New Business Planning a
Many in the dairy sector would suggest opportunities for new entrants simply don’t exist, but consultant Andy Guy disagrees
Everybody is aware that milk prices have been under pressure and profit margins for most dairy farmers have been badly eroded. Some of the established farmers are responding to the volatile market by expanding, but many are looking for ways out of the industry and this is opening up opportunities for determined, innovative new entrants to exploit.
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Some of these opportunities will come in the form of tenancies which will be offered for tender, some will present as business partnerships or share farming deals. But for the ambitious and business-like new entrants, there are going to be a host of options.
How can new entrants take advantage of these opportunities? Offers of business opportunities will not simply fall at the feet of the potential first time farmer. The successful individuals need to be searching and preparing for them in advance. Nobody can prepare plans for a new business until the details are known, but they can begin to prepare themselves. Perhaps it is not very trendy, but the old fashioned SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) is a good place to start. A self-critical and honest assessment of your character, skills, knowledge and ability will be an enlightening experience and it should expose the areas that you need to work on, in advance of your first business proposition. Training courses can help improve the weaker areas in your knowledge, while looking for work on different farms might fill the holes in your practical experience?
What will be expected when the opportunity arises? It doesn’t matter whether you are going to be bidding for a
ow might actually be the time when opportunities are most readily available for new entrants.
tenancy, negotiating for a business partnership or buying a farm, the first step is to thoroughly investigate the opportunity. You will need a great deal of information to begin formulating a business plan if it is going to be worth the paper it is written on. You need to know the ins and outs of the farm, so you can forecast how productive it will be, when you will be able to graze, how many animals it will support and what the limiting factors are for your new business. You will need to assess the infrastructure of the farm, whether it requires maintenance or upgrading and what that might involve. You will need to know about the markets for your output in the neighbourhood and what suppliers, contractors and inputs are available. Really thorough investigations at the early planning stages will make it much easier to develop your business plans later. The business plan is an important document and it is worth spending time to make sure that it as detailed as possible. Don’t even think of adapting a plan produced for another farm or business, this is a recipe for disaster. Each farm and each farmer is unique and the successful plans recognise this and exploit the strengths of both.
The business plan is, first and foremost,
84 THE JOURNAL APRIL 2015
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