Farm Diversification

Background
The farm is located in the South West of Scotland and is situated on the coast, overlooking the Firth of Clyde.  A business split in 2001 (part of a succession planning strategy) resulted in a reduction in the area farmed by the family.  The farm type is a mixed beef, sheep with a small area of arable land, and the farm extends to around 300 acres.

Why Diversify
The partners were keen to increase the profitability of the unit and also develop a business that could be managed by the farmer’s wife.  Prior to the business split and move to the new unit, a small-scale caravan site had been operated.  This had proved successful and it was felt that a new site could be developed.

Researching the idea
Knowledge and experience gained from operating the previous site (capacity for 20 caravans) was very beneficial in terms of site development, operational requirements and marketing.  Market research, in particular identifying that some local, larger sites were regularly turning potential customers away as they could not meet this demand was also important.  Information on physical requirement (site condition, toilet/shower block requirements etc) was obtained from various sources.

Funding
The initial site was relatively small-scale (Caravan Club Certified Location for 5 caravans).  As such the capital cost associated with the development of the site were not significant.  Farm staff carried out the majority of the site work (laying wiring for electrical hook-ups, site preparation etc).  No applications for grants were made for the site development.

Business Establishment
Contact with neighbouring, larger scale sites resulted in ‘overflow’ customers being directed to the farm site.  As a Caravan Club Certified Location, the farm also advertises through Caravan Club publications and Caravan Club website.  The site required inspection and approved by the Caravan Club (this is an annual process).
 
Problems encountered
The business required to meet Caravan Club Quality Assessment standards before being granted Certified Location status.  Planning permission was not required for a site catering for 5 or less caravans.  An appropriate waste disposal facility was required.  Public liability insurance is essential and wider quality and electrical system checks are required annually.

Where the business is now
The enterprise has operated successfully since it began.  Occupancy rates between Easter and October (the main caravan season) is currently around 80%, which is high compared to average occupancy levels.  Bookings obtained through Caravan Club advertising are high, and more than justify the cost of this advertising.

It was decided to maintain the site at the original size (5 caravans) for ease of operation reasons (further, permanent expansion would require to meet further regulatory requirements and infrastructure costs.)

Two further developments have taken place:- The farm makes available around 2 hectares of land annually for 3 weeks for Caravan Club rallies.  The rally is organised and run by the Caravan Club.  A grass field is used for this purpose and there is no requirement for electrical hook-ups or other infrastructure.  A payment is made for the use of the land.  Secondly, an old cottage on the farm has been renovated for use as a self-catered holiday let.

Critical Success Factors
The location of the farm (and caravan site) is very important, given the venue and proximity to other tourist/holiday activities in the area.  The willingness of the partners to engage with visitors also enhances the holiday experience for those visitors and encourages repeat visits and word of mouth recommendations to other potential visitors.  Maintaining a high standard of facilities/site is also important (e.g. regular grass cutting, regular cleaning of waste disposal facility).

Contacts
www.caravanclub.co.uk