Here savills look at the key points to look at if you are wanting to do a farm diversification. A great article to look at if you have recently started a project or planning to develop one.
Diversification is not a new phenomenon and indeed it’s not for every farmer or farming business. But for many, making the best use of a farm’s assets to enhance farm income from sources other than conventional farm production makes sense. According to DEFRA, in 2017/2018 two thirds of all farms had a form of diversified activity. Potential opportunities for diversification may include:
When exploring the options for diversification there are many issues to consider, but most importantly it must be the right choice for the farming business and those who work on the farm. Our recently launched Spotlight: Farm Diversification highlights the following 10 key points to consider:
What redundant or underutilised assets are on the farm? For example, buildings, stables, lake, topography, natural capital and forestry.
Decide whether you are best suited to creating a product or providing a service. What are the unique selling points? What’s your personal interest in this new business, hands-on or delegated?
What skills, qualifications and interests do you and your family or business partners have? Is there already available labour with the appropriate skills or will upskilling training be required?
Where is your farm? Are there enough potential customers nearby? Does your farm have good access from the main road?
Who are your customers? What are their needs? Where and what is your competition?
How much will it cost to set up? Is there grant funding available? Do you require a loan or do you have the disposable income to support the project?
What are the legal requirements? Is planning permission required? What are the tax implications?
How will you promote your business? What will your brand image look like?
What are the risks to the business? What are the health and safety considerations?
How will the diversification impact on the core farming business? It is important to conduct thorough market research and business planning. Before undertaking a new venture seek advice on reviewing the farm business as it may not always be the answer to improving profitability.
Article taken from Savills:
At Flame Marketing our core aim is to improve the rural economy through supporting agri-businesses and farms. We believe one of the key issues facing UK agriculture at present is the lack of understanding and the disconnect between the general public and the farming community. Through our Agri-marketing services, we are working to ensure consumers have a better understanding of the processed involved in making their food and maintaining the countryside.