Forward-thinking farms and rural estates are constantly on the lookout for new income streams, especially when farm incomes are under pressure. Of the many diversification routes available, opening a farm shop is a popular choice. But before you embark on a venture that could cost hundreds of thousands of pounds, here are some key questions to consider:

Are you ready for a career in retail?

Retail is a very competitive sector, far more so than agriculture. To be successful you need to understand a broad range of skills from people management – that’s staff, customers and suppliers – to merchandising, marketing, consumer trends, margins and Electronic Point of Sale (EPOS) systems. Take time to research and learn before you invest any money. Visit shops, subscribe to magazines, read books, seek advice. In short, do anything you can to find out more.

Are you a leader?

Many people focus on location as the key to a successful farm retail business. However, more often success is based on great leadership and management. As the owner of the business, you will not only have to scrutinise all the detail to make sure you maximise sales and margins, but you will also have to lead a team to ensure that customer service, business values and production standards are maintained all day, every day. Investment in your management and leadership skills must therefore be part of your business planning.

Are all customers like you?

Customers are individuals and will react to products, store layout and design as well as customer service levels differently. For example, simply because a road carries lots of commuting traffic it does not mean these cars will all stop at the shop – just think about how you behave when you are heading to or from work.

Identify your key target groups and focus on how you can create a business which fits these needs. It is also valuable to look at any changes that will be happening in the area over the coming years as issues such as new developments, aging populations and house price changes will all influence your target audience.

Can you produce it all from the farm?

Many new farm retail businesses have great intentions to supply everything from the farm or from farms nearby. However, they soon find that this is very hard to achieve. Supply fluctuations during the year, insufficient suppliers of a diverse range of products and customers demanding out-of-season produce all create challenges.

Think about the key elements which will make up your brand; be realistic about what’s possible to make a financially viable business; and be able to communicate these strengths to your customers.

Ready to take on these challenges? Then it’s time to start planning the business.

Further information

Visit the Farma website or contact Savills Agribusiness