In Uganda, we have a saying: “Agali awamu gegaluma enyama” (Teeth that are together bite the meat). In business, the “teeth” are your records and your calculations. If they don’t meet, you cannot eat the meat of profit.
Many farmers operate on “gut feeling.” You might look at your neighbor making money from pigs and think, “I should start a piggery too.” Or you see money coming in from selling fish and assume you are rich, forgetting the money you spent on feeds three months ago.
This is not business; this is gambling. To transition from a subsistence farmer to a commercial agribusiness owner, you must move from saying “I think this will make money” to “I know this will make money.”
The Tool You Need: The Gross Margin Budget In the book Farm Business Management, expert Peter Nuthall emphasizes a skill called “Getting the Sums Right.” The most basic tool for this is the Gross Margin Budget.
It sounds complicated, but it is simple. It helps you compare two enterprises (like Fish Farming vs. Matooke) to see which one actually puts more money in your pocket after costs.
The formula is simple: Total Income (Sales) – Variable Costs (Feed, Seeds, Medicine) = Gross Margin
A Practical Example: Fish Tanks vs. Matooke Imagine you have 5 million shillings (UGX) to invest at your farm in Bushenyi. You are torn between building a new automated fish tank or expanding your banana plantation.
Without calculating, you might choose Fish because the “lump sum” at harvest looks big. But if you do the sums, you might find that the profit margin on Matooke is higher because the costs are lower. Or, you might find that Fish is better because the turnover is faster.
You cannot know this by looking at the soil. You can only know this by looking at the paper.
Why You Must Write It Down Nuthall notes that human memory is faulty. We tend to remember the day we sold a big bull for 2 million shillings, but we forget the small 50,000 shillings we spent every week on treatments.
Budgeting forces you to face the truth. It helps you answer hard questions:
How Dynagric Helps You Calculate At Dynagric Eco Tours, we don’t just teach you how to dig a pond; we teach you how to run a business. Our consultancy services include Farm Business Planning. We help you sit down and look at your numbers before you dig the first hole. We help you estimate the cost of feeds, the expected market price, and the potential return on investment.
Conclusion A smart farmer does not pray for profit; they plan for it. Before you buy your next batch of fingerlings or clear land for a new crop, sit down, take a pen, and do the sums.
