How Building A 20-Year Financial Model For A Kenya-Based Palm Oil Company Transitioned It From Financial Complexity To Strategic Clarity
Growth isn’t a linear path. All successful businesses have a past full of unexpected challenges, detours, and learning moments (Remember Apple). Recently, we partnered with a palm oil company in Kenya that wanted to scale operations and attract a high 8-figure investment. They had the vision, ambition, and operational chops but lacked financial clarity. Our role? Build a robust financial model that attracted investors and created win-win partnerships with local farmers.
Let me walk you through some key takeaways that we think are relevant to any business leader, whether you’re in SaaS, E-commerce, or even Professional Services.
Turning Fragmented Data into Strategic Insight
We were leading the project with the CEO of this Kenyan company, which was aiming high—raising $84 million to fund a large-scale plantation and manufacturing facility. But, while they had done their research and had end-to-end data for land acreage, yields, and timelines, their financial estimates didn’t fully reflect real-world scenarios. The potential for investment risks loomed large, and their partnership with local farmer outgrowers needed financial structuring that would ensure mutual profit and risk sharing.
In our experience, CFOs, CEOs, founders, and most finance leaders face the same challenge in every industry. Data without the right insights can derail even the best of plans.
So, how did we make a difference?
In short, we built a financial framework for the company that laid down everything from the phase-wise cost structure and essential KPIs to financial projections and partnership waterfalls.
On a detailed level, here’s how we helped:
1. Strategic Capital Allocation
Unlike other products, palm oil cultivation is a long-term game (stretching to 20-25 years lifecycle). The company was looking at years of upfront costs before any revenue would come in, and they needed a financial model to cover high initial costs for things like infrastructure, nurseries, machinery, and oil mills. Imagine spending millions upfront, only to have underutilized equipment due to mismatched capacity. That’s a scenario no CEO wants to face.
Here’s where granular planning came into play: we aligned the oil mills’ capacity with expected yields. We developed a roadmap that considered the lifecycle of palm oil trees (which typically start generating revenue after four years!). This long-term thinking is a key lesson for any business leader managing capital-intensive projects.
2. Building an Integrated Financial Model
We built a financial model that considered these complex layers. Starting from the ground up—with land suitability for palm oil—we projected revenues based on real-time data and dynamically adjusted costs like Capex and infrastructure investments. From a high-level view, this sounds simple, but we had to break down each project phase, accounting for everything from land acquisition to seedling costs to harvest and milling capacity.
One of the biggest wins was creating KPIs that tracked company profitability and ensured local farmers had a stake in the game. This wasn’t just about building the company and creating an ecosystem where both sides thrived.
Key Takeaways for Business Leaders:
- Comprehensive Financial Planning: Whether you’re dealing with palm oil plantations or SaaS startups, having a robust financial model is crucial. It’s the backbone that guides decisions on cash flow, revenue recognition, long-term growth, and sustainability.
- Stakeholder Engagement: In this case, engaging farmers as partners was a key part of the plan. Transparent KPIs and financial forecasts kept everyone aligned. If you’re running a Tech company, your “farmers” could be your vendors or partners. Keeping them invested in your success is critical.
- Think Long-Term: Planning for the lifecycle of assets (like palm oil trees or software infrastructure) is critical. Whether in agriculture or tech, successful businesses require a clear roadmap for immediate and future profitability.
The result?
The financial model we built didn’t just sit on a shelf—it served as a living doc that was put to use immediately. Our client secured the confidence of his anchor investor and kicked off strategic initiatives the very next day. This model is now the foundation for their growth strategy as they continue to expand.
So, What’s Next for this Financial Model?
The next step for the client is scaling, and our model will keep evolving with real-time data and market conditions. But for business leaders across industries, the lesson is clear: success is built on a foundation of thoughtful financial planning, stakeholder engagement, and long-term thinking (& professional support in this case).
That was it. Have you ever come across a planning challenge for your business? What strategies have you found most effective in achieving sustainable growth? We’re all ears to learning from new experiences!