5 strategies for running multiple dairy sites

Multisite farming is no longer uncommon in UK dairying, with some businesses operating up to seven units.

But how does a farming business operating from multiple units maintain technical excellence and financial performance?

Becki Leach, knowledge exchange manager at AHDB Dairy, who runs a discussion group for farmers with multiple farms, gives a few tips.

See also: More dairy news

1. Structure the business accordingly

Some farmers run each unit as a separate enterprise, while others operate all sites as a single business.

Once the number of sites grows beyond the number that can be managed effectively by one individual, a more commercial structure is often adopted, Mrs Leach explains.

She says some of the members within her group have created a corporate structure with a board and shareholders.

“It is often a natural progression to have a more formal structure because it means that day-to-day responsibilities don’t fall on one person.’’

The scale of a business with two or three units is not too unwieldy for the farmer to make the key decisions if there are reporting lines in place for staff, but once the business grows beyond that number, a structure more typical of those found in other industries is beneficial.

The franchising system operated by fast food chain McDonald’s is a template that can be replicated in dairy farming.

While McDonald’s offers staff and external investors opportunities to invest in and run one of the company’s restaurants for a 20-year period, dairy farmers with multiple sites could offer others the chance to build up equity with a profit share in one of their units.

This facilitates growth and allows the business owner to remove themselves from the day-to-day responsibilities of running that unit.

Another approach is to bring in outside investors to finance growth by offering shares in the business in return for equity growth or dividend payments.

2. Put systems in place to establish responsibilities

But if not, get all staff together once or twice a year for staff meetings, brain storming and team building.

3. Train and reward staff to retain their loyalty

As a business grows, the dairy farmer must spend more time managing and developing a team.

Mrs Leach advises creating a culture of development and opportunity. “If you intend to retain staff you need to invest in them with training.

“The challenge is whether to train an individual in just one specialism, which can improve job satisfaction, or train them in everything to spread the risk and make the business less vulnerable should they leave.’’

Treat employees with respect and they will reciprocate with excellent work, Mrs Leach adds.

4. Formalise procedures with protocols

Protocols common to all the sites give consistency to specific tasks to help staff meet the business owner’s expectations.

Involving staff in designing protocols ensures they are practical.

It is key to make employee’s responsibilities clear using systems for jobs such as milking © Tim Scrivener

Training about protocols will also help employees understand the relevance of the guidance.

“Managers and staff at each of the farms who see a progressive attitude by the farmer are more likely to buy into these protocols,’’ Mrs Leach says.

5. Plan for succession

Some dairy farmers have gone down the multisite route to phase out their responsibilities in an ultimate managerial role.

They achieve this by upskilling people in the business and developing potential successors.

Upskilling people can help you find successors © ING Image

Joint ventures are a win-win for both parties, says Mrs Leach.

“When they are done right, they offer a profitable combination of skills and resources, allowing all parties involved to grow in terms of business and wealth creation.’’