Our previous blogs explored the three key stages of a farming business’s lifecycle, starting with an overview and then delving deeper into Phase 1 – Starting Your Farming Journey. Now, we move into Phase 2 – Establishment & Expansion, where the foundations laid in the early years are put to the test as the business matures and grows.
This phase is one of the most demanding yet rewarding periods in a farming business. With the proper governance, farmers can set their businesses up for long-term success.
Multiple parties are often involved in this ‘middle’ life stage of farming. Those with family farms go through a transitional stage where multiple families may be involved and/or living on a farm. Those who have built up equity under their own steam may have business partners in an equity partnership. This can be great as you often have different skill sets around the table, but it can also cause conflict if not managed correctly.
It’s important that the incoming generation makes their mark by bringing fresh ideas to the table. This might be done by introducing new technologies or different farm policies. This new energy is important so that the farm business remains viable in a rapidly changing environment.
At this stage, the farm or its owners are often at peak debt levels, which can put significant pressure on cash flow. There are often hard deadlines for the outgoing generation or business partners. At the same time, many farm owners are at their busiest life stage — balancing the demands of a growing business with raising young families and managing multiple responsibilities. This is why strong farm governance is crucial.
Having a solid advisory team and holding regular governance meetings — quarterly or at key seasonal points — ensures accountability and helps steer the business toward long-term goals. These meetings provide a structured space to discuss key topics, including:
Farming does not follow a predictable, linear path — there is no simple rinse-and-repeat formula from year to year. Weather conditions, market fluctuations, and economic factors (such as commodity prices and interest rates) can cause major shifts. Regular governance meetings with your accountant, bank manager and farm advisors ensure all stakeholders stay aligned and on the same page.
We are seeing a growing emphasis on farm profitability, with the reliance on capital gains becoming a thing of the past. We recommend implementing farm reporting software such as Figured or Farm Focus to enhance financial transparency and enable better decision-making across the business.
If the Establishment & Expansion phase goes as planned, farmers who successfully navigate this stage can establish a farming enterprise with manageable or minimal debt. This opens up significant opportunities, including generating substantial income, making lifestyle choices, and providing their children with the chance to succeed in the farming business, among other options.
At +MORE, we help ambitious business owners achieve their goals. We’d love to connect and support you on your farming business journey.
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