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Tips and tricks to secure a Farm Business Tenancy

How do you secure a farm tenancy? What can you do to improve your chances of success and what preparation can you do to help stand out from the crowd. Danusia Osiowy speaks to the Tenant Farmers Association advisors and land agent Carver Knowles for advice. 

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Where do I start with a tender for a farm tenancy?

 

Tendering for a farm can be life changing. You may only do it once or twice in your farming career, so it is important you know what you can prepare for before and during the application process.

 

Landlords want to get to know you and establish if you balance the books, run a successful farm business and, ultimately, can afford the rent. The tender is your one chance to prove you have this ability.

 

Land agent Carver Knowles has put together a quick 15 minute business plan, outlining the key issues potential applicants need to think about to give an application the best chance of being considered.


The Checklist

  1. The opportunity
  • Briefly detail the proposal and why this provides you with an opportunity
  • Is there anything unique you bring to the tender?
  • Talk about a vision for the business/property
  1. Your background
  • How did you get into farming?
  • What sectors have you worked in?
  • What experience do you have?
  1. The proposal
  • Summarise what you would do on the property
  • Does this use all the property’s assets in terms of houses, buildings and land
  1. Business enterprises
  • Summarise each proposed enterprise
  • Say why you have chosen each enterprise, for example if it is the best use of resources, experience, rotation or location
  • Comment on possible outputs yields, markets for stock
  1. Strengths and weaknesses
  • A strength is good, but a weakness turned into a strength is better
  • List strengths first, including both what are you good at and what areas do you enjoy most
  • Outline weaknesses and threats and think about how you intend to overcome them. This is important as, even if this is not included in the final submission, it prepares you for likely questions
  1. Finances
  • What is your current net worth including all assets against all liabilities?
  • What is your current financial state? Include your recent accounts, current bank balance and loans or credit cards
  • What funds are needed to take on the tender property?
  • Where will these funds come from?
  1. Other issues
  • Consider environmental benefits or enhancements you can bring?
  • Do any grants or other funding opportunities look likely?

Having outlined these points, you have a skeletal business plan including all aspects of your tender application which the landowner and letting agent will want to see.

Now all you need to do is prepare the application.


Improve your chances before applying for a tenancy

Qualifications

Before you take on your first tenancy the main way to prove to a landlord you are dedicated to the industry is to provide evidence of training, qualifications and experience

 

Training

If you do not have a past landlord who the prospective landlord can take references from, then this will be the area the new landlord will focus on. The more training and qualifications you can achieve which are relevant to managing a farm business, the better

 

Experience

If you have not had a great deal of hands-on experience, volunteer to help a local farmer or get a job in agriculture, otherwise it is highly unlikely you will be considered

 

Potentials

When looking for opportunities, don’t limit yourself to one area. Good places to look are the farming press, land agents and county councils as some have waiting lists. Members of the Tenant Farmers Association can also access the organisation’s website where tenancies are advertised

 

Network

Getting to know local agents and businesses which deal with landlords and tenants is essential. In rural practice, everyone knows each other, so if you can prove you are young, enthusiastic and reliable, word will spread

 

Events

Plan to make the most of show season and research sector specific events through the year. Speak with exhibitors and meet land agents on their show stands

 

Research

When you eventually want to apply for a tenancy, creating a business plan and completing formal tender documents is not easy. Take time to familiarise yourself with the letting terms and take advice if you need it

 

References

Bear in mind you will be expected to provide references from professionals, such as your bank manager or accountant, so plan your finances carefully

So you arrange your first viewing- what next?

  • Look smart – create good first impressions
  • Make the most of your time by walking around, assessing land and buildings and getting a feel for the place
  • Be polite and ask questions to develop a relationship with the agent
  • Gather as much information as you can from either the outgoing tenant or neighbouring farmers
  • Go back for a second viewing
  • Check you first impressions by going back to be clear about what farming system you will adopt and what suits the farm
  • Ask yourself what improvements you need to make and how much they would cost. Take a friend or professional for a second opinion

When you prepare your tenure

Before applying, understand your landlord’s motives and objectives for owning the farm and letting it out

 

Do your skills and knowledge match what the landlord is looking for?

 

Organisations such as the National Trust and county councils generally look more favourably on an applicant who are prepared to deliver its wider objectives, such as those having commitment to enhancing the natural environment or those with an interest in educational visits and public access

 

Give yourself time to prepare the business plan and tender documentation – it will take weeks to prepare a well thought-out tender

 

Your tender should be based on the information you have about the farm, mostly gathered on viewing days and from the particulars. If a draft tenancy is available, familiarise yourself with its terms

 

You may be required to prepare extras

  • The landlord will inevitably want to know details about your budget, cashflow and balance sheet
  • These are to demonstrate the viability of the business, show your current assets and how you would finance taking over the farm and any desirable improvements you intend to make. These skills come with practice
  • Consider discussing this with a Tenant Farmer Association adviser or a professional, such as a chartered surveyor, to help you put your application together
  • If you do it alone, take ownership of your business plan and budgets. Present the information in a clear and logical way; your figures will have to stand scrutiny and questioning

 

How much do you tender?

Decide on a rent which is sustainable

 

Do not overestimate the rental value. It might win the farm, only to leave you with a huge financial burden and failing business

 

The Tenant Farmer Association has a rent databank full of comparable rents, so look at the pattern of rents in your area

Make sure you think about all costs and work out what you are actually paying for

 

Be realistic. Improvements and repairs will cost you time and money and, until they are done, they may hold you back

If you are successful

  • The landlord will provide a written Farm Business Tenancy agreement
  • Before signing, check it contains the terms you expected
  • Preferably seek professional advice to ensure the agreement is correct
  • If you are thinking about diversification, make sure it is permitted within the terms

Expect to be asked...

In last week’s Farmers Guardian we caught up Yorkshire farmer Jonathan Grayshon, who recently won a tenancy at Humberstone Bank Farm. He tells us some of the questions he was asked as part of his application:

 

  • Please summarise your key objectives for managing the farm
  • What practical experience do you have of managing an upland farm?
  • How will the proposal conserve and enhance the interest features of the Site of Specific Scientific Interest/Special Protection Area/Special Area of Conservation?
  • What plans do you have for monitoring natural environment features, including biodiversity, carrying out scientific work and encouraging research interests?
  • How do you see sheep and cattle (or other livestock) grazing fitting into your plans?
  • What would your objectives be for supporting the local economy?
  • How would you propose to engage with the farm’s different stakeholders?
  • How would you improve education on catchment and upland management?
  • What would your financial contribution to the farm be?
  • Would you envisage proposals for any new capital developments and if so, what would be your rationale and means of delivery?

 

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