Why Your Agribusiness Needs a Business Model that Works
A few years ago, a small company — launched with a dream: to bring fresh, locally sourced food back to people’s tables. The idea was inspired by a childhood memory of the founder. But it wasn’t just about nostalgia; the goal was to nourish the population, support local producers, and build a new kind of industry — one that is fair, ethical, and lasting.
From the onset, the company built an integrated value chain. It sourced raw materials directly from rural producers and employed local youth, equipping them with tools and training. It also established collection points, storage hubs, transport systems, and a factory that transformed raw produce into finished products – all delivered to customers under controlled conditions.
The company didn’t stop at production. It also provided financial literacy and technical support to its supply partners. It ran community training and supported household inclusion. It looked and felt like the kind of business the world needs to be saved.
Yet, the company shut down.
In a farewell note, the founder made it clear: it wasn’t the mission that failed. It was funding. Every option had been exhausted. But in a tough economic climate, the business simply couldn’t carry the weight of its operations or grow into its next phase.
There’s no doubt Company X created value. Supplier incomes rose. Yields improved. Households were better off. But beneath these achievements lay a harder truth: only a few of the outcomes translated into stronger revenue or lower costs. Others, while meaningful, created pressure. Higher supplier income may have raised procurement costs. In other words, a better quality of life didn’t boost sales or drive higher margins. In trying to deliver development outcomes, the company built a model it couldn’t afford to run.
This story is not uncommon. Many mission-driven ventures go all in on impact, hoping that doing good will be enough to sustain them. But impact is not income. And if a business can’t survive, it can’t continue to do good.
The lesson is simple. If you want to make a difference, you also have to make money. The world needs ethical companies, but it also needs them to last. The core lesson is that a mission needs a model; purpose should therefore be backed by profit.
How can a purpose-driven business build a sustainable model?
First, it is important to understand that impact alone doesn’t pay the bills. Helping people earn more or save time creates real value. But unless that value returns to the business — as revenue, cost savings, or customer loyalty — it is not sustainable. Better resilience, fairer prices, or happier communities are good outcomes. But if they drive up costs without a way to recover them, the business weakens. Always ask: how does this impact convert?
Second, the approach to timing is very crucial. Many startups begin by strengthening supply: building networks, improving quality, and training producers. But that accomplishment is often at the cost of necessary investments like marketing and sales. Suppliers are relevant, but without paying customers, there will be no business to supply.
Third, there is a need to realise that impact is obliquely tied to financial discipline. Moving to paid services, linking wages to performance, and cutting unnecessary costs may feel like a departure from the mission. Yet, these decisions are essential for continual survival and serviceability of an establishment. A company that cannot stay afloat cannot continue to serve its community. Therefore, survival, in this context, is not selfish; it is the foundation for long-term impact.
Finally, impact and financial health must be tracked with equal attention. It is not enough to count lives touched or communities reached. Founders must also monitor margins, burn rate, and unit economics. Investors want to understand not just the change being driven, but what it costs to deliver and its sustainability.
In the end, doing good and doing well must go hand in hand. Profit is not the enemy of purpose; it is what powers it. A strong mission may inspire, but a sound business model is what keeps it alive.
