Farm Diversification

Farm Diversification is the term usually used when considering a non-agricultural use of a farm. Farms benefit from vast quantities of land that can be put to a whole range of uses to use the land in a more profitable way.

Estimates suggest that close to 40% of farm businesses have diversified. Of course planning permission may be required from certain areas of diversification.

To briefly outline the process of diversification:

Consider the options
Look at the local market to see if there is a gap that needs filling
Apply for planning permission if required
Conduct a full report into the viability of the project
Start the business up.

Markets
Research your product, location of the product of service, how you would fit into the local market and the price point. Much can be done through gathering published or other information, most valuable of course is obtained direct from potential customers.

Requirements
It is helpful to review all of the resources of the farm to determine what opportunities may exist, as well as gaps there may be in the market. Each enterprise will have different requirements and the impact of these on the core farm business must be assessed.

Financing
Formulate a costing for the cost of startup, you product and the day to day running using current figures and estimates from suppliers if applicable. From this a budget can then be drawn up.

Returns
To ensure returns are viable consider some market research. Your budget may help you project your income and cash-flow. It is advisable to provide an in-depth analysis for the first year and year two and three summaries.

Planning
Planning permission in full or for Change of Use is normally required. Check with your local planning officer to see that the correct guidelines are followed.

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