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If you diversify your farm into a broader rural enterprise you're likely to grasp a range of benefits which you don't often find in a traditional farm.

Top advantages of farm diversification

Some of the main benefits of diversifying your farm business include:

• Increased revenue - by taking on new activities you and your family are likely to enjoy an increased farm income and a better quality of life.
• Adaptability - branching out encourages you to be willing to change and look out for other opportunities. Adding a new activity will teach you what works for you and your farm. It will help you make further changes and respond to new opportunities.
• Security - by moving into new activities farms can provide you and your family members with a long-term future and greater stability. By branching out, you will increase the number of revenue sources for your farm. This will make you less reliant on any one income source.
• Tradition - diversifying can provide you and your family with a means of carrying on your farming tradition. While the focus of diversifying may be on increasing income and securing a future it can provide the means of subsidising and continuing the traditional activities that are valued and enjoyed.
• Develop new skills - running a new venture will provide the opportunity to increase your skills and expand your network of business contacts. From management to marketing and finance to customer service diversifying will develop your business flair.

Realistic budgeting

It's important to be realistic when budgeting. A common mistake is overestimating income and underestimating the costs of running a diversified business. To avoid this, be conservative in your estimates of potential earnings.