Entrepreneurship

Entrepreneurial 
businesses evolve 
through five phases:
Establishment

Survival

Early growth

Rapid growth

Maturity 
Moving from  
pre-start to survival  
is a major milestone  
for a new farm 
business
Understanding entrepreneurship in farming 
11
ENTREPRENEURSHIP DyNamICS
The idea of entrepreneurship is complex. When a farmer 
introduces a new enterprise into his farming system, there 
are different stages of development that the enterprise 
goes through. The skills of the farmer must also change 
and develop to meet the management demands of the 
enterprise. 
 
The development of a farm enterprise as a busi-
ness occurs in five phases: 
•  Establishment
•  Survival
•  Early growth
•  Rapid growth
•  Maturity (and possible decline)
Establishment: The organisation of the business at this 
stage is usually quite simple. Challenges relate to market 
potential, the motivation of the farmer, the availability of 
resources  and  basic  business  skills.  Farmers  require 
skills to negotiate with banks and other agencies in order 
to get the assistance they need to establish their new 
enterprise. The key questions are: 
•  How can this become a profitable business enterprise?
•  How will it impact on my farm as a whole?
•  How can I establish a market?
•  Do I have enough money to cover the cash demands
in setting up the enterprise?
 
During this stage, the organisation is simple and 
the farmer has to do most everything himself. The focus 
is on making sure the product is produced, gets to market 
and is sold. Since it is the first time he is producing this 
product,  everything  is  new.  Many  new  enterprises  do 
not survive the first season of production and marketing. 
Those that do, enter the survival stage.

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