Think like an entrepreneur
In general, we have emphasised in our articles that the challenges for farming in South Africa are becoming more and more. Our farmers are experiencing challenges with regards to their farming businesses, whether small or big, at an increased level. We experience more political insecurity, more marketing challenges, more of the cost-price squeeze and more of the changing climate, to name but a few challenges.
Thus, in the business world of today, especially agriculture, the business environment is ever changing and shifting making survival very difficult.
In previous articles we have emphasised the aspect to diversify your business to address these challenges. Investigate to diversify your business into a few enterprises aiming to increase your income and manage risks. The advantages of diversifying – improved cash-flow, spreading of risks, increasing of profit – outscores the disadvantages. If you do not consider diversifying your business, you will battle to survive as a farmer in South Africa. But, many of you will argue that your farm is too small to diversify. That may be true but there are other ways and means to diversify of which agritourism is but one.
Normally diversification entails a combination of farming enterprises that are not subject to the same risks. For instance, diversify into crops that have different growth periods and are not equally susceptible to drought. The addition of a livestock enterprise will have a great effect on lowering risk. But remember, the more diverse enterprises are, and an agritourism activity is just that, the more risks are countered.
A farmer will often think they do not have the capacity and resources (funds, property, staff or activities) to open their farms to visitors. However, a businessman will realise that you do not need five-star accommodation or complex activities to attract tourists. Concentrate on extraordinary and friendly service delivery and see to it that whatever you do is of a high standard.
When considering an agritourism venture bear in mind that location will be a key factor in success. Easy and readily access to your property will be a great advantage. Thus, being close to a big town or city with better roads or close to main roads will enhance the possibility of success. In the Farmer’s Weekly a while ago, there was an article of a wine farmer on a rather small wine farm who realised that to compete with the well-known brands of wine in the formal market will be very challenging. Because of a favourable location, close to the Cango Caves and Oudtshoorn which draws many a visitor, they ventured into a new on-farm agritourism business with a small restaurant and a wine-tasting facility serving their own brand of wines and beer. An old packing shed on the farm was turned into the restaurant and the tasting facility to reduce initial costs. Because of a unique product and excellent service, their main marketing is nowadays via social media and word of mouth.
Today’s tourist wants to do something else – they are looking for ‘different’ experiences outside the urban environment. Tourists often also want to buy locally produced articles and goods. Capitalising on agritourism opportunities can generate additional income and can become a lifeline for those struggling to keep their farming businesses profitable.
Start small, for instance, start with a one-bedroom bed and breakfast facility and/or a small restaurant serving local traditional foods and/or a small shop especially selling local and self-made articles. Add some outdoor activities – cycle trails, horse rides, excursions on a donkey cart, ox wagon, tractor and trailer, opportunity to fish – to ensure a constant additional income. Expand according to demand.
Quite recently there was a documentary on TV regarding a gentleman from Kenya, who now resides in Cape Town, who started a business with old flippers. The flippers glued together are used to create colourful ornaments and toys. With this venture he also created jobs – he pays people to collect old flippers. This is just another example of thinking like a business person.
Of course, just as the rest of your business, this agritourism enterprise will also have to be managed properly by good planning, organisation, implementing and control of all the management areas. The one management area that will need a lot of attention is marketing. But here again for starters make use of social media at a very low cost. The trick with social media is to regularly update information and get visitors to participate in posts. Word of mouth also plays a significant role as advertisement.
The message of this article – stop thinking of yourselves as farmers, start to identify yourself as a business owner/manager, or in today’s term an entrepreneur, and think and act like one. Stop thinking how you can grow the profit of your farm; think how you can grow the profit of your business.
Publication: September 2019