Enterprise stacking

Increasing turnover through enterprise stacking

Enterprise stacking is a form of farm diversification with integration and sustainability at its heart. Farmers Tim May and Dave Oates told the Farming Focus™ podcast how they’re stacking enterprises on their farms to build business resilience.

Tim May was introduced to enterprise stacking in the US but realised it wasn’t something he could do alone:

“They integrated lots of activities in together and tried to use each other's waste streams and build a bigger, more productive sort of farming system. As we started going down that line, we realised it wasn't really a thing we could do in-house particularly, so we needed to get more people involved in the farm.”

Tim recognised he wasn’t looking to employ staff as such, but to develop partnership-type agreements, so began looking for “more entrepreneurial type people”. Tim described it as being disruptive – trying to disrupt the norms, hence looking for those with an entrepreneurial mindset.

Innovative business pitching initiative

He’s done it by setting up an innovative business initiative called Pitch Up! – not to be confused with the global camping booking site.

Pitch Up! is a call-out for start-ups or growing businesses looking for a farm to call home. It involves farmers sharing land, raw materials, retail space or production space, as well as ideas, knowledge and contacts, but also seeing benefits themselves.

Having started it to develop his own farming business, Tim now has five partner farms, of which Dave Oates’ farm on the Lizard in Cornwall is one. Dave puts his involvement largely down to his father:

“My Dad’s got a saying ‘if you're doing it the same as everyone else, you're doing it wrong’. And that's how we very much run our business and our farm, always looking for new things. Pitch Up! seemed quite appealing, new businesses, new ideas, new people. It all just fits with us.”

Successful business partnerships

So far, Tim has been ‘stacking’ the enterprises on his farm using share farm agreements:

“We have a minimum of about 30% financial involvement in the organisation, because if we had less than that, we don't really have enough skin in the game to actually keep us focused. So, we think that sort of level of involvement is useful.

 “The share farming model works because it helps take some of the risk away from the new entrants. But it's really quite bespoke as to where they are in that business innovation cycle.”

While Dave has employed more conventional landlord/tenant agreements over the years, his too have ranged from very formal to very informal, based on need and want:

“It's just kind of see how things grow, just see if an opportunity arises. So long as you've got enough reward in it, it's worth putting effort into, but balancing that with, we've got this space, this opportunity, someone else can take it forward.”

The future of enterprise stacking

Dave admitted predicting where enterprise stacking will lead on his farm is difficult, but in a good way:

“It's a difficult one because you don't know what ideas other people are going to come with. I've got a hundred different business ideas that people could run off our farm. But they've got to come with their own ideas and their own passions because you can't tell someone how to run their own business.

“There is such a wide variety of businesses, and not just agricultural, but a whole array of different industries which could be running off farms. I see a lot of opportunity.”

He sees the term ‘stacking’ as a challenge to farmers to think beyond producing commodities: “Land can be used in so many different ways. My approach is finding different ways to utilise what we've got. And making sure that it's the right thing to do for the future.”

Tim agreed describing how the concept of enterprise stacking led to a change of mindset from reductionist, focused on reducing costs to one of abundance and grasping the opportunities:

“We can improve our biological diversity by having an abundance of capitalist actions going on our farm that we can actually add value, and once we add value to them, then we can get these things up and running, and we can get those ecosystems working. That’s a really important part of what we’re trying to do.”

Balancing disruption and risk to succeed

Tim suggested enterprise stacking is most successful when there’s a balance between disruption and risk, citing the example of the first Pitch Up! enterprise working on his farm:

“It's really about risk and risk management. The first thing we do is to try these businesses out. Look for businesses that don't really impact on your day-to-day running.

“The first person that won Pitch Up! was a company called Monch. They wanted to go around the hedgerows and harvest for sticks and leaves and that sort of thing for their rabbit food business. Had absolutely no impact on my day-to-day business, so it's fine.

“You get the confidence that these things can work, and then you can build that confidence up and make something bigger and better from there.”

Dave also feels the people are as important as the type of business: “It's about finding people that you can just work with and not get hung up on the legalities. If you're worried about the business structure at the point of starting up, you're probably not the right people to be working together.”

How to start stacking enterprises on your farm

For those starting out in this area, Dave advised: “Look at what your farm's got to offer outside of your business. What land are you not using? For many people, that would be woodland, your hedgerows, your corners, a small barn somewhere.

“What's actually making you money and what could you do without? Don’t be afraid just to take something out of whatever schemes or contracts you're under and have a little bit of an experimental corner and see what you can do with it.”

Tim agreed, adding: “So many of these businesses, these start-ups, in that early phase of the cycle, need space and time. And if we can provide space and time, they need that space and time just to be able to scratch the itch and get on with it and try it.”

 

 Enterprise stacking take-home messages

1. Disruption: It’s not about changing what you do, the output or what you produce on farm, but in thinking about how you do it. Can you look at the processes in a different way, re-engineer them or make them simpler and more straightforward for people to take on?
2. Risk: By involving disruption and disruptors in our business, we need to be taking some risks. But without too much impact on our ‘business as usual’, the day-to-day operations. There mustn't be too much conflict, there needs to be just enough.

 

Listen to the full episode at https://www.cornishmutual.co.uk/news-advice/farming-focus-podcast/ - also available via Spotify and Apple podcasts.

 

Tim May is managing director of Kingsclere Estates, farming 1,000 hectares organically in Hampshire, and founder of Pitch Up!

Dave Oates is the seventh generation on Rosuick Organic Farm on Cornwall’s Lizard peninsula, and a Pitch Up! partner farm.