12 March, 2010
Having endured a sustained
period of economic instability, many modern businesses - farms
included - have been forced to reassess their position going
forward. While times have been tough, it's nothing that farmers
haven't been through before. Major incidents from BSE to foot and
mouth mean that farm owners have been dealt crushing blows before.
A lot of those who came out the other side did so because they
managed to identify ways to supplement their traditional income by
branching out into new areas.
Diversification has helped many a farm battle through troubled
times and it's become an increasingly valid option for those owners
who wish to bring in extra revenue. But it's not an easy step to
take; those who do have such plans need to ensure they have planned
meticulously and covered all the bases. Simply deciding to
diversify is not enough - finding the right gap in the market and
then executing a well-prepared strategy is essential. With that in
mind, here are a few points to consider:
Play to your strengths
If your farm has buildings that are currently going unused, think
about how you could use them efficiently to branch out. Successful
diversification often hinges on putting existing assets to good use
- it makes good economic sense to go down that route. Take an
inventory of your unused resources as one of the first stages of
forming initial ideas.
Fill that gap
Get out there, do your research and find out what the local area
is crying out for - if you can find a way to meet that demand then
you're halfway there. By canvassing locals for products and
services they feel are lacking in your area you'll be generating
the best possible ideas for diversification.
By keeping new business ideas in your sphere of personal interest,
you'll ensure that you won't get bored with the venture six months
down the line. Try and find a viable business opportunity covering
a subject you have a genuine passion about. It doesn't matter what
it is; if you're fully committed to making it work with a long-term
strategy and a burning desire to succeed then the chances are
you're off to a great start.
Do some research in to what has made for successful farm
diversification in the past. Read up on case studies and draw some
inspiration. That's not to say that you should copy a business idea
wholesale, of course; what works elsewhere won't automatically be
right for you.
Check your cover
The protection afforded to you by insurance is incredibly
important, so if you are looking to change the direction of your
business be sure to check with your current insurer that the policy
cover provided is compatible with your plans. If it is not, your
insurer will be able to discuss with you the insurance cover that
you will require going forward with this new venture.
Take these points into account and there's no reason why a
well-planned diversification plan can't pay dividends. Finding a
potential area of business that excites you personally and looks
likely to fill a much needed gap in the market is the key to a