Business ownership opportunities
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2 min read
One of the great things about the dairy sector are the career opportunities for employees and business owners. For those who work hard, gain skills and show a passion for what they do, there are plenty of opportunities to progress a career through a variety of different career pathways.
The most common self-employed business opportunities are contract milking, share-farming and equity partnerships. These provide you with the opportunity to share in the risk and rewards of owning a business without having to wait years to buy a farm of your own. These business opportunities are often offered by farm owners as they look for succession plans for their businesses without selling up.
Overview of different business ownership opportunities
The nature and scale of many dairy farming businesses is changing and the requirement for good leadership and different business ownership models is being amplified by these changes. Static cow numbers and increasing farm scale, along with the continued prevalence of the owner-operator model, mean that opportunities are plentiful for talented leaders to grow and run farm businesses.
Contract milker |
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| Benefits to farm owner | Benefits to contract milker |
| Maintains income but can extract self from day-to-day management. | Enables growth of farm business and equity. |
| Committed farm management capability (labour). | Opportunity to work for self. |
| Can contract out of managing staff. | Capture tax breaks available to business owners. |
| Reduced risk by removing milk price volatility compared with VOSM. | |
Sharemilker |
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| Benefits to farm owner | Benefits to sharemilker |
| Maintains income but can extract self from management. | Enables growth of farm business and equity. |
| Committed farm management capability (labour) contract out of managing staff. | Opportunity to work for self. |
| Release capital for other investments. | Capture tax breaks available to business owners. |
Equity partner |
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| Benefits to managing partner | Benefits to equity partner |
| Enables growth of farm business and equity. | Opportunity to invest in known sector in more passive manner. |
| Opportunity to 'own' the farm. | Growth in equity. |
| Enables purchase of larger farm and access to economies of scale. | Partner with and grow talented people. |
| Can possibly buy out partners. | |
Leasing |
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| Benefits to land owner | Benefits to leaseholder |
| Removes owner from all responsibility involved in operating any part of the farming business. | Allows for much greater control of business operations. |
| Guaranteed and predictable income. | Potentially more rapid equity growth. |
First steps if you’re looking for a business opportunity in the dairy sector
The pathway to farm ownership is no longer linear, and for some people farm ownership is not the ultimate goal. There are a range of progression options available and these are changing constantly as farmers modify operating structures to reach their goals.
To help you consider different operating structures based on the questions below, use this decision tree:
- What amount of equity do I have to invest?
- Am I willing to stay in a 5-year+ investment?
- Am I willing to share my business with others?
- What level of financial risk am I willing to take on?
- How dependent is my income on milk price fluctuations?
Whatever decisions you make before signing an agreement or contract, ensure you have sought independent legal advice, and understand the potential impact on your financial position and what obligations you’ll need to meet.