I THINK the businesses in country towns can sometimes be forgotten to a certain extent.
There are those that are completely reliant on agriculture, such as the machinery dealers and the rural merchandise businesses.
During good times or bad, the bulk of the attention is on agribusinesses. Businesses that rely on agriculture rarely get a run in the mainstream media. Most agribusinesses are aware of the value these businesses bring.
There are other businesses, such as real estate agents, that usually have multiple sources of income, including agriculture. There are also lots of other businesses in country towns, such as supermarkets. The reality is, most businesses in regional areas are very dependent on a vibrant rural economy.
These businesses are the ones that employ a lot of locals, generally provide the first job for lots of young people, and are the first ones to be asked to sponsor the local clubs and organisations.
Not unlike agribusinesses, there has been consolidation within the businesses that service agriculture. Economies of scale have played a big part in this consolidation. Another factor is franchisers requiring a larger footprint for single businesses.
Other differences between agricultural and associated business are in the area of taxation. Income averaging and farm management deposits are not available to the businesses that service the ag sector.
There are businesses that can be multidisciplinary by their nature, and real estate agents are an example of this. But they may choose to specialise in one niche, and this may well be agriculture. They then become very dependent on a successful agricultural sector.
Having a niche can be risky, particularly when you have the option for multiple revenue streams. But, I have seen plenty of examples where the strategy has succeeded. Having a niche, and getting really good at it, can pay off in large ways.
There is normally a lot of competition in the sector that services agriculture, with lots of businesses providing similar services. This is where the efficiency of the business and the service provided are paramount. In lots of ways, farmers produce commoditised products, and normally, so do the agriservices businesses.
People in regional areas are used to working together. Businesses that service agriculture directly, and those that do indirectly, are all part of the fabric of a functioning rural community, and deserve ongoing support.
- Details: michael@bagshawagriconsulting.com.au