Farm Diversification

Background

East Grange Farm, Forres, Morayshire is a 154ha mixed farm run by the partnership of Grigor Butler & Son. The family have farmed East Grange since 1898, previously as tenants, and since 1965, as owners. In the 1980s, as farm staff retired and enterprises, such the pig enterprise, ceased, the farm concentrated on a 150 cow suckler herd and cereal production. In the early 1990s labour consisted of Mr Butler Snr, Grigor and one cattleman. The farm had a traditional steading along with newer buildings.

Why Diversify?

Having worked off-farm for a number of years, Grigor Butler came back to the farm in 1989 and soon afterwards began a small fencing business – his first diversification venture, although this was later discontinued to allow Grigor to assist full time on the farm . The size of the farm (“too big for one person but not big enough for two”) meant that as Mr Butler Snr retired (the cattleman having left), and because of the low profitability from cattle at that time, a strategic decision was required as to the future direction of the farm. The outcome of this was a move to enter into management agreements with other farmers for the agricultural activities on the farm, allowing Grigor to concentrate on establishing diversified activities. The primary driver was a need to increase returns from the business.

Researching the Idea

The idea for the conversion of one of the traditional farm buildings into a venue for music events and parties, together with the addition of a bistro, arose from an idea of Grigor’s that the building might make a good venue for parties. There were no other similar facilities in the area. As the business grew, other, additional activities were researched and introduced to the farm. The purpose of these enterprises, such as the campsite and the introduction of wooden wigwams along with activities such as quad bikes and archery, was to maximise the number of people using the bistro. Research around the area and the fact that other businesses in the area were already offering self-catering chalet and holiday house accommodation led Grigor to focus on the budget end of the tourist accommodation market. Thus the campsite was established.

Funding The initial conversion of the building was partly funded by a grant from the Agricultural Business Improvement Scheme (ABIS). The subsequent addition of a function suite also received funding from ABIS. It was originally the business’s policy to minimise borrowings, hence the gradual development of the various enterprises on the farm. For instance, the wigwam enterprise was started with two units in 2006. In 2009 an application for funding under the Scottish Rural Development Programme (SRDP) for a further six wigwams and lodge and toilets/showers was successful. Following the earlier experiences the business decided that that in order to grow the business at a suitable rate to optimise returns, it would be necessary to seek appropriate levels of bank funding.

Business Establishment

As discussed above, the aim of the business was to grow the business incrementally:

• Planning permission was obtained, the initial conversion of the grain store into the The Loft Venue was carried out and parties and music events were hosted.
• Other activities were also introduced to the farm around that time (e.g. quad bikes and biathlon activities – initially run by third parties and the campsite).
• The bar/bistro was added in 2003 and a further extension to add a function suite was built after this.
• In 2006 the first two wigwams were purchased, with plans for a further six to be introduced in 2010.
• Other activities including dirt carts, archery and “Laser Tag” followed.

The development of the other activities on the farm have been designed both to provide revenue in their own right but also to generate business for the bar/bistro. The business has benefited from three sets of grant aid. The production of well-prepared business plans has been an important part of the grant application process, as well as helping overall business planning. Advertising and marketing was carried out through the website, brochures/flyers distributed in tourist information racks in a range of locations (mainly north of Perth) and inclusion in bedroom information folders in catered accommodation (www.landmark-press.com). Press editorials are also used whenever possible.

Problems Encountered

The prevailing wider economic situation in 2009-10 has meant that securing loans to allow further expansion, such as the additional wigwams and lodge, has taken longer than expected. Where the Business is Now The business continues to expand its range of activities. The Loft can now accommodate larger concerts and parties/functions for up to 300 people. The quad bikes are now run by the business and once staff are trained, archery will also be managed in-hand. The additional wigwams and lodge should be in operation in 2010. 22ha of woodland has been planted and as this matures this will provide scope for quad bike routes and walks (the farm already has a nature walk route). Four full time and 4 part time staff are employed. The development of the various activities resulted in the business rebranding itself. Previously it operated under the “Loft” brand; it is now marketed as East Grange – food, activities and live entertainment.

Critical Success Factors

Grigor Butler believes that getting the right people in place to do specific jobs is important and any business needs to recognise that some key positions need to be filled with people that have the relevant experience and skills. The ability, when called for, to be prepared to have a “leap of faith” has also been beneficial. Diversifying into areas that he is interested in, has some knowledge about and identifying activities that have a market demand, potential for expansion and profit have all been important elements in the development of the venture.