Guiding Farming Businesses Through Diversification
Published on 6 May 2019
Blog – EQ Chartered Accountants
The agriculture sector can be one of the most lucrative industries but also one of the most unpredictable and one which requires huge financial investments.
For that reason, farming, especially family businesses, benefit from tailored business support, particularly when looking at diversifying into other projects to compliment traditional farming practices.
A prime example is Melrose Farms, near Banff, Aberdeenshire, run by Dougie Allan and sons David (42) and Stuart (37). In the 1960s, the late Reggie Allan bought Mains of Melrose and built it up with his two sons Dougie and Gordon into a farm growing arable crops, potatoes and livestock. In 2007, Gordon retired with Dougie, David and Stuart taking over the reins.
At that time, Dougie approached EQ Chartered Accountants, one of the leading providers of accountancy, taxation and business advisory services in the Scottish rural sector. The enterprise now incorporates four wind turbines and a rapidly growing haulage business.
EQ took on the role as the farm’s agricultural consultants, supporting the family with all of their finances such as annual accounts, tax work and brought them into the ‘digital world’, with Mark Smeaton, EQ Partner and specialist agricultural accountant, handling their financial affairs and visiting the farm regularly.
Stuart said, “When we took over the family business, we had every faith in our own abilities as farmers but needed some guidance and support when it came to banks, borrowing and so on. It’s particularly important to us that Mark comes from a farming background because he knows what’s important and how the sector works, as well as the challenges farmers face. He understands the language too which is very important and meant that we could hit the ground running from day one.”
Things rarely stand still at Melrose Farms and, in 2010, the brothers decided to diversify into the renewables sector with three wind turbines being erected in 2015, followed by a fourth a year later in a joint venture with Muirden Energy. Operating alongside their renewables venture, the Allans have expanded their haulage fleet from running one lorry in 2015 to now running five.
With such significant additions to the business portfolio, EQ assisted with the farm’s projections, identifying and securing the best interest deals in the process. EQ also work closely with other professional advisors such as banks, land agents and solicitors, ensuring a cohesive, comprehensive approach to the advice which the family require.
Stuart and David are both of the opinion that their business has transformed since they started working alongside EQ. It is now a completely different ball game and one that they are very proud of.
Stuart added, “EQ become immersed in any new area that we wish to explore, ensuring that we get the best possible advice and guidance on whether to pursue a new business interest, or leave well alone. There’s a perception that accountants just deal with your accounts but EQ are much more than that. They’re always at the end of the phone when needed, guiding us in decision-making as we go through a typical year. EQ really are worth their weight in gold. We’re always on the look-out for the next business venture but wouldn’t do anything significant without consulting them first”.
Mark Smeaton said, “We work with a wide variety of agricultural clients who require bespoke advice and assistance on a regular basis. We have a strong understanding of what our rural businesses want from a new project, whether it be a renewables business like the Allans to financing some farm equipment or buying land.
“It’s a pleasure working with the Allans, they appreciate the advice and input we provide and given that our presence in Aberdeenshire is rapidly growing it’s a privilege to be able to offer our services to so many tremendous rural business in the North East of Scotland. We are committed to providing a personal service to farmer, to ensure that we understand their business and aspirations for the future.”