“Appraising enterprise strengths and weaknesses” 

Good marketing means understanding what products and services customers will pay more for, and supplying them profitably.  

The most effective marketing businesses are those which have examined their own enterprises to get the best fit possible between what the market place wants and what their businesses are capable of  doing. The most usual way to do this is through examining the strengths and weaknesses of the current enterprise, and opportunities and threats presented by the market place – commonly known as a SWOT analysis. 

Previous articles in Farmers Guardian have examined the various market place opportunities and stressed the need to think about the market place first, before producing a product in line with consumer trends. They have identified some problems, or threats, which may be encountered. And they have suggested that the farmer should map out the customer and product options available to help grow the business. 

The next step is to take a long hard look at the farm itself and assess the strengths and weaknesses of the current operation. In order to think as broadly as possible about the farm and its potential it is useful to consider the question of “what business are we in”. The answer could be the food business, which might lead to a decision to move further into the food chain. Or it could be the business of  land and asset management which could lead to diversification projects unconnected to farming. In terms of the analysis itself, the main areas to be judged are set out below.

LAND                                                 STOCK                       CROPS          

Quality                                                 Breed                           Conventional/

Quantity                                               Quality                         Novel

Type (eg woodland, river, pasture)        Price/grades achieved   Quality/yield

BUILDINGS                                      LOCATION               CUSTOMERS

Age/attractiveness                            Central/remote      Who are they

Repair                                               Scenery                   What do they pay

Flexibility                                          Wildlife                    premiums for                                                               Tourism potential    Relationship quality                                                                   

FINANCIAL                                      PEOPLE

Profit performance                            Skills/experience

Understanding of costs                     Interests

Gross margin of each enterprise       Likes/dislikes

Financial resources

Borrowing capability

Such an analysis will, at the very least, help to identify strengths to build on and weaknesses which can be corrected.

It should help pinpoint realistic alternatives which can be relatively easily implemented, whether this be dealing with different customers, using a portion of arable land to grow novel crops, rearing different breeds which may command a premium, or finding different uses for buildings. The gross margin assessment will show which enterprises generate the most money and which must continue to receive strong management focus to maintain profits regardless of any other changes which maybe taking place.

 For those who have radical plans it will help pinpoint whether the market opportunities identified can be easily exploited, or whether major changes will be required for success.

 The analysis of  enterprise strengths and weaknesses needs to be brutally honest, and the more radical the changes being considered the more thorough and realistic the analysis of both the market place and the farm enterprise needs to be.

Secondly, the factor which can make or break any new venture is  management skill. This manifests itself in several ways. For example, reliable staff  have to be hired, trained and retained. Existing cash generating enterprises have to be closely monitored to ensure performance does not slip whilst the new initiative is being developed.

The company lending money for the new enterprise, whether bank or development agency, will require progress updates.

And, returning to the theme of putting market place understanding and customer focus first, management will be required to spend time with customers to sell the benefits of the new business, to keep up to date with trends, and to adjust activities to maintain growth and profits.