With the frustrating harvest season now over, it’s a good time to take stock of your farm business. How has your business done this year? What financial support have you had to help sustain and grow your business? What’s the outlook looking like for 2018 and beyond?
Farmers should be thinking about all of these questions and looking at their business from a long-term perspective. They need to consider whether their business is truly efficient and sustainable, especially in the current climate, that is only likely to get tougher once the UK officially leaves the European Union (EU) in 2019.
Although EU subsidies are guaranteed until 2022, under the current government, the picture after that is very unclear. Safeguarding your business therefore really needs to be the ‘top tick’ on your business to do list. Farmers need to weigh up whether the business, as it is, can sustain changes and circumstances outside of their control and whether they will have a healthy cashflow pipeline not only to survive but grow, too.
If you’re unsure what exact shape your business is in, now is the time to understand how sustainable your business is. This may then lead to a diversification or improvement in efficiency of the business.
We are currently working with several farm businesses, helping them with their financial planning, talking them through their funding options and how to manage cash flow better. We’re also providing support in business continuity and recovery, working with banks and accountants to help plan for the future, and meet the challenges the business may face. Cash flow monitoring and forecasting can be a vital management tool and integral part of understanding how a business can progress.
While assessing the health of their business, some farmers realise that, to sustain it, they need to diversify. With many farming businesses now looking at another enterprise that would increase profitability and, crucially, sustainability. There are a number of grant funding opportunities out there to help businesses with capital investment in order to secure another revenue stream.
The key to diversification is to find a service that you can deliver, that is genuinely a passion, and also a niche market that can succeed and provide a second revenue a stream to boost the sustainability of your farm business. Diversification, if done properly, can provide great results.
For more information about business monitoring and sustainability, or a chat about diversification, please contact David Hume on firstname.lastname@example.org or on 01665 511986.