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Expert advice

The rewards of developing and expanding a new business are tremendous if you get it right.

Jason Nickels and Steven Waters talked to their bank at an early stage, seeking advice and explanation about the financial issues they faced.

This was uncharted territory, so realistic trading projections and understanding the risks involved were absolutely key to the project’s success.

We feel that knowing and understanding our customers’ aspirations is key to helping their business succeed. And it is vitally important to have the right financial structure and bank services in place to turn the dream into reality.

In this case, a flexible business loan enabled additional cash drawings to be made during the construction of the new premises, maximising the opportunities that arose in the development stage.

A proper business plan was created from the outset and, more importantly, kept to.

By keeping in close contact with their agricultural manager, the partners were able to adapt support to their changing needs.

It should be recognised that these sources of help are really intangible partners in the business and have much to offer.

It is very rewarding to see new people setting out in food production.

The combination of producing quality products and having a really effective system to deliver them to the marketplace makes this business stand out.

  • For more on how to develop your business to its full potential, speak to your local NatWest Agricultural Manager, or call 01332 222 888
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Expert Advice

Diversification is an essential option to provide an extra source of income and improve profitability for existing farm enterprises.

But it is not always that simple.

At an early stage, Jim Strathern recognised the need to develop new income streams outside his traditional farming activities.

He also needed to ensure his expectations were realistic before taking the plunge, especially as he would be entering uncharted territory.
Exhaustive research of a new is vital and Mr Strathern tested the waters on a trial basis before pursuing his project on a larger scale.

Early dialogue with a variety of sources is equally important to the success of any diversification project.

Planners, accountants and the bank need to be consulted on the merits of the proposal.

Devise a business plan and consider any additional sources of available finance, such as rural enterprise scheme grants.

One of the best sources of finance for such a venture is a flexible business loan.

This allows payments to be deferred until a project is fully operational by way of a capital and interest “holiday”.

Funds can be drawn as and when required and flexible repayment options can follow.

Mr Strathern’s is a unique venture and not everyone will achieve what he has.

But this is a clear example of an innovative approach to a non-farming service and with patience, careful planning, support should ensure the ongoing profitability of the overall enterprise.

For more on how to develop your business to its full potential, speak with your local NatWest agricultural manager, or call 01332 222 888

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Expert advice

Profitability can be found in projects a little different from the ordinary.

And there is more at stake when stepping into a previously unexplored market.

The Gill family’s first step was to recognise the importance of finding a niche product, enabling them to add value to what they produce; something that they felt unable to achieve with their dairy herd.

They have taken control of all aspects of the supply chain from production to marketing.

This has helped the business take ownership of variable costs allowing accurate budgeting with fewer risks.

In this case, an overdraft facility was ideal.

Offering funds as and when required while accruing interest only on the outstanding balance, this facility can be uplifted in to a longer term loan once their needs become more predictable.

Ongoing uncertainty in farming causes many of our customers understandable concern.

The Gill family business demonstrates the value of utilising existing skills, adequate project research and sound business planning in establishing financial stability.

A business plan should outline the market for the new diversified business.

This should form the basis for producing realistic forward budgets including a cash-flow projection, identifying any borrowing requirements.

This will enable the bank to provide the most suitable form of lending to meet the requirements f a new venture.

For more on how to develop your business to its full potential, speak with your local NatWest Agricultural manager, or call 01332 222 888


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Expert Advice

  • A successful rural business needs the right components in place to achieve profitability.

Falling farm incomes mean change is inevitable for all farms if they are to remain viable.

Rob and Sheila Rattray have grown their business steadily and focused on steadily and focused on supplying the right product for their market, not just over the counter in their butcher’s shop, but also on their on own farm.

It is this combination of technical skill and an ability to understand and take control of aspects of the supply train that has helped them make their vision a reality.

At each stage, they have consulted their professional advisers, including their NatWest agricultural manager.

One of the strengths that has helped them grow their business has been clear planning, linking the projected performance of both farm and butchery enterprises.

It is this approach that helped Mr Rattray identify the need to expand his preparation facilities on farm, to cope with demands of new supply contracts he had won.

This meant he was able to concentrate on his core business – dealing with his customers face to face from behind the counter.

Bringing elements of the supply chain in-house also helped the business take ownership of some fixed and variable costs.

Not everyone can achieve what the Rattrays have done.

But a clear examination of how the business could be run most effectively, coupled with sound business planning, has helped Mr Rattray take his business forward – giving it a real competitive edge.

  • For more on how to develop your business to its full potential, speak with your local NatWest Agricultural Manager, or call 01332 222887

Expert advice

  • The booth family have improved have improved the efficiency of their farm using their single farm payment to invest in its future.

And it’s to their credit that, by reviewing how they farmed, they were able to seize the opportunity – backed up by a strong business plan.

It’s not just changing what you do that can influence profitability.

Just as important to making your farm business succeed is investing in a more cost-efficient operation – the “how you do it”.

There is little doubt that further reductions in support payments are on the way.

Subject to cross-compliance, farmers at least have the assured income of the SFP.

So now is a great opportunity to review the strengths and weakness of the farm business.

In any discussion of this nature, it’s essential to look at all aspects of the business form the family’s succession planning through to opportunities to market higher- value products or diversify.

Your advisers and local bank agricultural manager can add value to the task of reviewing your business.

They will have suggestions and ideas from what they have seen work elsewhere, as well as being able to help with finance.

Don’t forget, not all your assets are “tangibles”, like land & buildings.

The SFP can be treated as an asset – and borrowed against to invest in your business now.

  • For more on how to develop your business to its full potential, speak with your local NatWest Agricultural Manager, or call 01332 222887

Expert advice

  • Farmers have many strengths and skills, and their ability to adapt to change is possibly the most fundamental.

Given the transformation under way in farm support payments, it is now more vital than ever to look at both the whole business and the performance of the individual enterprises that contribute to overall farm income.

While reviewing the opportunities available to your business, consider issues such as personnel strengths and skills. Try to measure available time, the impact on staffing and financial risk, as well as location, the marketplace and potential for higher-value products.

Whether these initial discussions take place amongst the family members themselves or with the input of farm advisers or a bank manager, most businesses can really benefit from a comprehensive review.

Once these discussions are complete, the next stage will include looking at the finances for any new venture – both in terms of funding required and the potential for income generation. At this stage, professional advice from your bank manager can really add value.

Diversification will not provide the answer for every business. But for some it represents a positive way to increase income and thereby provide a platform for ongoing business development.

That’s exactly what the Battarbees have done – built on their existing skills and resources to move their farm into a new and higher-value market.

  • For more on how to develop your business to its full potential, speak with your local NatWest Agricultural Manager, or call 01332 222887
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