There is a lot that goes into setting up a farm shop, so much so that it can become very overwhelming especially if you are setting it up on your own.
You will need to take on many different job roles, some of which will be completely new to you, but the rewards of owning your own farm shop can be extremely worthwhile.
Check out Appetite Me’s steps on how to set up a farm shop to help get you on the right track.
1. Pros & Cons
There are many pros and cons that need to be taken into consideration when deciding whether to set up a farm shop or not. The main question you need to ask yourself is why do you want to set up a farm shop. There is no doubt that running your own farm shop can be a very rewarding and exciting experience, however it is crucial to understand that a retail business is not a hobby but a lifestyle choice. The work load can be challenging and the hours long but if you go into it with your eyes fully open you can be rewarded with a truly fulfilling experience.
It is important to decide how hands on you want to be from the beginning, setting up a business for a professional manager to run on your behalf is very different proposition from managing it yourself. If you are going to be managing it yourself make sure you equip yourself with all the skills and knowledge you will need to carry out this role. Being a very customer focused line of business you will need to enjoy interacting with the public, as you will spend a lot of your time serving and attending to their needs and inquires. You also need to wear many hats now you are your own boss, you will have to be the managing director, HR, IT department, head buyer and cleaner, so you will need to be confident that you are happy to take on such responsibility.
2. How To Get Started
The principle of a retail business is super easy, you buy it in and then sell it at a higher price, simple. However, although it is easy to set up a farm shop to operate a successful farm shop is another ball game. There are many components to setting up a farm shop that people don’t take into consideration. You will need premises, stock, staff, fittings and fixtures, a legal identity, an administrative system, branding, marketing and website to name a few. If you fear that you don’t have experience or knowledge in some or all of these areas it is best to consider getting a consultant in to ensure everything is in place and set up to run smoothly.
Making sure your farm shop is set up from the beginning is crucial to its success, as it will be a lot harder to fix any problems that arise whilst operating and running a brand new business. It will also be the first impression your customers will have of your shop, if they have a bad experience or things aren’t complete and in running order you fear losing potential regular customers through bad planning. Make sure you have a plan in place that lists all key areas of the business you need to consider and how you are going to manage and set up each one. It is worth creating a check list to run alongside this with deadlines so you can see how your project is running along with the timescale. It is at this stage that you should also start thinking about your business name, USP and ethos so you can build these into all areas of the business as the development progresses.
3. Finding a Location
Whether this is a new build or on an existing piece of land or building you own, or you are planning to look for a new location all together, there are a few things that need to be taken into consideration. Location and access to your location is very important to the success of your farm shop as if it is difficult your customers to get to they will not visit your farm shop. Make sure access to your farm shop is simple and easy, and you have a dedicated car park for customers to park, apply for appropriate directional signs to help people find you, and have all your information up to date online and on google and make sure the entrance to your farm shop and car park are obvious and well signposted.
There is a balance to having a prominent site with lots of passers-by traffic that generates its own customers to the less prominent site where more advertising will be needed to get your business known. The main factors you need to consider when evaluating your potential site is population, passing trade, transport and access (including car park), competing shops (within a 20 mile radius), planning permission and possible future changes. Make sure you do your research into these before you invest too much time and money into your project, it is best to see any pitfalls as early in the process as possible.
4. How to Produce a Business Plan
A business plan, also known sometimes as a feasibility report, is a fundamental tool for the success for your business and can be an invaluable tool when applying for funding and grants. It will also work to your own benefit by allowing you to see the potential of your business and if it is feasible for it to go ahead, by enabling you to see it in a structured and logical way. It is important to do your business plan properly and carry out in-depth research or get a consultant or expert to create one for you, if you are not confident in creating one yourself or do not want to miss any important components. A business plan should include everything from plans and budget, local competition, potential risks and obstacles, demographics and target audience, through to CAPeX costs, profit and loss and potential business growth and development.
When creating the CAPeX costs and profit and loss predictions there will be some numbers that will go into your plan and be pretty accurate, for example your business rates or council tax. However there will be some figures, some of which that are quite crucial, such as predicted sales which will be based more on an educated guess. Try and be conservative in your predictions, as sales are more likely to build gradually and you need to allow yourself a margin of safety. As there are so many costs associated with running a business, it is easy to forget them especially if you have never had any experience in this industry before, it is best to get an expert to cast an eye over your business plan as they will be able to spot any missing elements and potential problems.
5. Funding Opportunities
Many projects need an element of funding to be able to get them off the ground, and there are a few different options that could potentially be available to you and your farm shop. Before we proceed with these its best to understand the terminology used to describe the different types of cost.
Set up costs – these are one off costs associated with a new business, which can include registering the company, legal and professional costs, and launch marketing expenditure.
Capital expenditure – these relate to items that will last for some time and will therefore be written down on the accounts over a period of time, these include fittings, equipment, refrigeration and vehicles.
Working capital – are payments that are recurring such as buying stock and paying wages.
There are five main ways you can secure funding for your farm shop these include bank loans, bank overdrafts, grants, private investors and friends and family. With all these options the third party will expect you to demonstrate your commitment to the venture by putting some of your own money into the investment. With the options listed it is best to do your research, and potentially seek professional advice to make sure you are picking the best option that works for you and your business plan.
6. Create a Great Looking Shop
People decide to shop in certain shops for a variety of different reasons, some emotional and some rational. How people view your shop is very important, so how it looks and feels is a key factor in its success. Relook at your business plan at the demographic and target audience to see who your shop needs to appeal to, for example you don’t want a colourful, edgy, design led farm shop if the majority of your customers are pensioners. Look at what others are doing for inspiration and be sure to put your own twist on it. You will want a bit of your personality to shine through. It is also important to consider practicalities of your design, for example pale and plain coloured floors will show up dirt and marks from customers shoes far more than darker coloured or patterned ones. Although the look of the shop is very important do not sacrifice the layout and functionality over the look of the farm shop. You want to make sure you optimise space to the best of its ability to maximise potential revenue. Also look at the flow of the layout of the farm shop, is it easy for your customers to move around, are they able to be lead around the whole shop, are products easy to find and are they categorised effectively and coupled with complimenting items for the potential to up sell. By having an easy to use, well thought out, beautifully designed shop you will be providing your customers with an enjoyable experience which they will keep coming back for.
7. Fixtures & Fittings
Along with the layout of your farm shop you need to consider what fixture and fittings will not only work with the layout but also work with the products you wish to sell. It is worth considering hiring a professional, as they will be able to produce a layout that is in line with your specification, fit in with your sales area, and create a design that optimises space and showcases your products. Make sure shelving is adjustable that way you have the freedom to change up displays and move things around when needed. As ranges will change with the seasons throughout the year, the more you can make your fixture and fittings work for you the better.
You will also need to take into consideration where power sockets, refrigeration units, counters and radiators are going to need to go, and make sure these do not compromise value space you could be using for retail. Each square metre of space is costing you a lot of money in terms of rent, rates, heating, lighting and cleaning each year so you want to make sure you are getting the most financially out of that space.
8. Let’s Talk About Stock
What you stock in your farm shop is very important and needs to fit into a set of criteria’s for it to appeal to your target audience and bring in good revenue. Being a farm shop customers will accept a lot of the produce to be local or regional and sourced from small artisan food suppliers rather than mass produced. Do your research and look at who is in your area, a great place to do research is at local farmers markets or visiting your competitors. Because your customers will expect a higher quality of product than what they get in the supermarket they will also be happier to pay a slightly higher price for it. Work with the seasons and make sure you change your offering to suit the time of year, it is also a great idea to invest in gifting lines on special occasions like Easter, Christmas and Mother’s day, as these are normally high margin lines.
You also need to make sure you cover the key ranges in your farm shop to ensure you meet your customers needs. This can be achieved by having a mix of ambient everyday pick up lines and higher end ‘treat’ and gifting items. Work with your suppliers by creating strong partnerships, encourage them to do tastings and events at your farm shop, and cross promote each other on social media. By doing this you are not only being seen as playing an active role in helping the local community, you will also be exposed to a wider audience who may not have otherwise found you. Make sure you keep an eye on stock and waste levels to make sure you are ordering effective, this can be achieved through an EPOS system which will also help you get accurate sale data, which ultimately will save you time, reduce waste and increase revenue.
9. How To Manage And Run a Farm Shop
It is important that you decided early on whether you are going to manage the farm shop yourself or employ a manager. If you decide to hire a manager, take a step back and let them manage as they will have the experience and knowledge to implement and achieve the overall strategy, targets and direction you have provided for them.
If there is more than one person managing be sure to establish clear reporting lines and make sure these are stuck to.
There is a real danger that in your business you will spend all your time responding to problems. You may want to be the person who deals with all customer complaints personally, decide on all orders and set all prices, however you just won’t have the time or mental space to make that possible. How are you suppose to think and plan promotions, organise the replacement of old or faulty fittings or equipment, introduce a new and on trend line, keep track of your competitors or even watch customers browsing your shelves, when you are already spreading yourself so thin, when you could be delegating such jobs so you can focus on the jobs you need to do.
10. Promotions & Marketing
Marketing and promoting a new farm shop has several aspects to it. It helps make potential customers aware of its existence, raise interest to encourage a visit, encourage customers to spend whilst in the shop and ensure they return for further visits. When developing awareness to your farm shop it is important that you take into consideration your target market, your location and how far you expect customers are prepared to travel. This in turn will help you decide how to promote your farm shop offline and on what radius you need to expand your advertising efforts to. There will be a lot of people that will visit your farm shop purely out of curiosity, but how do you make these into regular visitors? Ways this can be achieved is through having a great offering, holding events throughout the year like tasting days and have seasonal offers and promotions.
It is so important that you have an online presence, which includes but is not limited to a website, google business page and social media. A large proportion of consumers now use the internet to search for local businesses and things to do in the local area, so you need to be active online so potential customers can find you. You can create excitement on your social media that will entice people to come and visit, for example sharing great photos of your delicious cakes and suggesting coming to you for a break or catch up with a friend. It is also a great way to communicate with your existing customers, get their feedback and opinions, get them to share their own photos and experiences at your farm shop and keep them up to date by sharing with them upcoming events or exciting new products. By making the customer feel like they are involved and providing them with an experience they are more likely to buy into your brand and become a regular and loyal customer.
For advice on setting up and starting your own farm shop, contact Appetite Me on firstname.lastname@example.org or via phone on 01284 630248. And why not Talk To Us if you’d like to chat about funding your farm shop.