January is a good time to set goals and targets for the next 12 months or longer.
In my experience the most common targets amongst farm businesses are:
All three of these are worthy targets but will not happen without significant planning and implementation.
Make more money
This is dependent on farm type, size etc. However a few common traits can often be seen in the most successful farmers in achieving this goal. A clear and focused objective is crucial, attention to detail is key and often centred around excellent cost control. A good relationship with your market helps and quality staff management will never be far away.
Pass the farm to the next generation
In order to pass a farm business on to the next generation it needs to be a successful one. Passing on a poorly performing business is like handing over a grenade with no pin. You must focus on getting the business in good shape first and then planning succession in detail to ensure it runs smoothly. These conversations often aren’t easy but very necessary.
Buy next door
I haven’t met a farmer yet that doesn’t want to buy his neighbours land. But today is it really a worthwhile investment? With some parcels of land over £10,000/acre, annual profits from pretty much all agriculture will show little or no return. At a push you may be able to cash flow this capital purchase but could the money be put to better use elsewhere?
Land has been a sound investment historically but based on ever increasing land values. Those who have added parcels of land to existing holdings have suffered little by way of risk, and have been able to spread their costs over increasing acres.
Recent reports suggest that land values are starting to fall, and with an uncertain political climate taking too big a risk will inevitably lead to failure for some.
With Brexit just around the corner and a questionable future for the Basic Payment Scheme are we sure this trend will continue?
There are many things to consider when planning and running a successful business. Take the time to review all of your options before making an informed decision.
Thomas Westcott has much experience helping land owners and farmers develop their businesses and would be delighted to hear from you.
You are now leaving the Thomas Westcott website. Thomas Westcott is not responsible for the content of the PrimeGlobal website nor the content of the websites of other independent member firms of PrimeGlobal. Equally, PrimeGlobal is not responsible for the content of the websites of independent member firms, including the Thomas Westcott website.Go to site