A ‘SWOT’ analysis looks at strengths, weaknesses, opportunities and threats facing a business. Andrew Jenkinson, partner and farm business adviser at Robinson and Hall, outlines key areas to examine.
Are they fit for purpose? Can you make better use of items, such as sharing machinery, contracting, or turning unused buildings into holiday cottages, events premises, offices or storage units?
Is this legally clear and documented? Who is the owner/tenant of each enterprise and property? Have you got succession rights under tenancy and do you meet the tests for succession?
Does your team and/or family have the skills needed for now and the future? What are people’s retirement plans? Are you doing things to retain good staff? Can you use people’s skills and interests to create a new enterprise or improve an existing one? How can you fill gaps in skills? Do you have contingency plans for sickness, absences, or staff leaving?
Do you have the skills needed? If not, how can you acquire them? Do you have contingency plans for if something were to happen to you? Is your knowledge recorded to assist future generations? Is there an opportunity to channel your own skills and interests – either in the current business or a new enterprise?
Have you got plans in place for handing over the farm, and retirement (e.g. wills and partnership agreements)? Does everyone in the family know what will happen and have they agreed to it?
Does your location offer opportunity? For example; is it a beauty spot which could be used for weddings, retreats or camping? Is there a need locally for housing or offices?
What are the timescales involved in any new plans and how will you finance any investment? If investing in buildings, do you have the skills and time to build yourself?
Do you clearly know your financial situation? Can you cut costs and improve efficiency? Do changes to investments, government policy or anything else, threaten profits? Do you have contingency funds for things like a bad harvest, disease, or market plunges?
Are the supply chains for your inputs and outputs stable? Could you put yourself in a stronger position to buy/sell? Have you shopped around for suppliers and customers? Have you looked at your contracts and considered joining a buying group or co-op?
Can you afford your borrowings if interest rates rise? Do you know how much capital and interest you are paying back each year including hire purchase? Can you make extra payments to reduce your debt?
Do you have balance? What is at risk if not? How can you create a better balance? (See ‘Building resilience’ at the Co-op Hub).
Where is the market for your products heading? Are you properly plugged in to trends and prices? How can you buy and sell at the most advantageous times?
Is there an opportunity to expand an existing enterprise? Would further specialism be helpful? Are there markets you haven’t thought of? Are your enterprises making money or should you focus elsewhere?
Stress-test your business for changes to subsidy payments and trading relationships with other countries. How will you remain competitive, or should you look at new market opportunities? Will you still be able to access the inputs you need? Will your customers be affected? How could you turn likely changes to farming policy and payment for public goods into opportunity?
Watch changes to government policy and understand how this might present threats or opportunities. For example, the Government plans to change the law to allow people to marry wherever they like – could this create an opportunity for a wedding business? Or, if that is already an enterprise, does this present a threat?
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