Agriculture Reference
In-Depth Information
Table 15.3 General risk factors for small-scale enterprises and expected impact on feasibility.
Impact on
Risk factor
Description
feasibility
Competition
Competition from local products
Medium
Competition from imported products
High
Quality
Poor product design
High
Poor product quality management
High
Costs
High input costs
High
Product price
High final product price
High
Transport
Quality of transport
Medium
Reliability of transport
Medium
Time to market
Medium/High
Infrastructure
Poor telecommunications infrastructure
Medium
Poor transport infrastructure
Medium
Market
Poor market acceptance
Medium
Small market size
High
Management
Poor overall business management
High
Poor financial management
High
Poor marketing management
High
Poor production management (related to quality and costs)
High
Resources
Low levels of investment into businesses
High
Poor availability of inputs, especially natural resources
High
Operating
Unfavourable operating environment for small businesses
High
environment
The enterprises are, however, vulnerable to their operating environment and the
management of the enterprises and sensitivity analysis of input prices, final
product prices and output levels reveal that any small changes could have a
profound effect on profitability and ultimately the feasibility of these enterprises.
Based on the promising outcomes of the feasibility analyses, the
establishment of numerous commercial ventures across southern Africa is
anticipated to not only improve the incomes of participating households, but
also the economies of communities as local spending in these communities
increases. Increased local trading contributes to increased circulation of monies
within rural communities, limiting the 'export' of capital to urban centres. The
greater number of times that monies are circulated at the rural level, the greater
the benefits for local society. There is tremendous extra growth potential
through boosting rural incomes, which in turn would stimulate demand for
non-tradable goods and services in rural economies, which would then bring
underemployed resources into production (Ngqangweni, 1999).
Despite the potential benefits and promising future of commercial
indigenous fruit processing, such enterprises and their corresponding markets
are still in their infancy. Enterprises in Malawi, Tanzania and Zambia are poorly
developed, while those in Zimbabwe are progressing well along the road of
commercialization. Success in Zimbabwe is due to the existence of private
entrepreneurs and NGOs promoting the commercialization and exporting of fruit
 
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