Passion projects and a deeply ingrained love of a certain type of farming are leaving many business owners blinkered and income significantly down on where it could be.

Unfortunately for the rural sector, the telling signs that it’s time to axe a certain facet of your business can quickly become blurred, especially for those who have spent decades in the agricultural industry or whose family farming heritage stretches back generations.

For our agricultural clients, accountants at Douglas Home and Co are continuously trying to decipher the gremlins blighting profits. More often than not, it is the aspect of everyday work that farmers are most passionate about.

Passion versus profits? It’s a common thread we are seeing displayed across our range of agricultural clients and we work closely with those businesses to ensure they can spot and rectify missed opportunities while certifying they are earning what they’re worth.

For farmers and rural business’ that have been in operation for decades, it can be all too easy to miss the subtle signs that business operations need to be adapted and updated. If a farmer has been in a daily working routine carrying out the same tasks for more than 30 years, it’s hard to see the wood from the trees when it comes to spotting why income has stagnated.

For those who have grown a great affinity for their animals, or certain daily tasks that they’ve done for years, it can be hard to think of them as a financial shortcoming. But some of these passions chipping away at farmers’ profit margins and earning them tiny returns per hour might have been mooing at them the whole time.

Livestock is one of the true passion projects that farmers have that are consistently popping up as a blight on businesses across our range of various rural clients. One of the main reasons for this downfall is the sheer amount of time farmers spend looking after them, time which could be spent doing something more profitable.

For the time spent on these business ventures, we always analyse whether the profits gained are actually worth it or have farmers simply got an attachment to their animals and are accepting mere hourly rates as a consequence

While farmers are facing a decade of change, rural businesses are also having to consistently re-invest and upgrade equipment and facilities to sustain various passion projects and fall in line with constantly updated regulation.

The industry is being squeezed from every angle and there are fewer subsides available without the need for further input, so does it really make sense for rural firms to spend money revamping their operation for a passion that may chew up profit.

When we break down the numbers and analyse farmers income streams, it often quickly stands out to us that farmers are in some cases being paid just £1 or £2 per hour for the time they physically spend on some of their key passion projects. Would they accept this rate if they were offered a new job? We doubt it.

By getting down the core of a rural business’ profit makers, farmers are able to quickly reduce or remove time spent on lengthy and financially unstable passions and re-prioritise that time towards money making aspects of the business.

Without appearing to have a complete vendetta against livestock, which are by all means not always unprofitable and are definitely being farmed very effectively and profitably by many in the farming sector, they are however the easiest enterprise to pick on, given their vast capital and time commitments.

There are a number of other aspects of rural life that need ditched by farmers to streamline businesses process, save time and ultimately money. For example, we’ve had farmers whose trade revolved heavily around game birds, eggs and fattening cattle.

It was evident that the game birds weren’t pulling their financial weight. By doing a full profit interrogation, we were quickly able to identify this but in order to be able to do this, we encouraged clients to keep timesheets, although this appears to most as a waste of their time, the results are more often than not completely illuminating.

As a result, we suggested ditching game birds and using that time and effort by increasing egg production and sales – the rural firm quickly noticed major improvement when it came to time efficiency and profit.

We would never expect farmers to give up their passion entirely but by breaking down the numbers, they can continue to incorporate them into the business in a more financially stable way which will help to secure the farms future and, crucially, are at least aware that their labour of love was actually for love and not profits!

Brexit, the war in Ukraine, labour shortages, soaring material prices and the cost-of-living crisis mean that there is a decade of major change facing the rural industry, making it even more crucial to be cut throat with passions and maximise profits.

In our business, we’re urging farming and rural clients to have a deep dive across the board to identify what can be improved to weather the rural storm. We’re certain that, in some cases, adjusting their passions can make way for untouched profit that could make a real difference in the currently worrying economic and rural landscape.