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Franchise Agricultural Supply Businesses

If you’re considering opening your own agricultural supply business, here are some facts and figures you may appreciate.

If you want to start an agricultural supply business, you could choose to start your own company from scratch, buy an independent business for sale, or buy into an established franchise.

All these options have their pros and cons, so the decision requires evaluating the similarities and differences, and making a personal decision based to a large extent on gut feeling. It’s important to collect plenty of data and expert recommendations before making a rash decision, though, and that’s where this brief guide comes in. 

Potential challenges facing independent farm supply businesses

While opening a brand new farm supply business may fill a legitimate need in your local area, that won’t eliminate all the effort, expense, and risk that comes with starting any new small business from scratch. Especially if you’re new to the industry, you can run into some costly — even devastating — challenges as you navigate the learning curve.

Buying an agricultural supply business that’s already established can be a safer bet at the start because there’s an established brand identity and customer base. But, in that case, you’re relying on the previous owner’s efforts to establish strong supplier and customer relationships, differentiate the company from its competition, and leave the business on solid financial footing. So, you’re still going to have a struggle on your hands. And, you’ll be doing it alone.

Finally, owners of both business types will need to battle huge box store competition like Tractor Supply Company, Southern States, Rural King, and a host of smaller regional chains. These chains are wholly company owned and operated, so they don’t represent franchise opportunities themselves. But, their hard-won brand equity and market share make for serious competition in any overlapping service areas.

That all being said, buying a franchise farm supply store can mitigate many of those risks, offering entrepreneurs a much better chance of success.

Why choose a franchise agricultural supply business?

So, how would buying into a franchise help your new business stand out and succeed under those conditions?

Faster, more efficient launch

The key benefit of opening a franchise location is the turnkey nature of the launch period. An established franchise can have everything in order — from real estate and vendor sourcing to detailed instructions and guidance — so you can be up and running far sooner than would be possible otherwise.

Pre-programmed financials

While no business venture is without risk, an established franchise can significantly reduce the largest financial question marks because you’re tapping into a system that’s already proven successful. As a result, you can better predict cash flow, return on investment, and other important financial details about which most brand-new startups can only make educated guesses.

Additionally, the franchise arrangement provides the support of a parent company and other successful franchisees, all of whom are eager to see you succeed since your success enhances their own.

Co-op marketing

Another valuable benefit of being part of a franchise is the marketing and advertising power wielded by the parent company. While an independent business owner would need to create, distribute, and pay for all their own marketing and advertising — or pay to have someone else handle it — right from the start, you can plug in to a program that already has greater reach and established brand value than you could achieve on your own. The parent company’s main goal is to continually enhance brand recognition, and many also invest in lead generation for their franchisees.

A turnkey system: strategies, products, and processes

Buying into a franchise gives you access to an economy of scale that independent stores can’t match. While lower costs for goods sold is an important factor, this also applies to the knowledge and experience a franchise organization is able to develop over time.

If the company is run well, they will constantly improve their business processes and strategies based on collective trial and error. So you, as a brand new franchise owner, can make business decisions right away that only years of trial and error could have taught you.

This allows franchises to potentially bring new products to market faster, optimize processes more effectively, and arrive at the most effective strategies as a group rather than having to learn independently through trial and error.

So, does buying a franchise agricultural supply store sound like the right fit? Get started today by checking out the available listings here at BusinessesForSale.com.



Bruce Hakutizwi

About the author

USA and International BusinessesForSale.com Manager for BusinessesForSale.com, a global online marketplace for buying and selling small medium size businesses. The website has over 60,000 business listings and attracts over 1.5 million buyers to the site every month.

@BizForSaleUS

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