MANY farmers and rural dwellers are interested in enterprise diversification.
There are countless possibilities when trying to identify a realistic option for generating additional household income and while diversification may not be practicable for every farmer, well planned and seasoned projects can create new sources of income for farmers. The best diversifications complement the existing farm business by improving cash flow, adding profit and cutting volatility as the object of starting a new business is to be better off by diversifying. But agricultural ventures beyond core farming can drain time and money from the farm business. Therefore the key is to think ahead and look at every aspect of the project before making a commitment.
In-depth market research should be carried out and a detailed business plan prepared before proceeding with any venture. Research for the project is important to assess whether the market size is available and the standard and quality of local competition. Always consider the number of customers you want to attract, whether they are repeat customers as is they are you will require a smaller base.
You have to consider how much do you want to be paid? How much will the customer pay? What are your competition charging?
A diversification project that uses existing farm buildings is likely to require full planning permission for change of use and it is important to contact the local planning authority as development cannot begin until the local planning authority has determined in writing whether prior approval is required. Most importantly, while change of use may be achievable, any physical changes that alter the appearance of the building will require full planning permission.
If you are starting up a new food business you must register your food business with a competent authority before you start operating, even if from your home. The type of product you are producing will determine which of the competent authorities you must register with. It may be your local environmental health office (HSE), the Department of Agriculture, Food and the Marine, your local authority veterinary service or the Sea- Fisheries Protection Authority (SFPA).
It is important to determine the best branding and promotion to use. It can one of the below or a be a combination of: online – websites, social media, blogs, advertising; face to face – in-store tasting, foodie events, trade shows, farmers’ markets and other – word of mouth, presence in local eateries, ambassadors, endorsements.
With any new business when dealing with the public and customers you will also need good communication skills and be prepared to take advice and feedback on how the product or service may be improved.
New activities in farm buildings will bring new risks and failure to inform the insurer can result in loss of cover. Public liability cover is likely to need to be reviewed, not only because of the risk posed by any new activity but also increased traffic and pedestrian movement. Contact your insurer before starting project to make sure that cover will be available. We are planning to hold an options programme this autumn where many of the issues touched on above will be covered along with case studies of farmers who have diversified.
Anyone interested in this event can contact the Teagasc Office in Macroom on 026-41604.
• Next week: A Riverstick family who diversified by converting farm out-houses into self-catering accommodation.
• Seámus Lordan is a business and technology dairy advisor based in Macroom, who also specialises in the establishment of alternative enterprises on farms.
