Continuing with our series on the Due Diligence to be conducted before investing in agricultural projects, if you are satisfied that the projections and returns on investment are realistic, then proceed to the next step.
Find out if the business actually exists. Do not rely on the word of the person soliciting for the investment or other people who have invested in the business, like you might.
Do not rely on merely visiting an office. Find out where the farm is located. Independently and without appointment visit the farm without giving away your intention and ask questions.
Ask the farm neighbours about the ownership and activities of the farm. Discreetly find and talk to the farm workers. Follow the common advice and talk to the village drunk.
If you cannot do this yourself, then hire someone to do it. Still using the Capital Chicken example, it turns out that they did not own a chicken farm.
Third, find out what the track record of the business is.
How long has it been in business? How long has it been doing the specific business you want to invest in e.g broiler chicken using the Capital Chicken example?
Does it have financial statements? Who are its accountants and auditors? Are its accountants and auditors duly registered by the professional body?
Speak to them and find out if the business is legitimate?
Do they file tax returns? Other than people investing like you, who else can speak in favour of the business?
Listen and do not hear what you want to hear. Ignore the promised profits and open your ears.
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