If you are considering an agritourism business on your farm, you should ideally treat it as a separate strategic business unit (SBU). This will allow you to derive the long-term benefits associated with a separate profit centre as part of a larger business entity.
A portion of the income could be derived from charging an admission fee to an event such as a festival, a tasting, a petting zoo or similar. A portion of these fees could go towards funding a farm crèche, or visitors could make donations if a business entity is registered as a non-governmental organisation or non-profit organisation.
Apart from helping to fund these worthy causes, these donations have good marketing value, boosting the image of your establishment.
It’s a good idea to charge admission fees on a sliding scale, with discounts for students and children younger than 12, for example. Families could be charged a preferential fee, or group discounts could be offered. You could also offer discounts on products for sale, such as a free wine-tasting session with the purchase of a set number of bottles of wine.
Inbound tour operators could charge tourists a fee for exclusive information about, or access to, areas not generally open to the public.
Added-value Income opportunities
The sale of fresh farm produce provides an opportunity to charge retail prices and sell excess processed produce, such as jam, as a unique add-on product. Consumers tend to prefer processed products to fresh produce as they are easier to transport. It is important to verify that you comply with health and labelling regulations for processed foodstuffs.
Merchandise such as branded T-shirts and other souvenirs could provide an additional income stream. Yet another possibility is to charge for special activities such as feeding animals with supplied feed.
With more and more consumers wanting to know where their food comes from, educational tourism is on the increase and this creates opportunities. At the same time, you may wish to consider organising, with other farmers in the area, tours for farmers from other countries.
Wide variety of business opportunities
- Offering training to clients who, for example, are purchasing a horse for the first time, or teaching visitors how to make cheese, if you are a dairy farmer.
- If you grow unusual varieties of produce, think of offering members of the public the opportunity to taste it. Tru-Cape and Oak Valley Estate near Elgin in the Western Cape offer regular tours of heritage apple orchards, as well as tastings.
- Offering accommodation, such as renting out cottages or historic buildings on your farm to wedding parties or weekend guests. It is advisable to determine the costs and potential income to be generated for any event or activity such as a wedding. Using an event co-ordinator or outsourcing event planning is sometimes the best option, as these kinds of functions tend to be capital-intensive and take a great deal of time to organise and run.
- Organising a farmers’ market and inviting other local farmers to participate.
- Charging fees for hosting equine events, cattle auctions or similar events.
- Good dining. There has been a significant increase, particularly in the winelands, in the number of restaurants opening on farms for food and wine pairings. However, a food offering does not need to be elaborate or require a large investment. A delicatessen option that caters for picnics or cheese platters paired with a wine tasting will also attract visitors.
Whatever your decision, choose what you are most familiar with and start small.