What is Diversification?
Farmers, landowners, and estate owners face a challenge. Your most valuable asset is the land you own but you may not be getting the return on investment that you need, or your current land use is no longer profitable. Many landowners are discovering that the solution is to diversify their business. According to the Farm Business Survey conducted by the Government’s Department for Environment Food & Rural Affairs (DEFRA), income from farm diversification topped £734 million in 2019-2020.
Choosing the right type of diversification for your land will depend on the existing resources you have. For instance, the land you have available, buildings, skills, and expertise. Examples of diversification include glamping, letting out buildings, selling farm produce, experience days, rare breeds, seasonal events, or renewable energy.
Why Diversify?
- Under used resources – many landowners have unused buildings and resources. Landowners that diversify successfully are often able to put their existing assets to better and more profitable use. Make your land work harder for you through diversification into glamping for example.
- Unfilled local demand – being able to meet local demand for accommodation that is not currently being met may offer an opportunity to broaden your offering into new business areas.
- Existing skills and expertise – using your existing knowledge of your land and experience of being close to nature will increase your likelihood for success. Glamping will allow you to meet like-minded people who want to get closer to nature.
- Area of interest – take note of any ideas that appeal to you but make sure that you work with a reliable partner to get your new business venture up and running, that will take the pain out of any new business enterprise that you start.
The Advantages of Diversification
- Increase profitability – You and your family are likely to see an increase in income and a better quality of life if you take on new activities.
- Secure your farms future – many farmers have owned their farm for generations and want to secure its future for many generations to come. Diversifying your activities and revenue streams you help to future proof the business, making it less vulnerable to fluctuations within any one industry, ensuring it will remain in the family for decades to come.
- Give future generations alternative options – several of our partners are the children of the farmer. They want to support the family business but are not interested in ‘traditional’ farming. By diversifying your business you give future generations alternative ways to contribute to the family business.
- Learn new skills – starting a new business is a great way to learn new skills and broaden your network of business contacts. Diversifying your skillset in areas such as management, marketing, finance, and customer service will help you gain business flair which will be relevant for all areas of your operations.
Key Considerations
Having spoken to landowners over the last 5 years the frequent concerns and considerations they mention when it comes to diversification are:
- The capital investment required and how much you have available to invest
- The level of risk you are willing to take both financial and your time
- How much time do you have to dedicate to the project, initially to set it up, but also how much time will daily management take. Will your existing business suffer as a result
- Do you have any expertise in this field, do you have the time to ‘learn’ a new industry
What if you could diversify into glamping accommodation whilst addressing all 4 of these concerns?
The Further Space Model
Have you ever thought about starting a glamping business? Have you thought that it is unachievable? Further Space has developed our business model specifically to meet these 4 key concerns. We have already helped farmers, landowners and estate owners diversify their land profitably with luxury glamping across the UK and Ireland. Our partners require lower start-up capital, experience lower financial risk, are given expert advice on planning and spend less time running their sites.
If this sounds like something you are interested in, contact us on:
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