Identifying the business opportunity
Posted Wednesday, January 29 2014 at 02:00
The idea for our business transformed from making money for ourselves outside of an office to empowering the smallholder farmers we watched struggle at the market on a daily basis. Other farmers and traders would laugh at us when we said we were farmers. In fact, a few weeks ago, Eric met a policeman and when he said he was a farmer, the cop snidely stated “Oh! So, you’re a peasant!”
Good conditions, bad attitude
Farming in Uganda has become synonymous with poverty. It is not seen as a viable and sustainable form of income generation. And that is because with the common staple crops and fruits and vegetables grown here, it is not.
We set out to find a product that had value and shelf life so that farmers could understand that what they were growing had worth and that they could not be told otherwise.
This was how we came to grow passion fruit. After thousands of hours of research, we learned that 70 per cent of the passion fruit in Uganda came from Kenya. With fertile soils and high altitude, Ugandan farmers could be fully capable of meeting demand if equipped with the skills and inputs to grow the high value fruit. Our farm is 23 acres; currently we have five acres under drip irrigation with passion fruit. Eric’s father had purchased the land in the early 1990s. It remained unused until we moved there in early 2011.
Learning the hard way
Initially, we pooled together our savings, went to Fort Portal, and thought we would make it big.
We don’t even want to tell you the amount because we essentially lost everything in what was an expensive learning experience. We did not really know how to manage our staff. We had a lot stolen from us. We turned to Google rather than an agronomist to manage our crop.
In early 2012, we had learned invaluable lessons. We had visited passion fruit farms in Kenya, met with hundreds of other farmers and businessmen and put together a business plan. Unfortunately, we had no money left. By March, we gave ourselves three months to find an investor before we were going to pack up our dreams of farming and go back to more typical jobs.
We had a very hard time securing an investment; companies liked our business plan but there is a gap in funding in Uganda. There is microfinance, or companies that want to fund projects $200,000 plus (Shs50m).
We were asked if we could scale up our plan to be a bigger investment, but we did not feel comfortable doing so without a proof of concept.
After what seemed like hundreds of meetings we were introduced to The Mango Fund—an amazing group of investors who seek to fill this gap looking at projects in the range of $5,000 (about Shs12.5m-$50,000 (about Shs125m).
We were given an investment of Shs45m Uganda shillings which we used to build a well and 28,000-litre water tank, install drip irrigation and trellising for five acres of passion fruit. We could afford and indeed hired an agronomist from Kenya.