There is a plethora of so called “experts” offering landowners professional and well intentioned advice on how to diversify. A fair proportion of advisers have, however, a vested interest for you to spend your hard earned cash on an exciting new project. Architects, planners and surveyors all relish new build opportunities for the fee income it will generate for them. Likewise pod and lodge designers are desperate for new sites to show off their latest glamping products. Eco energy equipment and telecoms manufacturers need land to install their kit. Having attended numerous trade shows and exhibitions during the past 12 months it is easy to get carried away with the enthusiastic sales pitch that often comes with these opportunities. Before you take the plunge and place an order you should set time aside to carry out your own thorough market research. The key starting point in formulating a diversification plan should be the business case underlying the proposition;
- Is there sufficient demand for your product/service?
- Who is the existing competition?
- How can you set yourself apart from competitors?
- What are the market trends in the sector?
- Is the business sustainable in the longer term?
Seek out advice from independent sources. Be cheeky in your approach and counsel second opinions from individuals with relevant business experience who have actually worked at the “coal face”. It is common practice for sellers in any sector to focus their proposition on turnover and sales revenue. Often forgotten are operating costs hidden in the fine print of their glossy blurb and it is critical that you can identify these to establish the real net profit margin and breakeven point for the venture. Once you have had the chance to verify the returns that you have been promised you will then be in a much better position to work out the payback on the investment. If the project still looks as though it will meet your financial needs you can then decide which supplier(s) to use to implement your plans.
If it sounds too good to be true, the best advice is to proceed with caution!
This article has been contributed by Nick House, the Managing Director of House Nouse. If you have any questions relating to diversification, feel free to get in touch with him by emailing email@example.com or find out more at: www.housenouse.co.uk If you have recently diversified your business, why not enter our Best Rural Diversification Project category? Find more information here: www.ruralbusinessawards.co.uk/enter/
SPECIAL OFFER: Site Appraisals for Holiday Lets
If you would like to arrange a no-obligation assessment of buildings/land to convert into a holiday let or to set-up a glamping site, then Nick House at House Nouse is your go to person. Nick is based in the Cotswolds and is prepared to travel across the country to visit sites. As a special offer he will waive his fee for any viewings arranged and completed by 31st March 2019. Please note that depending on the journey length a contribution of up to £50 may be requested to cover for the mileage costs incurred.
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