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Posted on May 24, 2013 @ 12:01:00 AM by Paul Meagher
Many entrepreneurs go into business thinking they just have to develop a product or service the public wants and they will be successful. This is not the case in agriculture and it is often not the case. Why not?
In any industry there are gate keepers, established industry players, who can make it more difficult than it should be to sell your product or service. In agriculture, many entrepreneurs ignore the gate keepers only to have it bite them as they try to grow their business.
For example, I was reading about a local farmer who was raising chickens according to a pastured poultry farming system. Pictures of the farm (see below) show a large fence with happy chickens milling about feeding off the grasslands with lots of space to roam about. Their grass diet adds lots of valuable omega vitamins to the eggs they produce. Their droppings also increase the fertility of the land. It all appears very eco-friendly and one would think the entrepreneur deserves to be successful for raising his chickens in such a humane and healthy environment and also because he has grown a large consumer base that wants his pastured-poultry products. Unfortunately, the farmer did not consult the egg police, otherwise known as the Egg Marketing Board, about his operation. If he had consulted them, he would have learned that he was only allowed to freely raise 100 chickens and sell their products. After that, he is obliged to join the Egg Marketing Board to obtain a quota to sell more eggs. It costs about 200 to 250 dollars per chicken for additional quota, which he may or may not be able to obtain from the board. In order to obtain that quota, he needs to reduce his flock to 100 or less birds and then apply for quota. Half of the farmer's income comes from his pastured poultry so the egg police now have him over the proverbial barrel. I would not want to be in his position now.
One of my favorite farm entrepreneurship authors is Joel Salatin who broke into the bigtime when he wrote a book called "Everything I want to do is Illegal". In this book he recounts all his battles with the various gate keepers he has had to deal with over the years to stay in operation. I recommend that you read this book to appreciate the hurdles that many farmers have to jump through to sell their products.
The lesson generalizes to most businesses. In most lines of business there are gate keepers, established industry players, who represent a "barrier-to-entry" for businesses attempting to grow into that space. Many businesses are like farming insofar as you may think you have the freedom to simply produce a high quality product or service, find paying customers, and you will be successful. The mere fact that you can produce something of exceptional quality, and find customers for it, should be sufficient grounds for you to be successful. That is often not the case because there are often lurking gatekeepers who require your money and time before they will let you grow beyond a certain size.
As you grow your business you might need to spend time identifying who the gatekeepers are, the nature of the gates they have setup, and the toll that is required of you to navigate through their gates. Failure to do so is could put the brakes on your growth.
As your business grows, you should allocate some time to identifying any gatekeepers who might stand in the path to further growth. As entrepreneurs we like to think we are free to operate as we choose and have chosen this lifestyle for that reason. The reality is that there are often gatekeepers who have bureaucratic and financial hoops that they expect us to jump through. If we do not acknowledge them, our business growth could stall even though we are offering a high quality product or service.
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