Buying A Smallholding? Measure Up Before Making Your Investment…
- 1 Buying a smallholding business requires a 'tailored' approach for desirable results
- 2 Setting Personal Goals For Your Farm Business
- 3 Planning Your Personal Exit Projects
- 4 Plan Your Target Ownership Earnings - With Exit Benefits
- 5 Allocate Your Time Involvement As A Smallholding Owner
- 6 Think Through Your Smallholding Succession, Post-Exit
- 7 Check If You're Adequately Skilled & Qualified To Run Your Smallholding Business
- 8 Pull Together A Shortlist Of Business Ideas
- 9 Line Up The Assets You Would Need To Succeed
- 10 Research the marketplace for the most suitable smallholding property
- 11 What kind of professional advice do you need before buying a smallholding?
Buying a smallholding business requires a 'tailored' approach for desirable results
When buying a smallholding, taking your time to get the right fit makes all the difference to future successes.
So, where should you start?
Deciding it's purpose!
Business or leisure?
But if you ask us...
...we are persuaded that smallholdings are to be self-sustaining financially.
That is to say a smallholding is an asset, and as such it should, by definition, provide you a reward for your labour.
If you are going to work the land and livestock - with the potential for yield that the earth naturally has - why shouldn't you be in expectation for gain?
Setting Personal Goals For Your Farm Business
How do you intend to benefit from running this smallholding?
Your farm business plan begins with setting your thoughts on what rewards you hope your farm ought to give you.
Your smallholding business is an investment vehicle.
It's purpose is to take you from A-to-B...departing from financial need, onto the destination of expediency.
Albeit, by way of hard graft.
(But then again, we're not afraid of that...)
If you don't set your trajectory of aim at the start of the journey, you leave it to chance and risk missing the mark.
Declaring your farm mission statement and vision
Declaring a farm business mission statement or vision is fundamental.
Your mission statement is the strategic steer, or thrust.
It should govern, all efforts within your operation after itself.
A head upon shoulders, so to speak.
Once set in alignment with your personal drivers, a smallholding vision statement becomes your uncompromising tracks for commercial success.
7-steps to writing a mission statement for your smallholding business
- Step 1 - the name of your business...
- ...begin with your smallholding trading name - the more descriptive your trading name is of delivering relevant benefit to your audience - the stronger the opening your vision statement.
- Step 2 - core benefit offered...
- ...align your chosen business name with the primary benefit or value you intend to give to the marketplace. This sets the tone for what you intend to achieve at the outset.
- Step 3 - products and services...
- ...outline the main product/service offered to customers within your niche.
- Step 4 - key differentiator...
- ...declare what you intend to do differently in order to meet the needs of your target audiences more effectively, compared with what is generally available out there.
- Step 5 - target audience...
- ...make it clear to your chosen audience that from the outset of starting up you are purposed to serve them specifically. Leave nothing to chance.
- Step 6 - secondary benefit...
- ...make mention of any combined benefits of which should accompany the primary aim mentioned above in step 2.
- Step 7 - value given...
- ...distinct quantifiable and qualifiable value to be gained by customers you serve, alongside general benefits defined earlier in step 2 & 6.
Planning Your Personal Exit Projects
What do you plan to do when you exit your smallholding? How will your smallholding business enterprise help you get there?
Although your focus at this stage of business ownership is very much on getting started, the old adage applies, "...you should start, as you mean to go on."
Have in mind the purpose of what you want your smallholding to do for you by the end of tenure.
Know what you want to do afterwards...
...what you need to achieve it...
...and explicitly how to gear your business now to meet your financial needs for exit.
8 step outline for how to plan ahead for personal exit projects
- Step 1 - project titles
- ...identify each planned exit project by name.
- Step 2 - write a project description for each exit project
- ...draft an outline for what the project entails and offer enough detail to feed further steps.
- Step 3 - what are the goals and objectives of each project
- ...know what you want the exit project to do for you and declare importance and motives behind making aspirations towards them.
- Step 4 - time duration of each project
- ...give a time estimate you intend to fulfil each exit project.
- Step 5 - layout project milestones
- ...list each milestone achievement leading up to the product of each project being delivered.
- Step 6 - cost highlights
- ...line-up the main costs of each project as an estimate of what is required to have in hand to make them happen.
- Step 7 - calculate a project-based budget for exit
- ...how much will each project cost you to complete?
- Step 8 - identify prerequisites to performing the tasks for each exit project
- ...list all necessary, mission critical components to successfully completing the project
Plan Your Target Ownership Earnings - With Exit Benefits
Be clear about your expected compensation. Don't undercut your return on investment.
During your tenure as owner of your planned smallholding business, be clear about how it should pay you.
Your efforts both to start-up and to carry this business will certainly be a sacrifice.
You don't want to discourage yourself along the way (especially during the steep uphill seasons of work) with an undervalued recompense.
Plan your earnings meticulously against business performance.
Write a projected personal income statement for your smallholding business
- Step 1 - declare your expected income
- ...identify all income streams from your smallholding enterprise and calculate your combined earnings.
- Step 2 - tally your personal household expenses
- ...offset your expected net income against expected household costs to gauge your smallholding's contribution to your personal upkeep.
- Step 3 - profit/loss
- ...calculate your profit/loss position as a result of simply subtracting your projected household expenses from your projected net smallholding income.
Set a capital lump-sum or business premium in mind to receive on eventual exit
- Step 1 - understand valuation methodology for your chosen business
- ...choose an appropriate way of calculating an estimated market value for your smallholding business in preparation of an exit.
- Step 2 - estimate an exit value of your smallholding business
- ...plot your estimate exit value, which a buyer would have to pay in order to take ownership.
Allocate Your Time Involvement As A Smallholding Owner
Make sure you budget your time closely to ensure a fair recompense for your efforts
One of the most over spends in allocation of resources common to most business owners is their own time involvement.
Return on your investment as a smallholding business owner is directly correlated to use of funds and time.
Both of which must be accurately accounted for to produce an accurate ROI figure.
Your money and time hold value.
Spend more time than you have accounted for in relation to your estimation of return, and your ROI figure is an overshoot.
Write a typical weekly schedule covering all relevant ownership/running duties
- Step 1 - produce a work breakdown structure for your smallholding duties
- ...itemise your smallholding work tasks within their categories
- Step 2 - estimate the a time allocation for each item
- ...budget a fair amount of time to perform each task
- Step 3 - calculate a total time spent working per week
- ...add together a cumulative figure of time to perform all tasks
Think Through Your Smallholding Succession, Post-Exit
Handling your smallholding enterprise responsibly for the long term takes forward planning
When you can't finish your plate, do you throw away or give to those who have need?
Consider the sacrifice involved in starting a business...
...and that's assuming you're privileged enough to have overcome the barriers to entry.
Now having survived the start-up challenges, traversed early operational speed bumps and entered into net profitability and drawing down earnings...
...why when you comes to the end of your tenure would you choose to abandon it to ruin?
It's income earning potential offers very real value to others, even when you no longer want it.
For the sake of conserving your valuable efforts and passing on the financial advantage to someone else who is hungry for the opportunity, consider a smallholding succession plan.
Draft a smallholding succession plan to effect after your tenure as owner
- Step 1 - review your business ownership structure and legal proprietorship
- ...compile paperwork and legal contracts pertaining to ownership
- Step 2 - get familiar the mechanics of business transfer
- ...write a checklist for necessary steps to transferring the business
- Step 3 - prepare managerial documentation
- ...make sure all that is needed to 'run' the business successfully, is written down
- Step 4 - consider 3rd party provider agreements & arrangements
- ...produce clear steps by which your agreements with other parties would seamlessly be transferred
- Step 5 - consider handover help
- ...plan a period of hands-on consultancy & guidance to give the new the owner in the early stages of handover
- Step 6 - share business growth plans and outlook
- ...give the new owner the advantage of experience by sharing your documented outlook of growth beyond your tenure
- Step 7 - extend the usability of planned assets and resources beyond your exit
- ...plan your exit date and ensure you've budgeted ample resources and assets to benefit the new owner beyond your exit
Check If You're Adequately Skilled & Qualified To Run Your Smallholding Business
Do your research and find out if your hands are adequately prepared to do the job
Depending on your smallholding business you may find that you are in need of up-skilling.
This should be researched well in advance of a decision to start-up, in order not to fall short.
Thinking you can do it on the fly (taking short cuts) might end up in significant loss.
Qualify the skills and/or qualifications required to competently run your planned business
- Step 1 - research the key skills & qualifications required for your business niche
- ...investigate the key personal success factors which your peers have that make all the difference
- Step 2 - consider which skills/qualifications you will not compromise on
- ...draft shortlist of courses which you will sit to acquire relevant prerequisites
- Step 3 - plan which training providers you will use
- ...get course spec, cost quotes, student reviews and other detail related to your courses of interest
- Step 4 - check availability
- ...get your dates in mind and lined up that should you go ahead, all is in order
Pull Together A Shortlist Of Business Ideas
Ensure you have a reference group of business ideas to sift through before deciding on your favourite
Be diligent to consider all options before settling with your choice of investment.
Once your investment is made (should you change your mind down the line) the cost of an unplanned early exit can be punishing.
Ensure that your alternatives analysis is thorough enough to grant confidence.
Write an alternatives analysis before starting your smallholding
- Step 1 - define your choice criteria
- ...set some parameters for how you would make your choice.
- Step 2 - use a business ideas generator to feed the thought process for arriving at your preferred choice
- ...browse options and simply glean the highlights.
- Step 3 - perform a direct head-to-head comparison between the ideas
- ...run a comparative analysis and pick the idea with best aligned features for you.
Line Up The Assets You Would Need To Succeed
Make a wish list of capital purchases required to make your proposed business tick over
Mission critical assets for keeping your business viable require extra special attention in the planning stages.
Being well aware of the material necessity of tools and instruments required to perform is good preparation.
Be sure to add an additional margin of output for growth.
This ensures you don't hit productivity ceilings prematurely and become restricted early on.
Discover the most advantageous products and solutions for your business
- Step 1 - scope the various categories of tasks which will be performed
- ...make a detailed list of tasks underpinning the running of your proposed business.
- Step 2 - qualify the most beneficial, yet cost effective tools for the job
- ...assess the marketplace for appropriate assets to purchase for your smallholding.
- Step 3 - draw up a shortlist of suppliers & investigate
- ....perform some primary research to familiarise yourself with the procurement process.
Research the marketplace for the most suitable smallholding property
Begin to establish an idea of the most advantageous property features for your smallholding
Your work environment makes all the difference to productivity.
The physical features and parameters of your smallholding therefore will largely affect your ability to succeed in business.
There are many factors which will impact your ability to secure the right smallholding...
Therefore, getting the right assistance and starting as early as possible will improve your chances of success.
Search the marketplace for smallholdings for sale early on to find the ideal property
- Step 1 - research examples of similar smallholdings business's to the one you plan to run
- ...use Google Alerts to siphon off the latest published listings of smallholdings opportunities.
- Step 2 - research ideal regions
- ...consider the location for your business, think of the local community and how you might support it's needs with your enterprise.
- Step 3 - speak with for-sale property agents to glean free professional advice
- ...find out trends of property sale within the region, plus other related tips.
- Step 4 - consider speaking with existing smallholdings owners within your planned niche
- ...draft a 'well-thought-out' list of stock interview questions and hit the phones!
- Step 5 - sign-up to any free online specialist advisory services
- ...keep abreast of the latest professional advice on smallholding property and business for profitable insights
What kind of professional advice do you need before buying a smallholding?
Assembling your team of advisors before making your smallholding investment in key
The success of a smallholding business can be enhanced significantly by canvassing critical advice in advance of purchase:
- Business planning and marketing - get a FREE phone consultancy with an experienced business advisor.
- Planning permission - speak with your chosen local planning team and search online for free planning advice.
- Livestock registration - thinking of keeping livestock? Find out if you are obliged to register your operation with the Government.
- Farmer's markets & direct selling - find out innovative methods of using technology to sell to customers direct.
- Accounting and tax - speak with an accountant with experience in serving your niche, also take a look at popular accounting software used by professionals.
- Niche estates agents - search online for a list of agents covering your preferred location.
- Exit strategy - think ahead and have a profitable exit planned.
- Niche blogs - sign up to receive email alerts from popular smallholding themed blogs.
Anything we've missed, or just wanting to pass comment...
...feel free to make a note below, you're most welcome - both our staff and our readers will greatly appreciate it.
Categorised in: Rural Business