Minimise Risk With Equity Partnerships In New Zealand Farming
Rural land and farm ownership has traditionally been a family business passed down for years through inheritance or acquired after a long career of working and management. Owning and operating a farm as an individual has become increasingly difficult in this country as farmland continues to increase in value because of the huge potential returns. The low number of opportunities can be extremely frustrating when there is so much money to be made from New Zealand's booming agricultural sector.
Instead of slowly working your way into farm ownership through career or taking a huge risk with the expense of an individual purchase, consider an equity investment in dairy farming in New Zealand. Helping to alleviate some of the burden that this high capital purchase can place on a buyer while maximising the potential RoI, equity partnerships are an almost ideal solution.
How an Equity Investment Partnership Works
An equity partnership describes a farm business that is owned by two or more capital contributing parties. Structured as a private company, shares are issued to each member of an equity partnership based on the individual investment. It is then the responsibility of the newly formed company's directors to dictate how the farm will be managed and operated.
Benefits of an Equity Partnership
Individual farm ownership can be incredibly expensive and, while many would love to reap the rewards of a profitable farming business, not many have the capital to take on such a challenge by themselves. Even after initial investment you have the burden of wages, maintenance and a number of other additional costs required to keep the business moving forward.
Equity partnerships bring multiple owners on to minimise risk and increase available capital. The company divided fairly amongst owners through a binding legal arrangement that ensures there are no disagreements over ownership down the road. Stipulations are usually put in to ensure than any shareholder can exit the business when they please, so there's no risk of being stuck in the investment longer than you want to be.
Risks of an Equity Partnership
While you might have a strong vision for the future of your business, it might not be shared by other members of your newly created company. Disagreements in direction and poor communication are common reasons that equity investments break down.
Minimising the chance of conflict is critical to protecting your investment, so you need to sit down with other partners before a purchase to discuss a business plan and future goals. If it doesn't sit right, don't go in. Make sure you're getting a financial report every quarter so you can keep up to date and in the know about your investment and its progress.
Dairy farming alone is worth over $11 billion a year in New Zealand and the potential is so great that you'd be wise to consider going in on a purchase. If you're interested in farm ownership but you don't want to take on all the risk yourself, look to an equity partnership for your investment.
Instead of slowly working your way into farm ownership through career or taking a huge risk with the expense of an individual purchase, consider an equity investment in dairy farming in New Zealand. Helping to alleviate some of the burden that this high capital purchase can place on a buyer while maximising the potential RoI, equity partnerships are an almost ideal solution.
How an Equity Investment Partnership Works
An equity partnership describes a farm business that is owned by two or more capital contributing parties. Structured as a private company, shares are issued to each member of an equity partnership based on the individual investment. It is then the responsibility of the newly formed company's directors to dictate how the farm will be managed and operated.
Benefits of an Equity Partnership
Individual farm ownership can be incredibly expensive and, while many would love to reap the rewards of a profitable farming business, not many have the capital to take on such a challenge by themselves. Even after initial investment you have the burden of wages, maintenance and a number of other additional costs required to keep the business moving forward.
Equity partnerships bring multiple owners on to minimise risk and increase available capital. The company divided fairly amongst owners through a binding legal arrangement that ensures there are no disagreements over ownership down the road. Stipulations are usually put in to ensure than any shareholder can exit the business when they please, so there's no risk of being stuck in the investment longer than you want to be.
Risks of an Equity Partnership
While you might have a strong vision for the future of your business, it might not be shared by other members of your newly created company. Disagreements in direction and poor communication are common reasons that equity investments break down.
Minimising the chance of conflict is critical to protecting your investment, so you need to sit down with other partners before a purchase to discuss a business plan and future goals. If it doesn't sit right, don't go in. Make sure you're getting a financial report every quarter so you can keep up to date and in the know about your investment and its progress.
Dairy farming alone is worth over $11 billion a year in New Zealand and the potential is so great that you'd be wise to consider going in on a purchase. If you're interested in farm ownership but you don't want to take on all the risk yourself, look to an equity partnership for your investment.