Tenders for farms to rent need to show a businesslike approach with robust figures. If it is an open process, there could be multiple tenders and therefore your application should be precise and concise – it needs to set out who you are, what you do, and why you would be an ideal tenant.
Here are some top tips for submitting a tender:
- Attend the viewing day, even if you know the farm. It is important to introduce yourself to whoever is hosting the day or acting for the landlord, and from your side, who may be actually be involved with the farming.
- Do not hesitate in providing detailed financial information, including profit and loss budgets, cashflow forecasts and the business's balance sheet information: this is essential to the application and a landlord will treat it confidentially. The preparation of the budgets and cashflows can also be a good exercise for the business, and other benefits may come out of the process, such as analysis of costs of production, liquidity of the business and profit analysis of different enterprises. The template can always be rolled out again for future tenders.
- Don’t try to compare your tender with those of others that you know may be interested. Never try to match or exceed someone else’s tender level; your offer of rent should be wholly specific to your own business. The amount your business can justify may not be comparable with what another, perhaps smaller, business can tender. Once your bid is submitted, you have to be confident in your proposal, knowing that you can pay the tendered rent for the duration of the term.
- Tenants are trusted with valuable landed assets that the landlords may want back in future. Do not just state what you will do to look after the landlord’s resources, particularly the soils, but show what you are already doing either on your own land or within existing tenancies. You are looking to sell your business on a sheet of paper which many find difficult – do not be shy about your achievements and successes.
- At the interview stage, expect to be questioned on the figures: how you arrived at profit levels, how borrowing will be repaid and loans serviced. If you employ a consultant to prepare the budgets, make sure you fully understand the figures and implications of a change in the headline levels of income and expenditure. Credibility of the numbers is key – and they will be scrutinised by someone with detailed agricultural knowledge to ensure the business plans are viable.
Above all, throughout the whole process, be positive about the industry, show enthusiasm and dedication to the future of the holding, and that you are committed to the long term, for the benefit of you and the landlord.