Foundational Business Farmer

He wanted ₦15.85 million to grow his poultry business. But when the investors asked him to explain how he would spend the money, the numbers started falling apart. When Adeyemo Amos walked into Lions’ Den Nigeria, he was pitching Modern Barter Concepts, a business registered in January 2019. His idea was interesting. He had noticed that some customers could not afford to buy a whole chicken because of their financial situation. His solution was to allow different people to share the cost of a chicken, making it easier for them to afford. Now, he wanted to expand his poultry business and raise 5,000 birds in the following year. For this, he was asking the Lions for ₦15.85 million in exchange for 40% of his company. But there was a problem. When the investors asked how he intended to spend the money, Adeyemo explained that ₦7.6 million would go into production. The remaining amount would cover renovations, land leasing, freezers, weighing scales, grinders and vehicles. The more he explained, the more questions the investors had. How much would the vehicles cost? Why did he need two cars? Why was he leasing another property? And how much money would remain for the actual business operations? Then came another question. Adeyemo had reported ₦1.2 million in revenue from the previous year, during which he said he had raised about 1,000 birds. One of the investors questioned the difference between that revenue and the potential value of 1,000 birds at ₦3,000 each. Adeyemo explained that he had experienced health challenges and that some birds had been lost while someone else was looking after them. The explanations did not resolve the investors’ concerns. One after another, they declined to invest. Here are the Street MBA lessons. Let's break it down. 1. A good business idea still needs a clear execution plan. Adeyemo had identified a real problem: some customers could not afford a whole chicken. Allowing people to share the cost could make the product more accessible. But how would the arrangement work in practice? Would customers buy a whole chicken together and divide it among themselves, or would the business process the chicken and sell smaller portions? How would the business store the meat, maintain food safety and manage unsold portions? These questions matter because the solution must work operationally, not just sound attractive. 2. Be precise about how you intend to spend investors' money. Adeyemo was asking for ₦15.85 million, with ₦7.6 million allocated to production. That left ₦8.25 million for the other expenses. But during the pitch, the investors struggled to get a clear breakdown of those expenses, particularly the cost of vehicles, freezers and leasing another property. When you ask someone to invest in your business, you should be able to explain how every major part of the funding will be used. You should know what you need, how much it costs and why it is necessary. A budget is not simply a list of things you want to buy. It is a financial plan showing how the money will help the business achieve its objectives. 3. Revenue must be supported by your production records. Adeyemo reported ₦1.2 million in revenue and said he had raised about 1,000 birds. One investor questioned why the revenue appeared low compared with the potential sales value of those birds at ₦3,000 each. However, raising 1,000 birds does not automatically mean selling all 1,000 at that price. Some birds may die, some may remain unsold, and actual selling prices may differ. The important thing is to have records that explain what happened. How many birds were raised? How many survived? How many were sold? What was the average selling price? How much did it cost to raise them? These figures help an entrepreneur understand the performance of the business and help investors determine whether the business is worth funding. 4. Don't confuse business expansion with buying assets you may not need.

A bag of flour was sold for ₦13,000 at Akinyele Market today. I always tell people: hold the middlemen accountable for the rising cost of farm produce. Farmers are genuinely doing their best to keep food affordable for everyone!