'You can't get by at the bank with just an Excel sheet'

Four families living from one arable farm. A tough task that even the bank had its doubts about. Nevertheless, the four Dogterom brothers from Oude-Tonge (South Holland) succeeded. Together they expanded the family business into a large-scale business with arable crops and tulips. Due to area expansion, major investments and more debt, the financing issues increased. 'You can't get by at the bank with just an Excel sheet anymore.'

The parents of the four brothers – Martijn ('87), Chiel ('89), Job ('91) and Thijs ('94) – settled in Oude-Tonge in the early 80s, because the parental company in Flevoland offered no possibilities for expansion. The arable farm had a stable size of 60 hectares, with ownership and leasehold land. In addition to the traditional crops, tulip bulbs were started. When the sons, after following an agricultural education, joined the company one by one, that branch took on an increasingly larger form.

External advice
Of the brothers, only Chiel worked outside the home for a while. Sister Marilène is not employed in the company and their mother still takes care of the bookkeeping and payroll administration. Due to health reasons, their father had to gradually take more steps back. Last year, this ultimately resulted in the complete takeover of the company by the brothers. It was at that moment that opportunities came their way to expand and optimize the company. Reason enough to seek external advice.

The brothers have a clear division of tasks, but always take the bigger decisions together. Job is – apart from being the talker of the four, as he himself says – also the man who deals with the financial side. "I have known Farmers Funding & Advies for a while. We have spoken before, but I was always able to manage with my own data and knowledge. Investing in a machine or shed is simply easier than when you are talking about buying a complete farm. Moreover, the requirements at the bank change. You can't just show up with an Excel sheet. There has to be a well-founded plan. That is where Farmers Funding & Advies came in."

All in one year
Initially, the brothers had only focused on the takeover. When they were suddenly awarded the contract to purchase a 28-hectare company, they seized the opportunity with both hands. Job: "In addition to the takeover, we were already working on a major land transaction. We could purchase leasehold land, a few individual plots and also exchange land to get a more favorable location. That was already quite a challenge. When we suddenly had to decide to take over an entire company, it was a bit of a shock, but we persevered." This attitude characterizes the brothers' business philosophy and characters. 'We sometimes differ in opinion - and there is also real discussion - but together we always find a solution', they say.

With the help of Peter Pals, business advisor and financing expert at Farmers Funding & Advies, a business plan was written that they took to the bank. They managed to raise the necessary financing, making all plans feasible. "A consequence is that there is now much more external capital in the company, which means you have to do business differently," says Job. "Traditionally, we did not invest in land. We have reversed that strategy. Our philosophy is that – in order to be able to make things more sustainable – a certain scale is required. Certainly when you look to the future. The investments are getting bigger. You can spread them over more hectares."

Job invests a lot of time in maintaining relationships. "The competition from fellow companies here on Goeree-Overflakkee is big. A lot revolves around tendering, although of course you always have to pay a good price. By going that extra mile and being careful with the land, also with rental land, you notice that this works."

Make money
Not only did the size of their financing request increase, the lender also calculates differently. "In the past, collateral was the main focus, while the bank now looks closely at returns (cash flow)", Job knows. "That can be quite difficult. We have developed strongly in a relatively short time. The financial figures do not always do the company justice. A well-founded business plan and the support of an experienced business advisor help to give the bank confidence."

The close cooperation and can-do mentality are paying off for the brothers. The total size of the company is now considerably larger than the 60 hectares that senior started with. Dogterom senior started with 2 hectares of tulips. There are now 100. The arable farming branch – with consumption potatoes, onions, celeriac and grains – is planned around that. Focusing on early crops is interesting in terms of time and often yields a good financial return.

Advisor indispensable
Job and his brothers keep a close eye on the costs, but if it yields money, they dare to invest. "We don't consult Peter Pals first for every question. After all, we already have four opinions at the table and that is sometimes challenging enough," laughs Job. "But when it comes to complex (financial) issues, it is clear to us that external advice is indispensable. We saw that, for example, with the application for an RVO subsidy for the company takeover. Farmers Funding has the resources and knowledge in-house to draw up a successful plan, which is indispensable in this day and age."

FARMERS FUNDING & ADVIES helps your agricultural enterprise function and perform better. Today and tomorrow.

How do we achieve this? With high-quality, specialized advice. In the field of business issues such as company takeovers or realizing a collaboration, tax & legal advice, the fast & good realization of the best financing and land matters. For more information, see www.farmersfunding.nl.