Is it the right time to diversify – Brexit news

With Brexit upon us, farmers are thinking about how they need to shape their business over the next few years to ensure they can ride the wave of a changing market and the consequential volatility, reduced direct support and a changed regulatory framework to work within.

There is plenty of commentary from leading trade organisations such as the NFU and CLA as well as economists and consultants about what the next few years might look like, but for most farmers, the ‘macro’ environment is too much and too big to think about. What they are thinking about however is the day to day stuff – ‘what should we be putting into place on our farms or in our businesses to ‘get through’, or for those feeling ambitious, ‘to thrive’ over the next few years.

See also: Five key steps before diversifying your farm business

Naturally, the mind is automatically set to thinking what alternative incomes should I look for, what can I diversify into? It is great that farmers are thinking along these lines, although it is not unexpected. Farmers are hugely flexible, diverse business people that are extremely capable of many things. However, we offer a few words of caution.

If the farmer has got a son or daughter who wants to return to the farm and has spare resources (buildings, land, people, cash), then diversifying could quite often be the right thing to do. However, if diversifying is a knee-jerk reaction to ‘just needing some more income’ or if it means distracting the main business owner/farmer away from their day-to-day running of the farm, they could end up worse off than had they just concentrated on the farming.

Whilst we are likely to be receiving less support and some sectors will experience disturbance to the markets, farmers would do well by first looking at their farming business in as much detail as they can before diversifying. Think about benchmarking your business, looking at your costs, consider a buying group. Consider alternative management structures such as contract farming and machinery sharing. Consider expanding or consolidating. Seek opportunity for adding value to existing products. Make sure you are farming as efficiently and productively as possible and utilising technology within your means.

Taking the time to work ‘on’ your farming business, and not just ‘in’ it could be hugely valuable in ensuring you are well placed to survive and hopefully thrive the bumpy road ahead.

See also: Assessing your assets for farm diversification

Once the farmer has put these measures and actions into place (or as we said earlier, have an extra resource that doesn’t take the farmer away from the main business) then it’s a great time to consider diversifying.

And remember, diversifying really doesn’t have to be ‘the next big thing’ – you don’t need to wait to diversify until you’ve had a light bulb moment with some crazy new fad.

See also: Hundreds of rural business and farm diversification ideas

Our five top tips for coming up with a new business idea are:

1. A farm diversifying is naturally led towards utilising land and buildings. These businesses are great but don’t forget to consider other options and other business models. For example, instead of setting up a leisure activity (or indeed as well as) you could organise tours or weekends away (for families, stags does, corporate events), and collaborate with other businesses. If you are great with horses and run a livery business, you could consider expanding by offering ‘how to run a livery’ courses to others, online or in a classroom.

2. Remember when you are diversifying you are selling to people. How near or far you are from people (lots of people) will determine what sort of activity is suitable for you. For example, retail sales will rely on you being within a few, easily accessible miles of a lot of people. Whereas holiday accommodation is perfectly fine to be in the middle of nowhere.

3. Whilst you don’t need a crazy fad, you do need to some extent a unique selling point (USP). Its absolutely fine to be doing something someone else is doing, but you will either need to have your own geographical patch (i.e. a farm shop) or do it a bit differently to the competition – different could be better, more expensive, cheaper, a different service, adding value to the service etc. Don’t be afraid of competition, but have respect for it and understand how you can compete.

4. Work within your existing skills or interests – as with any business especially in the early days you will have to live, sleep and breathe the business to get it going – if you aren’t that interested in it or don’t enjoy it, it will almost never work.

5. And finally, once you have come up with your idea, spend lots of time researching and planning. Luckily there’s lots of amazing information on The Business Barn website to help you do just that.

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