Carter Jonas
Carter Jonas

Understand your business in these challenging times

There is no doubt farmers face challenging times at present and for some this can be a very lonely place.  As losses mount there may not seem to be any obvious route out of the situation and sometimes discussing this with close family or friends may not be easy.

If you find yourself in this situation, it is often worth discussing your concerns with someone you trust who also has an understanding of the farming industry. Whether that be your accountant, farm consultant or land agent; the important thing is that you get a fresh perspective on your business because the answers may well be staring you in the face but for some reason you may find them difficult to address.

The first thing you need to do is get a clear understanding of your costs; both fixed and variable so you can start to benchmark yourself against industry standards and in so doing start to identify where the issues lie.

For example, high machinery costs may indicate that you need to consider running your farm in a different manner, perhaps selling some of your machinery and using contractors to undertake work that you have traditionally done yourself. This could also lead to the possibility of reducing your employed labour.

Perhaps you identify high finance costs and restructuring your debt may be a possibility. If this is the case don’t be afraid to speak to your bank manager - most are generally pleased to hear from borrowers looking to be proactive in addressing difficult times. In this context one may consider extending the length of a loan to reduce the level of capital repayments or paying interest only for a couple of years to help the farm through a short term cash flow issue.

These are just a couple of examples you may identify. The easiest thing to do is nothing, but doing the same as you have done for decades is very often not the answer.

That was very much the message from more than 100 farmers who attended a seminar at the Bath and West Showground hosted by Carter Jonas and Old Mill accountants.

Neil Cox and Mark Seager from Old Mill addressed a wide range of tax and financial issues currently facing farmers. Kit Harding and Hollie Hembrow of Carter Jonas reviewed the land market and the general consensus from all was that now, more than ever, farmers need to understand their own businesses. In so doing they would be in a position to make the hard decisions that may be needed to survive or indeed exit the industry themselves rather than having those decisions imposed from outside. Having seen the latter happen to a number of individuals during the last year, this is not a happy place to be.

James Stephen
Partner, Wells Office
james.stephens@carterjonas.co.uk

James Stephen

James Stephen

Partner

James is a partner who heads up Carter Jonas’ South West rural operation, managing the teams in the four offices of Marlborough, Bath, Taunton and Truro.  He primarily works out of the Taun...

Read more

01749 683381