Time of chances and challenges

More than half of the population lives in urban areas and around 1.5 million people are added to the global urban population every week, according to professional services firm PWC.

This makes rural business growth and a sustainable future for the agriculture sector global issues.

Bearing this trend in mind, as well as the challenging economic and political backdrop for farmers, how can rural businesses encourage investment and develop assets to create sustainable opportunities and income streams?

At the NFU’S conference, Defra Secretary Michael Gove said: “The more connected we all are to the countryside, the more we know and appreciate what’s involved in farming and food production, the more understanding I think there will be of the need to value and support what farmers do.”

Furthermore, with a main strand of future support from the government based on delivering public benefits, there is a growing need for this drive to “open the countryside for business”.

The good news is that Scotland already has great examples of diversification: from yurts and farm tours, to holiday cottages, soft-play areas and meat and milk sales direct to the consumer.

But long-term success will hinge on attracting more people to the countryside from urban areas: employees, family members with great ideas returning to the fold, or members of the public keen to buy produce or use services and facilities.

Diversification and growth bring the opportunity to address succession. The more successful a farm and its associated enterprises, the more there will be to pass on to future generations.

Involvement across the generations – drawing on varying perspectives, ideas and expertise – can take farms beyond traditional land management and prove central to building a business that will thrive rather than just survive.

Pressures on sources of funding, coupled with the challenges rural businesses face, make being organised and well managed imperative.

These problems – including connectivity, transport links and attracting employees – all need to be addressed but unfortunately, on a practical level, are often largely outside the control of rural business owners.

Auditing the capital of the rural business must be the first step.

A true understanding of the available opportunities will clarify the options for making the businesses as ‘sustainable’ as possible. The ‘capital’ can often be human capital: finding the right person for the job can have a huge impact.

Specialists can advise on the best way to structure a rural business, protect the asset base and review funding options to deliver developments, working in a team to deliver growth and sustainability for a business and create a secure succession plan.

With an ever-increasing burden of regulation – from land reform to employment law issues, brand protection to planning regulations, and increasingly complex environmental law issues – it has never been more important to create a team environment with the right people on hand to support business owners.

That, together with the ultimate end goal for succession, should inform the business growth plan, with preparation for the exit – and re-entry – of members being taken into account, avoiding a situation where the business is negatively impacted by inadequate planning and resultant family disputes.

Trusted advisers can alleviate increased burdens – such as planning regulations, access to funding, business structure and continuity planning – allowing entrepreneurs to do what they do best and help build a sustainable future for rural businesses in an evermore complex and competitive market.

Linda Tinson is director of rural business at Ledingham Chalmers.