about business rural diversification

In most cases, the most successful way to ensure that one remains on the rural businesses is to learn how to diversify their businesses. Looking at the larger picture when running one’s day-to-day business can be very difficult in some cases, necessitating the guidance of numerous professionals who specialize in business. Every society has a team of specialists who have specialized in business. Every team that deals with the diversification of businesses in the rural areas may be said to be speaking the same language when it comes to advising individuals to do business (Estruch et al 2013 p13). Whether one is a sole trader or running large companies, the experts can give useful advice from time. The business that most rural areas in the world specialize in is the agricultural business. It is important to advise most farmers in the rural areas the importance of diversification in trade. However, the process of farm diversification might not act as a guarantee that one might be successful in the business at the end of the day (Estruch et al 2013 p13). If one is not sure whether they should or should not diversify their businesses, they should ensure that they get advice from experts. Most of the experts offer the diversification advises at a fee. The advice can also be offered by banks, governments or accountants. This paper identifies the key issues that the professional advisors might take into considerations when they are advising an individual on the correct measures to take when they want to ensure that they get to know the correct intervention when they want to diversify in business. The paper places its main focus on diversifying on the non agricultural activities in the rural areas.

Review of resources

Farming is the main business for most individuals who work live in the rural areas. According to the rural development policies, it is required that the development of the non agricultural sectors in the rural areas is developed before 2013. In regard to the resources that already exist in the farming sectors, one can easily find out the most appropriate way in which they can invest in other sectors apart from Agriculture. Any form of business that generates income can guarantee an individual profit at the end of the day. The rural areas suffer from the problems that relate to the growth of the economies, the sustainability of the economies and the creation of jobs within the regions (Hussein 2016 p 20). It is estimated that about of nineteen percent of the individuals who live in Europe basically reside in the rural areas. The income of those living in the rural areas is generally lower than those living in the urban areas. The income opportunities are minimal in the rural areas especially for the youths and women. Rural areas have the potential of offering a vast number of opportunities to the disadvantaged groups.

Farming is the main business in the rural areas gets engaged in. They get engaged in the business because the land in the rural areas is considered fertile. The soils have not been so much polluted as compared to the land in the urban areas because they are less exposed to the chemicals. The population in the urban areas tends to be relatively high and this in most instances result in the production of more wastes that pollute the social that may be very useful in farming. The rural areas have no many roads as compared to the urban areas. Therefore, there are lower possibilities of plants being affected by the emissions that come from vehicles. However, the idea that those in the rural areas depend on farming as their major business makes their potential markets to diminish. Everyone in the rural area becomes a potential seller than potential buyer and this may make them suffer losses after a hard work in the farms. It is important that they diversify the businesses that they engage in.

The rural areas are not much industrialized. As a result, it has a lot of natural resources that can act as a major source of attraction for tourists. The forests that may be well endowed with wild animals might sometimes serve as the major source of the attraction of the members in the country as well as those who are outside the country. The rural areas act as the reservoir of the valued landscapes as well as the natural resources (Brock, 2016 p 30). Rural development policies dictate that individuals need ensure that invest in all the possible diversified businesses. The diversified businesses help not only in providing revenue to the rural governments but also to the creation of more employment opportunities to them. The major aim for the project is to ensure that there is the increase in the income that the households normally get at the end of the day.

The major aim for the project would be to support the activities that generate revenue to the community that would not involve agriculture. Among them involves provision of services like providing education to the members of the rural communities. It may also involve the engagement into other businesses like craft activities. The artisan activities help in the production of local products that can be used within the rural areas (Brock, 2016 p 30). The local products might include pottery and other farming equipments that are useful within the rural areas. The programs for development of new business idea and the expansion of the micro-enterprises that already exist through the formation of business groups may also act as an intervention that may play a great role in development of various businesses through soliciting of funds through donations. Tourism tops the list of the businesses that can be used to ensure that the economy of various regions is maintained at their top. Most of the rural developmental projects that are outlined by the rural developmental policies check on the improvement of the tourism sectors.

SWOT ANALYSIS

Strengths

Most individuals in the cities have their backgrounds in the rural areas. The individuals can be convinced by their relatives and friends to ensure that they invest back into their rural areas. The rural areas have the natural resources already which can be great source for tourist attraction. There is no cost that needs to be incurred in the bringing of more natural resources in the places. The resources that are locally available can be used in the businesses. The rural areas already have the natural landscapes that have not been interfered with as the lands in the urban areas that have been altered to fit in the building projects that are necessary for the development of the urban centers (Brock, 2016 p 30). The rural areas also have the government interventional projects that are already put in place in some areas. Among them is improving the businesses that relate to tourism. The governments normally provide the funding through the outlines that are present both in the regional and the national budgets.

The rural areas also serve as a great resource in ensuring that the culture of various groups of individuals is preserved. It might serve the region in which the anthropologists find to be most interesting if they want to study the culture of a particular group of individuals effectively. Once the tourism facilities are well established, the rural areas should expect a great number of individuals who have interests in knowing the culture of various groups of people. Culture serves as an important factor in explaining the relationships that exists between various groups of individuals in the society. The culture can also help in the determination of the relationship that might exist between different groups of people in the society.

Weaknesses

In as much as tourism might be the major business that the rural sector might invest in apart from the agricultural sectors, transport might be a major barrier in the establishment of the project. There might also be no strict business establishment rules within the region that the investors might prefer- This might create imbalances in the import and exports of products in the regions according to the input-output models theories. The lack of transport is the major cause of poverty in most rural areas (Senadza, 2014 p 75). Lack of transport not only acts as a barrier to the foreign investors but also to the locals who have interests in the getting advantage of the markets that are not in the rural regions. Also, in as much as there might be well organized education in alerting the individuals in the rural regions concerning the importance of business diversity, the finances to make sure that the plans are put in practice might not be available. Not everyone is going to accept the changes that need to be put in place in the rural regions; the projects would get a lot of criticism.

Opportunities

The land in the rural region is quite big and relatively cheap compared to the lands in town thus all individuals can easily acquire it. The living standards in the rural areas are relatively low. Therefore, the investors can be somehow sure of relatively cheaper labor for their business premises compared to urban areas. The governments are also trying to ensure that there is diversity of businesses in the rural areas which would help in ensuring that there is diversity in businesses in the rural areas. Thus, the investors are likely to get financial boosts from the governments (Senadza, 2014 p 75). They might also get reduced cost in terms of the revenue they have to pay to the government to start their business. The business owners should also utilize the diversity opportunity because they are likely to face less competition compared to the urban areas. For instance, there are few or no recreational facilities in the rural areas. The individuals who choose to invest in such business in rural areas are not likely to face stiff competition. The first investors are also likely to get the patency rights to operate their businesses in a certain stipulated time period.

Threats

The potential threats of having tourism as an alternative business in the rural areas is that not all of the tourist might have interest in the region thus, there might be no enough customers at the beginning. Another potential threat is that in as much as there might be more investments in the region, the roads might not be good enough to be preferred by the tourists. The identified rural areas might be flooded by foreign investments other than the member of the local regions thus there is high probability that the residents of the rural region might not benefit so much from the intervention (Senadza, 2014 p 75). The climates in the rural regions might also not be welcoming to the visitors and this might serve as a great turn off to them. The sanitations in the rural areas might also serve as a great turn off to foreigners who want to invest in the region.

Appropriate Enterprise

The opportunity in the rural areas that need to be addressed in terms of business diversification is the tourism sector. The sector needs to be looked at keenly to ensure that the economic environments are well improved. Hotel is the main business enterprise that an individual might opt to establish in the region to ensure that the tourists who come to visit the regions are accommodated.

Physical plan

Stage of Development Section

Production workflow

The workers are expected to work according to the rules that are stipulated to aid in the running of the organization. The hotel would need a Human resource manager as well as the managers of other specific departments. The departments in the hotel would include the finance department, hospitality department and the reception departments among others. Among the major problems that are likely to affect the running of the hotel is getting the employees who have requisite skills to be able to understand other languages that are different from the local languages.

Industry Association Memberships

The business would expect the visitors from various parts of the country and the world at large. It is expected that the business would obtain permits both in the rural governments as well as the national governments.

Supply chains

The rural areas majorly depend on agriculture as their major business. The food supplies would come from the rural communities. Products that cannot be obtained from the surrounding rural environments would be obtained from the urban areas.

Quality

Before the business operates, the premise would be inspected to ensure that it meets the requirements of the International standards. This is to ensure that all the customers are served better.

Production Process Section

General

The business would be on 24/7 in order to be able to get as many customers as possible as long as not all the spaces are filled.

The physical plant

The business would include a building which would have a space that is around 200m by 200m. The building is expected to accommodate about fifty visitors at the same time.

Equipment

The basic equipments include the beddings which are expected to cost $350 each. Television would be fifty and the cost of each is expected to be $700. The total budget for the business is approximated to be about one million dollars.

Assets

The assets of the business would include the building and the land around the building.

Cost estimates

The business is expected to cost around one million dollars.

Evaluation of the market demand

The potential market is the foreigners in the rural areas. There is no competition from competitors as the urban sectors because the hotels that can accommodate the foreigners are rare. The prices can be made affordable for those in the country and those who are outsiders. The price would be set according to the prices regulated by the national governments. The business would be ready to work with the projections that also given by the local governments that rule the rural areas.

Financial plan for the enterprise

(In the excel file)

Feasibility of the financial and the physical plans

The start cost for the business is expected to e relatively high. This is tied to the fact that the land and putting the building into place would require a lot of startup capital. However, the cost of running the business would be lower given that the structures that would be required in running the business would be permanent. The only cost that would be incurred in the end of the day is the maintenance costs which would include paying the employees working within the premise.

References

Brock, K. and Coulibaly, N., 2016. Sustainable rural livelihoods in Mali. Institute of Development Studies.

Estruch, E., Grandelis, I. and di Caracalla, V.D.T., 2013. Promoting economic diversification and decent rural employment towards greater resilience to food price volatility. Food and Agriculture Association (FAO) Discussion Paper. http://www. fao. org/fileadmin/user_upload/fao_ilo/pdf/Papers/DRE_Food_Price_Volatilit y. pdf.

Hussein, K. and Nelson, J., 2016. Sustainable livelihoods and livelihood diversification.

Senadza, B., 2014. Income diversification strategies among rural households in developing countries: Evidence from Ghana. African Journal of Economic and Management Studies, 5(1), pp.75-92.