The manufacturing of agricultural equipment involves the mass production of farm machines. How to Start Agricultural Equipment Manufacturing in Nigeria.
But the process of producing a farm machine starts long before the assembly of the machine takes place in the factory.
To ensure a successful manufacturing process, the aspiring entrepreneur must make certain consideration and take certain steps before even thinking about the cost of production.
The excuse given by most entrepreneurs about their inability to start any factory or agricultural equipment manufacturing business in Nigeria is that the cost of establishing such an organization is very high.
They even go ahead to say that because of the high cost of establishing such businesses is high, banks and other financial institutions are very reluctant to give them financial aid.
While there are some elements of truth in such statements, the concerned entrepreneurs are very guilty of negligence.
The negligence to carry out the activities that will be explained in this article. These activities are very important in that if they are carried out accordingly, the entrepreneurs might discover that the process may not be as capital intensive as feared at first.
And even if the initial idea was really capital intensive, taking these steps might lead one to other alternatives that are more cost effective than the initial idea.
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Steps Involved in Starting an Agricultural Equipment Manufacturing Business in Nigeria
As stated in the introduction, the process of starting the manufacturing of a farm machinery or farm tool starts before the actual fabrication process or assembly of the item takes place that is the process of manufacture of an agricultural equipment takes place long before the raw materials of that machine are even brought to the factory for fabrication and assembly.
It starts in the form of an imagination in the mind of the entrepreneur. To start the manufacturing process in Nigeria, the you as an entrepreneur must take the following steps:
Decide on the type of Agricultural Equipment to Produce
The first step to be taken by you as an entrepreneur is to decide the type of agricultural equipment to manufacture. Skip this step and no production will take place.
In trying to determine the type of agricultural equipment to produce, you must seek to answer some questions. Questions like what problem is this equipment trying to solve? What local farm tool is this agricultural equipment trying to replace?
What are the functions of these farm equipment? Is there a need for this equipment in the first place? Once these questions are answered, you should then proceed to create or draw a sketch of the farm equipment on a sheet of paper. Then the sketch should be examined again.
If you as an entrepreneur is satisfied with the sketch, then progress can be made to the next step. It there are objections in your mind as an entrepreneur, more brainstorming should be done to modify the sketch.
Carry out a Market Survey
Next as a potential entrepreneur, you need to carry out a market survey to know if there is a demand for the agricultural equipment you are thinking of manufacturing.
You need to take this step because it is one thing for you to feel that farmers need your agricultural equipment and it is another thing for the farmers to know that they need the agricultural equipment you are trying to manufacture and demand for it.
Even if it is obvious that the farmers need your equipment but they do not demand for it, going ahead to manufacture your equipment will be pure waste of time.
So you need to know if your agriculture equipment is really demanded by the farmers. You do this by carrying out a market survey.
A market survey can be carried out by giving the concerned farmers questionnaires to fill. The questions inside the form should be directed at the problems the equipment is aiming to solve.
Also a question should be asked whether the farmers are open to purchasing a machine that could help them to solve that problem.
Another way to conduct a market survey is to meet with the leaders of the farmers’ association to help you as an entrepreneur collect a feedback from the farmers.
After conducting a market survey, the next thing to consider is if a machine or equipment you are trying to manufacture already exists. If it exists, how can you make it better? What are the unique features you can add to your own agricultural equipment? Once these questions are answered, you can move on to the next step.
Design your Agricultural Equipment
After concluding that there is a great demand for your agricultural equipment, the next thing to do is to design your equipment on a drawing sheet.
Designing means drawing your agricultural equipment with the appropriate measurements and dimensions. You will need to carry out more research for you to be able to produce a realistic design of your agricultural equipment.
Your research activities will involve reading more literature to gain knowledge that is related to the agricultural equipment you are trying to design.
If you are trying to create an equipment which is an upgrade on the one existing in the market, you will have to get more information on the existing equipment to know some of its limitations.
Then your design will try to solve the problem posed by the limitations of already existing equipment found in the market.
Then when you are through with your design, you can evaluate it in the light of the challenges your proposed equipment will face on the farm.
Now if you cannot produce or design a farm equipment because you lack the knowledge and training to do so, you can approach an expert to do it for you.
The only thing is that you will have to discuss your compensation package with the professional because patent issues might arise as a result of employing the services of that specialist.
Sourcing for Raw Materials and Personnel to carry out the Fabrication of your Agricultural Equipment
After producing the design of your agricultural equipment, the next thing to do is to decide where to get the raw materials needed to fabricate and construct your equipment.
But before you do this, you must know whether the raw materials to be used for the construction of your equipment is locally available or not.
If it is not locally available, you will need to factor in the cost of importing the materials from another country. At this point, it should be noted that the raw materials of some common household items or gadgets is usually sourced from different parts of the world.
For instance, the raw materials used for the construction of the computer is sourced from different places in the world.
Why I am making this statement is to make you realize that the fact that the raw material you might need to produce some parts of your agricultural equipment may not be present in your locality or country.
And this is not an excuse for you not to continue in the process of manufacturing your agricultural equipment. If you are confronted with this situation, you should compare the cost of getting the raw materials and transporting them with the price at which you intend to sell your agricultural equipment.
If the cost of obtaining the raw materials for your agricultural equipment is not much, you can still continue with the manufacturing process.
Once you know how to get the raw materials that will be used to construct your agricultural equipment, the next thing is to look for the professional that will do the fabrication and the construction of the prototype of your agricultural equipment.
You will need to do this to know if such professionals are available in your locality or not and how to get such get access to such professionals if they are not present in your locality (maybe your town or city of residence).
Also you will need to know the cost of employing the services of such a professional. One thing to note is that the professional can even help you to source for the raw materials needed for the construction of your agricultural equipment.
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Build the Prototype of your Agricultural Equipment
At this stage you carry out the fabrication and construction of your agricultural equipment following the design you have produced on your drawing sheet.
You do not have to do the fabrication and construction yourself. There are lots of skilled manpower in Nigeria who can do this for you.
All you just have to do is to give them the design of your machine and supervise them. Then you test-run the prototype of your agricultural equipment once the construction is complete.
You must test the prototype to see whether the output of your equipment is really functioning the way you want it to be. Also you have to test to know the limitations of your agricultural equipment.
Then you compare the limitations or the disadvantages of using your equipment to the advantages. If the limitations do not outweigh the advantages or benefits of your agricultural equipment, then you proceed to the next stage. If the limitations are more than the benefits, you might have to see how to modify your equipment.
Determine the type of Manufacturing Assembly Line
Once you are satisfied with the prototype of your agricultural equipment, the next thing to do is to decide the method of manufacturing to be used to produce your agricultural equipment.
By using the phrase “method of manufacturing” I mean the steps involved in creating one item of your agricultural equipment, the workers and machines to be used and the arrangement and organization of the work.
Determining the manufacturing assembly line of your agricultural equipment will go a long way to know how to site the factory, where to site the factory and the size of the factory.
In this stage, you will determine the number of workers needed, the number of machines needed and how the work of production will be divided.
Questions usually asked in this stage are if the manufacturing process will be completely manual? Or will it be fully automated?
Or will the process be a combination of workers with machines? How will the work be divided? How many specialists are needed for the successful completion of the production of on agricultural equipment?
Write a Business Plan of your Agricultural Equipment Manufacturing Company
Now that you have determined the manufacturing method, the next thing to do is to write a business plan. Your business plan should include the following:
The proposed business name of your agricultural equipment company. Why the word “proposed” is used here is because, it is stilled assumed that your business is yet to be registered. Also the proposed location of your business could be included with the business name.
The problem your business is trying to solve on the farm. These should not be more than two sentences.
The agricultural equipment you are manufacturing to solve the problem on the farm.
Name your ideal customers which could be farmers or even potential distributors of your agricultural equipment.
Next list your competition. Your competition could be a company that is already producing the agricultural equipment you are trying to improve upon.
The financial summary of the sales and expenses to be carried out in the running of your agricultural equipment manufacturing company.
More detailed explanation could be given on the financial activities carried out by your company. Also the price at which you intend to sell your agricultural equipment can also be included in this section.
The capital required to start and run the business.
The progress made thus far that is the current status of your agricultural equipment manufacturing company.
Source for Capital required to start your Agricultural Equipment Manufacturing Business
Now you can then think of the capital required to start your business. Depending on your financial capacity, you might decide to start with what you have.
If you do not have the required capital, you can decide to approach the banks and other financial institutions to see if they can give you loans.
But some experts will advise that you get a high paying job that will enable you to save enough money to at least start your business.
If this does not work out, you can think of modifying the agricultural equipment to the smallest possible profitable product size and start from there.
Or you can think of modifying your business to the one that you can start easily looking at the limited resources at your disposal.
Determine the Location of your Agricultural Equipment Manufacturing Business
Look for a suitable location to site your agricultural equipment manufacturing business. The ideal place to site your business will be the closest possible place to where you can get your raw materials to reduce cost.
But if this is not possible, it is advisable to locate your business to the market that is where your agricultural equipment will be sold. This will reduce cost and also make your business easily accessible to your customers.
Register your Business with the Corporate Affairs Commission (C.A.C).
Now you can register your business with the Corporate Affairs Commission. You can start the process by registering your business name.
This takes a period of two weeks for the commission to check that the name chosen for your business is not already in use. Once it has been established that your business name is not yet in use, then you can start your business.
Now it is obvious that the process of starting an agricultural equipment manufacturing company in Nigeria does not begin by considering how much capital is needed.
Yes capital must be considered but this is not the first step. If one should follow the due process involved, one might discover that the issue of capital is a small matter.
So if you are having an idea of manufacturing an agricultural equipment in mind, go through the steps explained in the last section as recommended. You may then overcome your initial fear of starting your business owing to little or no capital.IMPORTANT!: Follow us on Instagram @InfoGuideNigeria
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