying products. Even, you can secure a space on the highway also.
7. Farm Equipment Selling Business Operation
Set up the store. You must provide a comfortable inside ambiance to your consumers. Additionally, pay attention to the product display. It is advisable to consult with an interior designer and craft a floor plan first. And then set up the store according to your exact requirement.
Then, you have to hire the right manpower, because you can’t run a company of your own. However, first, decide the scope of the engagement of staff. Determine their job responsibilities. And then start interviewing. Generally, in this type of business, you must have a sales team. They will promote the product and will concentrate to enhance the channel penetration. In addition, you will need to have floor staff, an accountant, and a mechanic also.
Procure the right tools for the smooth operation of your business. As you are running a retail store, you must have retail management software (POS). This software helps to operate the business with several MIS facilities.
8. Have a Marketing Plan
You must promote the business. And you will need to find out the low-cost ways to generate convertible leads. Additionally, you have to arrange the training and display facility for potential consumers. For large equipment like tractors, you have to show the farmers what benefits they will be getting. In addition, trade fairs and exhibitions are great places to promote your company.
Create a website for your company. Put the product list and contact details carefully. Additionally, you can also sell farm equipment from online marketplaces. However, the long-term success of the farm equipment selling business hugely depends on the customer relationship and the quality of the products.
Editorial Team at 99BusinessIdeas is a team of experts led by Rupak Chakrabarty with over 25 years of experience in starting and running small businesses. Started in 2010, 99BusinessIdeas is now one of the largest free small business resources in the industry.
