SRDP BUSINESS PLAN

For:

CS Fleming & Son

The Strone, by Memus

“Peel Farm Holiday Cottage Development”

TAY 114244 4706210

Strictly Private & Confidential

Prepared by: SAC Consulting Contact: Euan McKay Hart, Senior Consultant,

77 North Street, Forfar, Angus, DD8 3BL euan.hart@sac.co.uk Telephone: 01307 464033 Fax: 01307 465264 Date: 21/02/2012

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Strictly Private & Confidential

Information not to be shared with a third party

This report has been prepared exclusively for the use of the above on the basis of information supplied; the report has been prepared strictly for the purposes of this business in support of its SRDP RDC proposal application. The information contained within is strictly private and confidential; under no circumstances should any information be shared with a third party without the prior consent of the business. No responsibility can be accepted for actions taken by any third party arising from their interpretation of the information contained within this document. No other party may rely on the report and if he does, then he relies upon it at his own risk. No responsibility is accepted for any interpretation, which may be made of the contents of the report.

Contents: Background Farm Business overview

Section A Accounts

Section B Summary Statement of Financial Health of Business SWOT Analysis Recommendations

Section C Details of Proposed Diversification Project Project Description Management & Employment

Statutory Requirements, Quality Assurance, Industry Recognition Training

Section D Market Factors & Marketing Plan Evidence of demand Main Competitors Product Differentiation Product Description Tourism Strategies Price & Promotion Point of Sale

Section E Environmental Impact Positive Impacts Negative Impacts

Section F Costs & Financial Projections Project Costs Finance Cash Flow Projection Assumptions Return on Capital Profit & Loss Expected Benefits

Appendix Section D1 Angus Ahead Tourism plans

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FARM BUSINESS OVERVIEW

CS Fleming & Son is a long established family farming partnership based at Strone Farm, Memus by Forfar; there are 5 partners and one employee; all land lies within the Less favoured Area. The business is mixed arable and livestock (200 suckler cows, 420 ewes), has four owned locations (Peel Farm, Strone Farm, Boghaugh & Clintlaw) plus several areas rented on a seasonal basis.

In addition to the traditional farming business the partners run Peel Farm which has a coffee shop (established 1984), The Courtyard gift shop, a farm shop and a play area. Partner Claire Fleming is in charge of the existing diversified business which is separately accounted.

The partners wish to convert the remaining vernacular buildings which form part of Peel Farm steading (currently in a decaying state of repair & used in part for livestock housing) into two high quality self catering units. They wish to target the country pursuits market within the area and will design the units accordingly to include a ‘boot room’ etc for wet/dirty clothing, a wood fuel heating system (through RHI funding) and intend to capture rain water for washing machine and toilets.

Claire Fleming has researched the local and the wider Tayside self catering market, she has identified a niche for family/sporting friendly accommodation in converted steadings at or above 4 star as being lacking – currently they only existing ones are in coastal areas. Plans have been drawn up and an architect engaged to create one unit to sleep 4 people and the other to sleep 8 people from the existing steading block; this will widen the market and provide clients with a choice of accommodation on one site.

The development will interact with and compliment the existing activities at Peel Farm which already brings in a significant number of visitors to Angus. The proposal fits with national tourism and local tourism strategies and will provide a high quality facility which will bring more people to the Angus Glens, extend the tourism season in Angus and increase the amount of income to the rural economy.

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SECTION A - Accounts

FARM ACCOUNT ANALYSIS Using the 2 most recent Trading Accounts

Year ending 31 March Year: 2009 Year: 2010 Output Cattle 114272 107545 Sheep 21139 33019 Cereals 4949 Subsidies 13766 18310 Single Farm Payment 82051 85214 Valuation Change -13190 -7030 Other: Land let; contracting & sundry income 39292 46272 Total Output 262279 283330

Less Variable Costs Feeds (incl Rented Grass) 29122 34763 Seed 1722 2525 Fertilisers & lime 13930 14869 Sprays 2324 4548 Contract Work 0 0 Casual Labour 0 0 Vet & Medicine 14229 10718 Other Livestock Expenses 599 7453 Other Crop Expenses 2111 2596 Misc. Total Variable Costs 64037 77472 Less Fixed Costs Regular Labour (inc. Casual) 16374 16281 Fuel & Electricity 38454 34089 Machinery Repairs 20060 31182 Machinery & Other Depreciation 20068 21175 Other Depreciation Insurances 9352 9189 Property Repairs 4208 2590 Motor Vehicle Depreciation 1863 3955 Rent & Rates 4956 3946 Bank / Building Interest 417 412 Other Interest Legal & Professional Fees 4743 4695 Admin Expenses 981 1410 Miscellaneous Expenses 799 1455 Loss / (Gain) on Sale of Assets -6896 -2304 Total Fixed Costs 115379 128075 Net Profit / (Loss) 82863 77783

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Year: 2009 Year: 2010

Assets

Cash 43426 66582

Debtors 1214 12395

Livestock 108630 117925

Euro account 73345 138559

Machinery 180599 190578

Motors 7450 15820

Improvements 100791 106745

Stocks

Heritable Property

Total Assets 515455 648604

Liabilities

Bank / Building Society Overdraft

Creditors 15583 16218

HP Creditors 29739 27100

Other creditors

Deferred tax

Net Worth 470133 605286

Total Liabilities 45322 43318

Capital Account

Net Worth at Start 429443 470133

Capital Introduced 89445

Revaluation Adjustments

Net Profit / (Loss) 82863 77783

Sub total 512306 637361

Less Net Drawings 42173 32075

Net Worth at Close 470133 605286

Indicators

Percentage Owned 91.21 93.32

Fixed Charges (%): 2.05 1.54

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Gross Output Analysis

Standard %

Year: 2009

%

Year: 2010

%

GROSS OUTPUT 100% 262279 100 283330 100

VARIABLE COSTS 30 - 35 64037 24 77472 27

GROSS MARGIN 65 - 70 198242 76 205858 73

LABOUR 16 - 18 16374 6 16281 6

POWER 16 - 18 71686 27 84142 30

OVERHEADS 4 - 5 21946 8 23294 8

GROSS PROFIT (LOSS) 30 88236 34 82141 29

FIXED CHARGES 15 5373 2 4358 2

NET PROFIT (LOSS) 15 82863 32 77783 27

SECTION B

SUMMARY STATEMENT OF FINANCIAL HEALTH OF BUSINESS

This is a new diversification proposal with no existing activity through the farm accounts, the farm accounts reflect this and do not therefore contain any detail of the proposal, and a full cash flow projection for the diversified proposal is contained within the last section of this plan. Analysis therefore pertains to the existing farm business only. Percentage Owned: The values for the period of the analysis are 91% and 93%. SAC data notes that an owner occupier should be no less than 70% and a tenant no less than 50%, in this case heritable property is held outwith the partnership. However the high percentage shows that the level of liabilities carried by the business is very low in relation to the net worth. Net Worth: This value is (for the given asset & liability values) the amount that would be left were all assets liquidated and all liabilities settled – it is the amount the business owns. The net worth value has increased from £470133 in 2009 to £605286 in 2010 which is against a relatively static liability value which averages at £44320 for the period. Trend is upwards which shows business growth Net Profit & Overdraft Trend: An annual net profit is being made, which exceeds drawings and allows for reinvestment. Importantly the level of net profit is above or very close to the single farm payment allocated

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to the business. This is of particular note as this is a livestock focussed business, profitability only occurs in livestock businesses which are technically well managed. The business operates an overdraft for working capital, at the end of each period however there is cash in hand. This is an established business whose plan has been for a long time to not rely on the overdraft facility all year as a source of funding. This is a business decision and allows the business some degree of a buffer should there be a poor year.

Gross Output Analysis: This method of analysis enables businesses to be compared on a like for like basis, developed by SAC farm accounts the system has become the industry standard. CS Fleming & Son have a low variable cost value leading to an above target gross margin figure of 73% in 2010. Labour & Power are now normally combined to give a maximum value of 36% of output; both values for the business are at or below this. This shows the level of employed labour, the costs associated with hiring in contractors for arable and other field work. Overhead values exceed the 5% maximum SAC value (4 to 5%), on an individual basis they do not appear to be high however this may be due to the level of insurances and repairs due the number of farm steadings and dwellings belonging to the business. Gross profit is above target, fixed costs (rent, rates & interest) at 2% are well below the 15% maximum target value – this leads to a net profit which in each year (32 & 27%) exceeds the minimum value expected of 15%

Summary The analysis of the last two available sets of accounts shows that CS Fleming & Son is technically and financially well managed, the business is in control of finances and the partners are prudent in there use of borrowed money. This business is showing continued growth with net profits above the level of drawings thus allowing for reinvestment and growth.

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CRITICAL STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS ANALYSIS OF BUSINESS AND APPLICANT

Strengths of Business

• Family business

• Financially & technically well managed livestock business

• Expanded land area over past 30 years to maintain critical mass

• Owner occupier with low level of short term liabilities, no long term liabilities

• Peel Farm is within the LFA area & within a scenic upland area on the edge of Glenisla but within easy travelling distance of Dundee, Perth, Kirriemuir, Forfar etc

• Peel farm steading has potential for developing a holiday letting enterprise

• Established Peel Farm diversified coffee shop, Courtyard & farm shop

• Established web site for Peel Farm

• Planning permission granted for conversion at Peel Farm

• In the right location for out door pursuits

• Cateran Trail passes near by

• Within travelling distance of skiing & hill walking areas, on edge of the Cairngorm National Park

Weaknesses of Business

• Ability to generate income from traditional farming systems is limited

• Peel farm steading of little use to modern farming systems

• Reliant on single farm payment for profitability

• Dilapidated state of remaining steading at Peel Farm detracting from other diversified business

Opportunities for Business

• Develop high quality self catering holiday letting business

• Create a significant diversified income stream to the farm

• Make use of available resources

• Access green tourism market

• Collaborate with other rural tourism providers (e.g. Forfar Golf Driving Range) will add product / service to holiday lets

• Build two unique holiday units from steading, fitted to a high standard which will target a variety of market segments

• Meet a market need not currently met within the Perthshire Angus border

• Utilise marketing skills & customer base provided by the Holiday Cottages Group

• Add value to Peel farm and vice versa

Threats to Business

• Loss of income when SFP system changes

• Inability to significantly increase returns from main farming activities

• Further dilapidation of Peel Farm steading (eventually beyond economic state of repair)

• Not maximising use of available resources to create income for the business

• Not introducing a new enterprise to ensure business growth

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RECOMMENDATIONS FOR RESTRUCTURING/REORIENTATION TO CREATE SUSTAINABLE VIABLE BUSINESS FROM FARMING

The business partners have identified a number of weaknesses within the current system. There is heavy reliance single farm payment scheme income which will alter in time following CAP reform and there is no potential to significantly expand the farm business on a permanent basis without causing undue financial stress. Whilst the business is profitable and has no significant financial liabilities there is a need to develop the farm business to improve long term viability and to increase farm income if only to support the younger partners that have come into the business over the past few years. Having studied several options the partners have decided that converting the remaining traditional steading at Peel Farm (Lintrathen) into two high quality self catering units is the best fit option for the business. Given the farm’s location on the Perthshire Angus border, the proximity to leisure activities (skiing, hill walking, shooting & fishing etc) and the ability to collaborate with other rural tourism providers plus the existing Peel Farm enterprise will widen the marketing opportunities helping to make this will be a viable new business venture. It is recommended to construct two units from the steading to form one two bedroom (sleeping 4) and one four bedroom (sleeping 8). Both fitted to a high standard with renewable energy hearting coming from a new wood fuel system (outwith the grant) which will assist in gaining green tourism status. The proposal will create two unique high quality self catering units within an environmentally well managed farm setting which has an existing tourism facility on the door step, there are no other equivalent self catering lets within the immediate area (converted steadings) and market research would suggest that this carefully planned development will have a high occupancy rate from the start.

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DETAILS OF HOW INVESTMENTS WILL BE FUNDED

Detail how you intend to finance your proposals. Funding through bank term loan for long term borrowings. Short term borrowings will be via overdraft (to cover until grant received).

SECTION C

DETAILS OF PROPOSED DIVERSIFICATION PROJECT C1 Indicate if your business proposal relates to the expansion of an existing

diversified business or a new business development.

Expansion of existing business New business development √√√√ C2 If an existing business, (a) State the name of the diversified business:

______________________________________________________________________

(b) State the address where the diversified business is located: ______________________________________________________________________

______________________________________________________________________ Postcode: ____________________________ (c) How many years has the diversified business been trading? ___________ Years (d) Enter the Trading Year and tick the relevant box to indicate the Net Profit of the

diversified business from the two most recent Trading Years, as detailed in the accounts.

Trading year Less £500- £1001- £5001- Greater than £500 £1000 £5000 £10,000 than £10,000 ______________ ______________

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C3 Indicate which eligible measure your business proposal refers to: Alternative Agricultural Production Residential Letting Leisure, Recreation and Sporting facilities Rural Services

Retailing or Processed Agricultural Produce Tourist Accommodation √√√√ Processing of Forest Products Tourist Facilities

PROJECT DESCRIPTION C4 Description of the business proposal, plus the impact that the project will

have on the farm business. Peel Farm is an upland mixed farm located within Angus at Lintrathen (near Kirriemuir) which is on the Angus Perthshire county boundary near to Glenisla, the farm has a mix of arable and grassland and is a working farm. Peel Farm is the location of an existing diversified business which started in 1985 with opening of a coffee shop and now expanded to include a farm shop and the Court Yard gift shop. Located on a quiet back road the farm lies near to the popular Cateran Trail and is on the edge of the Cairngorm National Park, near to main skiing and hill walking areas and importantly is within travelling distance of Scotland’s main cities. A new school was built near to Peel Farm and is now the focal point for the community. The proposal has three integrated elements – all located on Peel Farm. Firstly the conversion of the existing steading (circa 1840) into two high quality self catering units (a 2 bedroom & a 4 bedroom) both finished to a high standard, secondly the tidying up of the area adjacent to the traditional steading to form gardens and parking, and thirdly the installing of a renewable heating system using wood fuel) – each unit will have its own wood burning stove as well; also the level of insulation designed into the conversion will be increased to u=0.15 (industry standard is u=0.19). Each of the units is capable of accommodating individuals, families and multiples thereof with a guide limit of 12 bed spaces in total (4 bed spaces & 8 bed spaces respectively). The key to success in what is an increasingly competitive market will be the delivery of a high quality product and a commitment to the highest standards of service as well as an innovative approach to marketing and flexibility in terms of booking periods and pricing. Linkages with other tourism operators – from food providers to attractions and activities have already been actively sought out (see letters of support) in order that the customer gets as full an experience of the area as possible. The vision is to offer accommodation that is of a high quality (Visit Scotland 4 to 5 star & Green Tourism Silver award) and high capacity (12 bed spaces), family friendly and environmentally sustainable. This will enable guests to sample farm life and enjoy the wildlife within the immediate area whilst having access to the wider Angus and Perthshire outdoor activities. This proposal will be unique within the self catering sector in the immediate and surrounding area in terms of the quality, style of the accommodation (converted steading) and the use of renewable energy for central heating. It is planned to provide clients with walks around the farm, information on the plants and wild life within the area as well as guides to local attractions; provide bicycles and suggested routes in the area; form links with other local tourism providers (e.g. Forfar Golf Driving Range & Coffee Shop; Glenmarkie Riding Stable; Mains of Cragisla – fishing etc) to further enhance client’s visits.

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Letting will be on the basis of 3, 4 or 7 nights to maximise the potential market share and occupancy rates. This proposal will significantly increase the value, number and duration of visits to the Angus Perthshire area including on e of the few ‘green’ tourism destinations in the immediate area. The investment will lead to an increase in the availability of high quality self catering accommodation within the Angus glens which will have a strong link to the surrounding farmland and sustainable farming systems. This level of accommodation will satisfy a known demand for high quality ‘green’ self catering accommodation within Tayside (see Holiday Cottages Group letter). The investment compliments and enhances the overall farm business by creating a significant sustainable income source and will directly enhance the viability of the business. Supports the Scottish National Tourism Strategy, the Perthshire Tourism Strategy and the Angus Tourism Strategy ‘Angus Ahead’ (see below), provides a high quality base for niche tourism (sporting, walking activities) extending the tourism season and retention of spend in rural Angus/Perthshire. Significantly improves the quality and number of bed spaces within the area, adding value and enhancing viability of the whole business within a fragile economic location. Relevant tourism Strategies:

1. The draft Angus Tourism Strategy 2008 - 2012 was approved by the council's Infrastructure Services Committee (20 January 2009).

It focuses on five main themes:

• Strategic development and visitor services - included in this are the further development of angusahead.com and an Angus wide accommodation audit

• Activity tourism - an important element of the Angus tourism portfolio with opportunities to further capitalise on existing walking, golf and other activity based products

• Cultural tourism - encompassed in this is ancestral tourism as well distinct cultural opportunities, such as the county's Pictish heritage

• International reach - exemplified by the Angus in China Initiative but also addressing the potential tourism benefits from those visiting other countries.

• Events - identified as a vital element of Angus' attraction for visitors as well as promoting civic pride in citizens.

2. Perthshire Tourism Strategy and Action Plan has been drawn up for the period 2006 to

2011; this has four main themes – Knowing Your Market, Marketing & Promotion, Exceeding Visitor Expectations and Being sustainable. This is delivered by the Perth and Kinross Council Economic Development unit.

The Action Plan has been developed in response to four broad aims:

1. To create a vibrant year round end destination, responsive to changing customer expectations

2. To build sustainable & competitive tourism businesses, committed to quality service delivery

3. To influence the development of infrastructure to enable the region to meet visitor needs and compete effectively

4. To implement focussed, cost effective strategies for integrated product development and marketing

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MANAGEMENT AND EMPLOYMENT C5 Name of manager for diversification business: Miss Claire Fleming. Largely Claire Fleming will be responsible for the enterprise; Miss Hannah Fleming will be active in the management of the diversified business.

C6 Give details of relevant past experience and/or qualifications, which will be useful for the management of the proposed business venture.

Claire Fleming has significant experience of managing the existing coffee shop, farm shop and the Court Yard at Peel Farm. Claire has attended the course known as Women in Agriculture (Lantra) which provided business training and guidance on marketing etc. The partners will make use of a letting agent – Holiday Cottages Group. This will ensure the management of advertising, bookings and invoicing for holiday lets are managed through an agent for at least the first two years allowing the partners to focus on the management of the property before deciding to take the entire process in hand.

C7 If this application refers to an extension of an existing diversified business, state the number of people currently employed in the diversified business (including partners and directors). Refer to definitions on page 2 of this Application Form.

Full Time Part Time Casual Seasonal

C8 Give details of projected NEW employment created in the diversified business over

the next 5 years (including partners and directors).

Year Full Time Part Time Casual Seasonal 1 0.25 0.5 2 0.25 0.5 3 0.25 0.5

4 0.25 0.5 5 0.25 0.5

The business will use a professional cleaning company and Miss Claire Fleming will manage the proposal.

C9 Describe how the business would be covered in the event of illness or

sudden departure of KEY staff. Partners will be involved in the management of the diversified business, the use of an outside cleaning company and letting agent further mitigate the risk to the business of the sudden departure or illness of one or both of the key ‘staff’. Miss Hannah Fleming will take control in the event of Claire Fleming being ill.

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STATUTORY REQUIREMENTS

C10 Do any regulations or industry standards apply to your project? Yes √√√√ No If YES, give details and describe what plans you have to meet or exceed these. The business will install hard wired smoke and fire detectors per building regulations. Main Industry standards –

1. VisitScotland classification 3 to 5 star; accommodation is scored according to a strict set of criteria on an annual basis; this ensures clients are informed of the standards for the accommodation. This is the industry standard, the business works closely with the assessors to improve its quality rating on an on going basis, it is essential that the business achieves at least 4 star but aims for the 5 star rating.

2. Green Tourism – in order to become accredited the business has for example to utilise

cleaning products, toilet tissue etc from an approved list; it has to recycle waste and use renewable energy.

Assurance schemes are voluntary but in a competitive industry any recognised assurance scheme will assist in marketing the ‘product’. The second item above is an additional assurance scheme through VisitScotland which ties in with the current farming and environmental management on the farm, this adds a unique selling point to the business and is an important ‘hook’ for potential clients.

C11 Have you notified the Planning Authority of your proposals?

Yes √√√√ No

C12 If YES, what stage has the enquiry reached? Planning permission has been granted building renovation.

C13 Is Planning Permission required? Yes √√√√ No

C14 If YES, have you obtained Planning Permission? Yes √√√√ No

C15 Is a Building Warrant required? Yes √√√√ No

C16 If YES, have you obtained a building warrant? Yes √√√√ No

C17 Is Listed Building consent required? Yes No √√√√ C18 If YES, have you applied for consent? Yes No C19 If YES, have you obtained consent? Yes No

C20 Are any other statutory consents applicable to your project? Yes √√√√ No If YES, give details. SEPA septic tank registration.

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C21 If YES, have you applied for consent(s)? Yes No √√√√ C22 If YES, have you obtained the consent(s)? Yes No

QUALITY ASSURANCE / INDUSTRY RECOGNITION C23 Please specify what quality assurance standards or industry recognition your

project will achieve.

• Disabled access provided within the design

• Property will be of a standard commensurate with VisitScotland certification standards; target is to achieve a minimum 4 star progressing to 5 star

• Green Tourism standard is over and above the VisitScotland standards and has three levels, target to achieve Silver award from the start. Requires adherence to a strict set of rules, is a means of differentiating the business from competitors. VisitScotland have a separate marketing policy for this scheme both in the UK and internationally

EQUAL OPPORTUNITIES C24 Your business proposals must take account of equal opportunities. Describe how

your proposals will address this. Disabled access provided within the design. The business is an equal opportunities employer making no decisions based on race, religion or handicap.

C25 Is the diversification project for:

Agriculture Non-Agriculture √√√√ C26 Is the location of your existing or proposed project:

On-farm √√√√ Off-farm C27 In which parish will your existing or proposed diversified business be located? Parish Number (if known): 116 Name: Lintrathen C28 State the address where your diversified business will be located: Peel Farm, Lintrathen, Kirriemuir, Angus Postcode: DD8 5JJ

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TRAINING REQUIREMENTS C29 Will training be needed in connection with the project? Yes No √√√√ Training suggested by Business Gateway & Holiday Cottages Group as being relevant & of value to the proposal and essential to its success.

C30 If YES, identify staff to undertake training, the training required, and if known, the

cost of such training.

Name Position in business Training RECOMMENDED

Cost (£) Excluding VAT

Claire Fleming

Partner

Training – Winning Through Innovation. Scottish Enterprise

Free

Claire Fleming

Partner

5 Star Self-catering workshop Carline Millar Consulting

199.00

SECTION D MARKET FACTORS

Before embarking on a new business development, market research should be undertaken to determine the level of demand for the proposed product or service and also to identify the competition.

D1 What evidence of demand do you have for your product or service? Visit Scotland and the Scottish tourism industry have a target of growing tourism revenue by 50% by 2015; they have a number of strategies for achieving this and undertake annual studies as a means of benchmarking progress. A Visit Scotland survey in 2010 estimated that UK residents took 0.51 million tourist trips to Angus & Dundee stayed 3.13 million bed nights and spent £87 million in the area. 61% of trips were taken by Scottish residents with 36% being English visitors. Overseas visitors took 0.07 million trips to Angus & Dundee and stayed 0.73 million bed nights spending £43 million in the area. Angus & Dundee - 57% of trips were taken by Scottish residents whilst 38% were taken by English visitors. 28% of overseas visitors came from Germany and the USA, they accounted for 28% of the overseas spend. See appendix for full details. Specifically in relation to this proposal is the significance of field sports, outdoor activities (skiing etc), walking (Angus Walking Festival) and cycling holidays. Walking accounts for a half of all tourism related revenue (2010 total revenue estimated to be over £1 billion per annum) and accounted for 3.5 million trips in 2005 alone. Cycling (all types) accounts for approximately 8% of all tourist trips in Scotland (source Visit Scotland).

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Visit Scotland (will visit on 29th February) support the proposal at Peel Farm verbally noting the need for investment and growth in the supply of quality facilities, stating that central to the industries growth ambitions is the priority to drive up standards of quality across the industry. The Perth and Kinross strategy states the need for additional self catering provision but makes specific reference to the development of quality products in line with customer expectations and consumer trends, specifically in increasing the quality standard (average VisitScotland Quality Assurance award). A key objective is also to increase participation in the Green Tourism Business Scheme as a demonstration of sound environmental management. There is also reference to the need for tourism operators to develop “link plans” – demonstrating how they are working with other tourism businesses. For example, for the self catering operator this might be collaborations with attractions or activities operators or information on local farm shops or other sources of local produce. This proposal will fit the above and demonstrates a fit with the Perth & Kinross Tourism strategy. David Valentine (Head of Economic Development, Angus Council) also supports the proposal noting the proposal fits with the Council’s wish to address the seasonal peaks in accommodation demand (Angus Council Accommodation Audit 2009) and to extend the tourism season in Angus. He also makes comment that the proposal will enhance the overall impression of Angus as a diverse and imaginative tourist destination. Janet Thomson Regional Manager for Holiday Cottages Group confirms demand for 4 or 5 star quality holiday homes within Angus of this type. In discussion with Claire Fleming she noted that clients now wish to stay in holiday homes that are sympathetic to the environment and that detached attractive properties with fine views and child friendly facilities are sought after. Mrs Thomson points out that within the area properties can be let on average for 25 weeks per year in the Angus area. Claire Fleming has researched the local market and has identified a lack of high quality rural accommodation that is based on a converted traditional steading with ‘green’ credentials.

D2 Who are your main competitors? A general internet search for similar sized 4 or 5 star self catering properties yielded none that utilise renewable energy. Local competition comes from:

Bankhead of Alyth Farm house, Alyth Craighall Castle, Blairgowrie Dalnaglar Castle, Glenshee Wester Derry, Kilry

West Freuchies, Glenisla Wester Brewlands, Glenisla

All of the above have their own specific selling points; the majority are of a very high decorative standard and would not be keen on field sport clients wish wet dogs/dirty clothing etc or particularly family friendly (off putting to families with children). Some are castles, the majority are normal houses with little character and are not in the same market as the proposal at Peel Farm. A search of the market leading web site for green tourism destinations (Visit Scotland) in Tayside shows there to be no similar accommodation available within Tayside to that proposed at Peel farm. Those located cater for a different market:

Drumcroy, Aberfeldy – adults & children over 12 years; sleeps 1 to 4 Hilton of Duncreavie, Glenfarg – couples only no children Duncrub Holidays, Dunning – sleeps 1 to 4

Clova Hotel log cabins – sleep 2 or 4

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D3 Geographically, where do your main competitors operate in relation to your business? The main competitors (although not operating within the same target market) noted in D2 that offer the same scale and quality but are not part of the green tourism sector are all within a 15 to 20 mile radius, there are no competitors operating within the green tourism sector currently offering the same type of ‘product’ as the proposal at Peel Farm.

D4 How is your product or service different from your competitors (quality, type of service, market etc.)?

Success depends on the marketing approach, product differentiation and a flexible approach to pricing and availability, i.e. short breaks, off season pricing etc. The proposal at Peel Farm will target a market segment that is not currently being met within Tayside for quality user friendly family accommodation that meets with recognised quality assurance standards for both the quality of the accommodation and environmental impact – green status. The Peel Farm steading conversions will offer a unique package, high quality family accommodation with a clean renewable energy system within a restored farm steading which has an existing tourist attraction on site (including a coffee shop & farm shop). The main points of difference are:

• Family focused accommodation, dog & child friendly; satellite TV etc

• 12 bed spaces within two modern high quality steading conversions

• High level of service from owners

• Existing tourist attraction on site (including a coffee shop & farm shop)

• Environmentally managed farm land surrounding the steading

• Access to Angus & Perthshire glens

• Available to all age groups

• Bicycles for sole use of guests

• Gun cupboard (to Tayside police standards)

• Links with other tourism providers

• Ability to maximise customer experience

MARKETING PLAN

The marketing plan should be prepared in advance of trading, covering issues such as where, how and to whom you will be marketing your product or service.

D5 Product: Describe your product/service stating what is special or innovative

and what benefits you are offering to your customers. This is a relatively unique self catering holiday let proposal within Tayside; the proposal will create high quality above family accommodation within a converted steading heated by a sustainable renewable source of energy system. The proposal will target the increasing family market for those who wish to holiday within Scotland but require specific accommodation with green credentials and a high standard of finish (better than at home). Unlike the identified competitors this proposal offers a dog, child, out door pursuits and field sports family friendly purpose designed facility within a unique building and benefiting from the high quality finish throughout.

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Peel Farm has an existing Coffee Shop (since 1985), the Courtyard gift shop, a farm shop, a farm play area and a walk to a nearby view point. All will be available to the holiday clients CS Fleming & Son will follow on from its existing diversified business and will be customer focussed high quality self catering units with renewable energy system located within an area of natural scenic beauty. The proposal will have a wide appeal and aim for a high percentage of repeat business. The proposal has three integrated elements – all located on Peel Farm. Firstly the conversion of the existing steading (circa 1840) into two high quality self catering units (a 2 bedroom & a 4 bedroom) both finished to a high standard, secondly the tidying up of the area adjacent to the traditional steading to form gardens and parking, and thirdly the installing of a renewable heating system using wood fuel) – each unit will have its own wood burning stove as well; also the level of insulation designed into the conversion will be increased to u=0.15 (industry standard is u=0.19). Each of the units is capable of accommodating individuals, families and multiples thereof with a guide limit of 12 bed spaces in total (4 bed spaces & 8 bed spaces respectively). The key to success in what is an increasingly competitive market will be the delivery of a high quality product and a commitment to the highest standards of service as well as an innovative approach to marketing and flexibility in terms of booking periods and pricing. Linkages with other tourism operators – from food providers to attractions and activities are also actively encouraged in order that the customer gets as full an experience of the area as possible. The vision is to offer accommodation that is of a high quality (Visit Scotland 4 to 5 star & Green Tourism Silver award) and high capacity (4 and 8 bed spaces), family friendly and environmentally sustainable. This proposal will enable guests to sample farm life and enjoy the wildlife within the immediate area whilst having access to the wider Angus and Perthshire range of outdoor activities. This proposal will be unique within the self catering sector in the immediate and Tayside area in terms of the quality and type of the accommodation. It is planned to provide clients with walks around the farm, information on the plants and wild life within the area as well as guides to local attractions; provide bicycles and suggested routes in the area; form links with other local tourism providers (e.g. Glenmarkie Riding Stable; Mid Derry – game shooting; Mains of Cragisla – fishing; Forfar Golf Driving range etc) to further enhance client’s visits and maximise their holiday experience. Letting will be on the basis of 3, 4 or 7 nights to maximise the potential market share and occupancy rates. This proposal will significantly increase the value, number and duration of visits to the Angus Perthshire area including one of the few ‘green’ tourism destinations in the immediate area. The investment will lead to an increase in the availability of high quality self catering accommodation within the Angus glens which will have a strong link to the surrounding farmland and sustainable energy production. This level of accommodation will satisfy a known demand for high quality ‘green’ self catering accommodation within Tayside. The investment compliments and enhances the overall farm business by creating a significant sustainable income source and will directly enhance the viability of the business. Supports the Scottish Government’s national tourism strategy, Perthshire Tourism Strategy and the Angus tourism strategy ‘Angus Ahead’; provides a high quality base for niche tourism (sporting, walking activities) extending the tourism season and retention of spend in rural Angus/Perthshire. Significantly improves the quality and number of bed spaces within the area, adding value and enhancing viability of the whole business within a fragile economic location.

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D6 How does your product or service link with national and regional tourism strategies? Tourism is a vital source of income to rural businesses within Tayside. This is recognised at national, regional and local council levels with the Scottish Government setting targets for tourism and ambitions for growth (50% revenue growth by 2015); Scottish Government vision for tourism is “To make Scotland one of the world’s foremost visitor destinations by 2015” through the national Framework for Tourism Change. Within Perthshire a Tourism Strategy and Action Plan was been drawn up for the period 2006 to 2011, this has four main themes – Knowing Your Market, Marketing & Promotion, Exceeding Visitor Expectations and Being sustainable. This is delivered by the Perth and Kinross Council Economic Development unit. The Action Plan has been developed in response to four broad aims:

• To create a vibrant year round end destination, responsive to changing customer expectations

• To build sustainable & competitive tourism businesses, committed to quality service delivery

• To influence the development of infrastructure to enable the region to meet visitor needs and compete effectively

• To implement focussed, cost effective strategies for integrated product development and marketing

The focus for the local strategy (in line with the national Tourism Framework for Change) is on capacity utilisation and the delivery of quality experiences and products for the target markets (Theme 3 – Exceeding Visitors’ Expectations and related actions). This project aims to provide a unique VisitScotland 4 or 5 star with Green Award for environmental systems fitted to a very high standard which is entirely in line with the strategic aims as set out by the council strategy. The Green Tourism standards that will be adhered to by the business (target Silver Award status) along with the use of a renewable energy source fulfil the emphasis on sustainability. Through utilising the available water supply for a micro-hydro scheme the business is clearly fulfilling the sustainability objective (see Theme 4 – Being Sustainable); the proprietors have already shown their commitment to sound environmental management practices through their countryside premium scheme. The farm land surrounding the house is managed by the Fleming’s to maximise the benefits to wildlife. Themes 1 and 2 - Knowing Your Market, Marketing & Promotion. There is growth in the supply of self catering accommodation and in particular family holidays within Scotland (source VisitScotland). This business has identified that the key to success within an increasingly competitive environment is the delivery of a high quality product, a commitment to the highest standards of service, differentiation of product as well as an innovative approach to marketing and flexibility in terms of booking periods and pricing. Specific (but relevant to Angus) Perthshire market research (UK Passenger Survey) notes that 64% of trips were taken by Scottish residents, visitors to Perthshire come from the central belt (Glasgow, Edinburgh, Lothians, Clyde Valley; Aberdeen and Grampian) the business will make use of the powerful marketing systems in place through the Holiday Cottages Group. Meeting the Theme Knowing Your Market. Sections D7 to D11 detail the marketing etc of the business; it will use Holiday Cottages Group for web marketing and as booking agent. Holiday Cottages Group has a number of brands and each is focussed on a specific market, they have a very effective web site, the business can only achieve the desired occupancy rates by paying for marketing etc from the start. Meeting the Theme Marketing & Promotion. Linkages with other tourism operators – from food providers to attractions and activities are also actively encouraged in order that the customer gets as full an experience of the area as possible. The business will actively “link plans” with other tourism providers as noted previously.

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The draft Angus Tourism Strategy 2008 - 2012 was approved by the council's Infrastructure Services Committee (20 January 2009). It focuses on five main themes:

• Strategic development and visitor services - included in this are the further development of angusahead.com and an Angus wide accommodation audit

• Activity tourism - an important element of the Angus tourism portfolio with opportunities to further capitalise on existing walking, golf and other activity based products

• Cultural tourism - encompassed in this is ancestral tourism as well distinct cultural opportunities, such as the county's Pictish heritage

• International reach - exemplified by the Angus in China Initiative but also addressing the potential tourism benefits from those visiting other countries.

• Events - identified as a vital element of Angus' attraction for visitors as well as promoting civic pride in citizens.

The Peel Farm proposal will fulfil the first aim by increasing the availability of this type of accommodation within upland Angus thus improving visitor services within the area, it will enhance the potential for activity based tourism by offering high quality accommodation within reach of the main skiing and hill walking areas of Tayside. The links with other tourism providers will create a new supply of clients wanting to take part in rural activities (niche markets) widening the market and improving the number and duration of visitor staying in the area. Cultural tourism is increasing in demand; the area surrounding Peel Farm has a significant number of historic sites (e.g. Durwards Dyke, Airlie & Cortachy Castles; Folda Castle etc); in addition the area was subject to mass emigration and even after the Year of Homecoming there will be those with roots in the area wanting to return for a holiday. The proposal therefore fulfils the national and regional tourism strategies.

D7 Price & Promotion: Promotion, advertising and intended promotional activity with budget costs.

The pricing is in the owner’s control, comparison is carried out via internet searches and other research; advice is taken from Holiday Cottages Group regarding pricing and offers. The average range is as follows:

2 bed unit 4+ star £250 to £525 per week (7nights) 4 bed unit 4+ star £525 to £875 per week (7nights)

Rates are reviewed on an annual basis; rates also vary within months, average tariff (7 or more nights) for each month detailed below and Tariffs for 3 or 4 night breaks will also reflect the season. Combined averages used in calculations:

2013 2014 2015 2016 2017

MONTH £'s PER WEEK

J 650 650 675 675 675

F 650 650 675 675 675

M 775 775 800 800 800

A 875 875 900 900 900

M 950 950 975 975 975

J 1150 1150 1175 1175 1175

J 1300 1300 1325 1325 1325

A 1400 1400 1425 1425 1425

S 900 900 925 925 925

O 950 950 975 975 975

N 575 575 600 600 600

D 1150 1150 1175 1175 1175

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Pricing is structured to be competitive for a new start business and to provide flexibility in booking periods and pricing to maximise occupancy and maximise potential returns to the business. At present special offers for the Peel Farm proposal have not been used but could be utilised as a means of stimulating demand.

D8 Place: Where and/or how will the product/service be made available to the customer? Where is the point of sale?

The business will advertise through Holiday Cottages Group and VisitScotland. The business will produce compliment slips and promotional literature which it will distribute, give to clients and leave in the house. Advertising material will be placed within a range of retail and hospitality outlets within the surrounding area and with those the business is collaborating with through the SRDP system. Holiday Cottages Group web sites (Cottages 4 You; Country Cottages etc) will be the main marketing tool for the business giving it access to direct hits on the Holiday Cottages site or through internet searches for 4+ star family self catering in Tayside. The business will also aim to become listed on the VisitScotland and Green Tourism web sites; and seek to become a member of the VisitScotland’s Green Tourism Business Scheme (GTBS). Adverts and advertorials may also be placed in the Scotsman, Liverpool Echo, Dundee Courier, Inverness Echo, Blackpool Gazette and Newcastle Evening Chronicle. All of these would be designed to raise awareness, provide information of the facilities available from the new business. Internet literacy has significantly increased the ease with which people can shop on line and it is no different for the holiday let business. Many new clients will simply searched in Google for ‘luxury family cottages Perthshire’ or Angus and booked from there, it has therefore become an essential marketing tool one which this business is making full use of. The easiest and most cost effective way is to ‘buy’ these services from an established holiday let company. Claire Fleming can then focus her attention on producing high quality client focussed product. At some point, once a regular client base is established they may look to take in hand bookings and marketing. The point of sale will be the Holiday Cottages web site directly or via a link at VisitScotland etc. The new holiday let business will establish a new web site with links to the others noted a collaborating. In addition it has been discussed that a web site be established to act as a shop window for rural tourism providers - an ‘Angus – Places to Stay & Things to Do’ web site which will have links to all those collaborating plus some others who are not SRDP beneficiaries. Claire Fleming feels this would create a virtual gateway to rural tourism within Angus, improve marketing and occupancy rates. Peel farm has an existing well used and constantly updated web site http://peelfarm.com/ which has a links page and will be used to market the holiday units; Claire Fleming has experience of ecommerce and is more than capable of making the holiday let web site work.

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SECTION E ENVIRONMENTAL IMPACT

E1 Have you consulted any of the following environmental/conservation bodies

regarding your proposals?

Scottish National Heritage Yes No √√√√

Royal Society for the Protection of Birds Yes No √√√√

Scottish Environment Protection Agency Yes √√√√ No

Historic Scotland Yes N o √√√√

Independent Specialists Yes √√√√ No If YES, provide details of consultation: Dr Susan Swift, Consultant Zoologist regarding bat & other species SEPA regarding septic tank. Steading building is not listed.

E2 Describe any positive environmental impacts of your project, for example, providing access to the countryside; improving the area for wildlife; maintaining traditional features of the landscape or reducing the use of energy/chemicals.

The proposal will:

• renovate a redundant and dilapidated traditional farm steading building (circa 1840) which will maintain a traditional building as a feature within the landscape

• reduce the electricity used by the proposal plus reduce the carbon footprint through additional insulation & use of a wood fuel heating system

• enable greater access to the countryside and in particular the farm land at Peel which has a higher level of biodiversity features than on many farms

E3 Describe any negative environmental impacts that your project is likely to have on either the natural heritage interest or landscape of your area.

All negative impacts of the new ‘houses’ have been dealt with in the design and by the planning authority. A major negative impact is the increase in use of non renewable energy (electricity), the increase in domestic waste and the increase in use of cleaning products within the house. There will be a significant increase in the carbon foot print at Peel Farm in direct proportion to the occupancy of the new build house. The negative impact in terms of carbon has been mitigated within the proposal to heat the units with a wood fuel system using wood from a totally renewable source. The Green Tourism standards dictate what domestic cleaning products can be used within the let accommodation and the level of recycling, all products are safer for the environment and the standards ensure recycling is carried out in accordance with the standards.

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E4 Outline the steps you intend to take to minimise the effects or compensate for them. For example, what measures will be implemented to reduce waste and pollution or reinstate wildlife habitat and landscape features like mature trees?

The business will comply with VisitScotland’s Green Tourism standards which set down a strict set of standards; these include a recycling plan and use of cleaning products that are less harmful to the environment. The renewable energy within the business assists to reduce or mitigate the energy used from national sources. Design of the conversion includes a rain water harvesting system. This innovative system will collect rain water, filter it and store it for use with toilets and washing machine – designed to reduce use of water from the public supply.

E6 Is the Agricultural Business currently in an agri-environment Scheme No √√√√ If YES, describe how the project complements/integrates with the scheme. The clients will be made aware of the environmental management on the farm and informed of the habitats and their management, clients will be encouraged to walk around the farm and engage with the natural environment.

E7 Is your project located within any of the following designated areas?

National Park Yes No √√√√

Site of Specific Scientific Interest Yes No √√√√

Nitrate Vulnerable Zone Yes No √√√√ Special Protection Area Yes No Special Area of Conservation Yes No

National Scenic Area Yes No √√√√

Other designation (give details) Yes √√√√ No

Entire holding lies within the designated Scottish Less Favoured Area.

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SECTION F COSTS The costs you provide will help determine the level of award should your application be unsuccessful. It is therefore important that these costs are accurate and substantiated with estimates for quantified costs for material, labour and machinery. Detailed plans and two bona-fide quotes for all capital works/purchases must be provided in relation to all costs for which financial assistance is being sought.

F1 Will you recover VAT on any of the costs listed above? Yes √√√√ F2 Detail below total project costs. A ELIGIBLE COSTS (a) Buildings

Renovation of existing buildings £325 454.00 Sub Total (i) £325 454

(b) Eligible Equipment and Machinery £

Sub Total (ii) £ (c) Communications – IT/Telecommunications (detail)

Included within the building costs etc £ Sub Total (iii) £ nil

(d) Services – power/water, vehicular access, etc (detail)

Drive way, paths etc £ Sub Total (iv) £

(e) Training

£199.00 Sub Total (v) £ 199.00

(f) Livestock/Nursery Stock (establishment only) Livestock (detail): £ Sub Total (vi) £ nil

(g) Eligible Professional Fees (surveyor, architect, planning only) Details Planning, building warrant, professional fees £ 6 380.00 £ Sub Total (vii) £ 6 380.00

(h) Marketing and Promotional Costs Details £ Sub Total (viii) £ nil

TOTAL ELIGIBLE COSTS £ 332 013.00 Add Sub Totals (I) to (viii)

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PROPOSED FINANCE F3 (a) Detail how you propose to finance the business proposal. Personal Funds £ Retained Profit £ 3 456.75 Commercial Bank/Building Society Overdraft £ Commercial Bank/Building Society Loan £162 500.00 Hire Purchase/Other Credit Arrangement £ Private Sector Investment £ Grant applied for in this Application £ 166 056.25 TOTAL £ 332 013.00

£325 653.00 = 325454 building + 199 training

£332 013.00 = 325 653 + £6 360.00 (fees + planning) Total cost on which grant sought is £332 013.00 (b) Have you discussed your business proposal with your Bank/Building Society/Other

Finance Provider?

Yes ���� No Letter from lender within Associated material – letters of support

Project Total 332 013.00 SRDP Funding 166 056.25 Sub Total 165 9566.75 Term Loan (Clydesdale Bank) 162 500.00 Own Funds 3 456.75 Total Non SRDP funding 165 956.75

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FINANCIAL PROJECTIONS

F 4 CASH FLOW PROJECTIONS – assume that all work is completed 2012, capital spend completed all & grant aid received in 2012; opening bank level is the cost of furnishing the units.

Projected cash flow Years 1 to 3

CASH FLOW PROJECTIONPEEL FARM

Projected Cash Flow Years 1 to 5 Qtr1 Qtr2 Qtr3 Qtr4 Year 1 Qtr1 Qtr2 Qtr3 Qtr4 Year2 Qtr1 Qtr2 Qtr3 Qtr4 Year 3 Qtr1 Qtr2 Qtr3 Qtr4 Year 4 Qtr1 Qtr2 Qtr3 Qtr4 Year 5

Months per Qtr J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

INCOME TOTAL TOTAL TOTAL TOTAL TOTAL

Trading Income (excluding VAT) £2,978 £7,657 £12,880 £4,894 £28,409 £3,113 £7,860 £13,168 £5,039 £29,180 £3,774 £9,261 £14,405 £7,100 £34,540 £3,774 £9,261 £14,405 £7,100 £34,540 £3,774 £9,261 £14,405 £7,100 £34,540

VAT on Outputs £596 £1,531 £2,576 £979 £5,682 £623 £1,572 £2,634 £1,008 £5,836 £755 £1,852 £2,881 £1,420 £6,908 £755 £1,852 £2,881 £1,420 £6,908 £755 £1,852 £2,881 £1,420 £6,908

Personal Capital

Loan Capital / Own Funds

Renewable energy income £365 £365 £365 £1,095 £383 £383 £383 £383 £1,532 £402 £402 £402 £402 £1,608 £402 £402 £402 £402 £1,608 £402 £402 £402 £402 £1,608

Grant Receipts

VAT Refunds £1,389 £1,504 £1,594 £4,487 £1,467 £1,505 £1,458 £1,633 £6,063 £1,604 £1,557 £1,430 £1,706 £6,297 £1,790 £1,567 £1,430 £1,716 £6,504 £1,790 £1,567 £1,430 £1,716 £6,504

TOTAL INCOME (a) £3,574 £10,942 £17,325 £7,832 £39,673 £5,586 £11,320 £17,643 £8,062 £42,611 £6,534 £13,073 £19,118 £10,628 £49,353 £6,721 £13,083 £19,118 £10,638 £49,560 £6,721 £13,083 £19,118 £10,638 £49,560

EXPENDITURE

Capital Expenditure (VAT free)

Capital Expenditure (net of VAT)

Holiday Cottages Group Commission 23% £685 £1,761 £2,962 £1,126 £6,534 £716 £1,808 £3,029 £1,159 £6,711 £868 £2,130 £3,313 £1,633 £7,944 £868 £2,130 £3,313 £1,633 £7,944 £868 £2,130 £3,313 £1,633 £7,944

Rent/Rates/Water £492 £492 £492 £492 £1,968 £492 £492 £492 £492 £1,968 £492 £492 £492 £492 £1,968 £492 £492 £492 £492 £1,968 £492 £492 £492 £492 £1,968

Insurance £750 £450 £1,200 £450 £450 £900 £500 £500 £1,000 £500 £500 £1,000 £500 £500 £1,000

Heat/Light/Power £900 £900 £900 £900 £3,600 £900 £900 £900 £900 £3,600 £900 £900 £900 £900 £3,600 £900 £900 £900 £900 £3,600 £900 £900 £900 £900 £3,600

Repairs/Renewals £500 £500 £350 £350 £700 £750 £750 £750 £750 £750 £750

Advertising/Marketing £250 £250 £250 £250 £1,000 £250 £250 £250 £250 £1,000 £250 £250 £250 £250 £1,000 £250 £250 £250 £250 £1,000 £250 £250 £250 £250 £1,000

Cleaning Costs £450 £450 £450 £450 £1,800 £450 £450 £450 £450 £1,800 £460 £460 £460 £460 £1,840 £460 £460 £460 £460 £1,840 £460 £460 £460 £460 £1,840

Telephone/Postage/Stationery £50 £50 £50 £50 £200 £50 £50 £50 £50 £200 £50 £50 £100 £50 £50 £50 £50 £200 £50 £50 £50 £50 £200

Advertising/Marketing £250 £250 £500 £250 £125 £125 £500 £250 £250 £500 £250 £250 £500 £250 £250 £500

Loan Interest £950 £950 £950 £950 £3,800 £950 £950 £950 £950 £3,800 £950 £950 £950 £950 £3,800 £950 £950 £950 £950 £3,800 £950 £950 £950 £950 £3,800

Capital Repayment £1,582 £1,582 £1,582 £1,582 £6,328 £1,582 £1,582 £1,582 £1,582 £6,328 £1,582 £1,582 £1,582 £1,582 £6,328 £1,582 £1,582 £1,582 £1,582 £6,328 £1,582 £1,582 £1,582 £1,582 £6,328

Visit Scotland etc fees £500 £500 £250 £250 £250 £250 £250 £250 £250 £250

Professional Fees (accountant & legal) £500 £500 £850 £1,050 £1,900 £950 £1,050 £2,000 £950 £1,050 £2,000 £950 £1,050 £2,000

Sundry Expenses £335 £335 £335 £335 £1,340 £335 £335 £335 £335 £1,340 £335 £335 £335 £335 £1,340 £335 £335 £335 £335 £1,340 £335 £335 £335 £335 £1,340

VAT Payments £1,389 £1,504 £1,594 £1,467 £5,954 £1,505 £1,458 £1,633 £1,604 £6,199 £1,557 £1,430 £1,706 £1,790 £6,484 £1,567 £1,430 £1,716 £1,790 £6,504 £1,567 £1,430 £1,716 £1,790 £6,504

Personal Drawings

TOTAL Expenditure (b) £8,333 £9,024 £9,566 £8,802 £35,724 £9,030 £8,750 £9,795 £9,622 £37,197 £9,344 £8,579 £10,239 £10,742 £38,904 £9,404 £8,579 £10,299 £10,742 £39,024 £9,404 £8,579 £10,299 £10,742 £39,024

CASH FLOW FOR PERIOD (a-b) -£4,759 £1,918 £7,759 -£969 £3,949 -£3,444 £2,570 £7,848 -£1,559 £5,414 -£2,810 £4,494 £8,879 -£114 £10,449 -£2,683 £4,504 £8,819 -£104 £10,536 -£2,683 £4,504 £8,819 -£104 £10,536

OPENING BANK BALANCE +/- -20000.00 -25,009.13 -23,403.69 -£15,937 -£20,000 -£16,906 -£20,351 -£17,781 -£9,933 -£16,906 -£11,492 -£14,302 -£9,809 -£929 -£11,492 -£1,043 -£3,727 £777 £9,596 -£1,043 £9,492 £6,809 £11,313 £20,132 £9,492

Bank Interest at 5% -250.00 -312.61 -292.55

CLOSING BANK BALANCE +/- -25,009.13 -23,403.69 -15,936.89 -£16,906 -£16,906 -£20,351 -£17,781 -£9,933 -£11,492 -£11,492 -£14,302 -£9,809 -£929 -£1,043 -£1,043 -£3,727 £777 £9,596 £9,492 £9,492 £6,809 £11,313 £20,132 £20,028 £20,028

OPENING BALANCE = estimatedcost of furnishing two units

2013 2014 2015 2016 2017

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Year 1 Year 2 Year 3 Year 4 Year 5

Calendar Years 2013 2014 2015 2016 2017

INCOME

Trading Income (net of VAT) 28409 29180 34540 34540 34540

Other Income

TOTAL INCOME 28409 29180 34540 34540 34540

EXPENDITURE

Rent/Rates/Water 1968 1968 1968 1968 1968

Insurance 1200 900 1000 1000 1000

Light/Heat/Power 3600 3600 3600 3600 3600

Repairs/Renewals 500 700 750 750 750

Advertising/Marketing 1000 1000 1000 1000 1000

Salaries/wages etc 1800 1800 1840 1840 1840

Telephone/Postage/Stationery 200 200 100 200 200

Advertising/Marketing 500 500 500 500 500

Loan Interest 3800 3800 3800 3800 3800

Visit Scotland etc fees 500 250 250 250 250

Professional Fees (accountant & legal) 500 1900 2000 2000 2000

Sundry Expenses 1340 1340 1340 1340 1340

Holiday Cottages Commission 6534 6711 7944 7944 7944

TRADING EXPENDITURE 23442 24669 26092 26192 26192

NET PROFIT 4967 4511 8448 8348 8348

Average Net Profit £6,924

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FINANCIAL PROJECTIONS F5 List your assumptions in producing the figures for your Cash Flow and Profit & Loss

forecast (eg volume of sales @ £x/unit, level of interest on term of loans etc). Include any information you have to support your assumptions.

• Rental Income Combined average

2013 2014 2015 2016 2017

MONTH £'s PER WEEK

J 650 650 675 675 675

F 650 650 675 675 675

M 775 775 800 800 800

A 875 875 900 900 900

M 950 950 975 975 975

J 1150 1150 1175 1175 1175

J 1300 1300 1325 1325 1325

A 1400 1400 1425 1425 1425

S 900 900 925 925 925

O 950 950 975 975 975

N 575 575 600 600 600

D 1150 1150 1175 1175 1175

Values based on price comparison with competitors and advice from Holiday Cottages Group.

• Occupancy rates

2013 2014 2015 2016 2017

MONTH % Occupancy

J 32 33 40 40 40

F 42 45 50 50 50

M 34 35 42 42 42

A 47 48 57 57 57

M 65 67 80 80 80

J 77 79 87 87 87

J 90 92 99 99 99

A 95 97 99 99 99

S 80 82 95 95 95

O 61 63 70 70 70

N 38 39 45 45 45

D 37 38 70 70 70

Av. % 58 60 67 67 67

Values based on VisitScotland Scottish Accommodation Occupancy Survey 2010. Occupancy rates and thus income generated may appear to be pessimistic however they reflect the current economic downturn within the UK economy. The financial plans in this business plan reflect this an could be viewed as on the lower side of achievable, it was felt that a realistic financial budget be drawn up to show to the lender.

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• Funding & Expenditure Total investment of £332 013.00 SRDP Grant sought £166 056.25 Amount to Fund £165 956.75 Holiday Cottages Group fee of 23% of letting income where the units are on their web site and in the magazine, a rate of 15% would be applied where web advertising only. Cleaning fees based on estimate from company.

• Target weekly lets: Qtr1 Qtr 2 Qtr3 Qtr 4 Total Year 1 4.5 8 10 5.5 28 weeks Year 2 4.5 8 11 5.5 29 weeks Year 3 to 5 5.5 9 12 6.5 33 weeks Higher weekly lets will be achieved through short breaks etc.

F6 Indicate the expected return on capital (ROC) at the end of year 3. Use the following formula or indicate the method used to calculate your figure. (average net profit years 1 – 3) x 100 ROC = 4.26 %

total capital cost Note: 4.26% BASED UPON INVESTMENT FUNDED BY TERM LOAN The existing loan costs £10 128 pa. Produces a net profit each year, cash flow becomes positive in quarter 2 of year 4. Impact of the SRDP grant: Where no grant is available the full £325 454 plus fixtures & furnishings (£20 000) would have to be funded through a loan. On the same basis (20yrs @ 5%) the repayments on this would be £27 636 Impact is to cause annual loss on the Profit & Loss account, cash flow never becomes positive within the 5 year projection noted in a previous section. Grant aid is therefore essential to this proposal.

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EXPECTED BENEFITS F7 Detail the expected benefits you hope to achieve as a result of your business

proposal, including details on physical outputs and impacts. Physical outputs are the immediate effects of the investment. For instance, a project which is re-using a farm building should detail the amount of new space to be created/refurbished. Impacts on the other hand are the ultimate effects of the projects and must detail the expected income and employment targets.

Expected Benefit Measurement Year 1

Measurement Year 2

Measurement Year 3 to5

Self catering units 2 2 2

Bed spaces 12 12 12

% Occupancy rates base + 2% + 9%

Trading Income £’s 28 409 29 180 34 540

Average annual weekly let value £’s 943.75 943.75 968.75

Average annual occupancy rate % 58 60 70

Additional profit 4 967 4 511 8 348

VisitScotland ratings - star 4 4+ 5

VisitScotland ratings - star bronze silver silver

Employment – created part time 0.5 0.5 0.5

Employment – created full time 0.25 0.25 0.25

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APPENDICIES

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Appendix Section D1

Angus Tourism Strategy:

Issued: 21 January 2009

Homecoming Launch Of Angus Tourism Strategy

Angus Council has chosen the start of the National Year of Homecoming to launch a far reaching tourism strategy for the county.

The four year plan aims to capitalise on six key strengths - ancestral, business and leisure tourism; food and drink; golf and China - all identified as having the potential for sustained and profitable development.

The council's Infrastructure Services convener David May said the council's strategy set out an ambitious but achievable plan to improve the county's tourism profile and bring investment.

"Tourism is central to the Angus economy - that's why we are active partners in the Year of Homecoming and support and lead other national initiatives, such as Tartan Day, to attract visitors to Scotland.

"We want Angus to be a key destination for visitors to the country, this year and for

years to come.

"The core purpose of this strategy is to ensure that Angus has in place the services, infrastructure and attractions that will bring new and return visitors to the county, year

on year," said councillor May.

The convener cited the council's success in targeting specific markets, such as golf, as evidence of a more strategic and sustained approach bringing greater dividends.

"Over the past decade we have concentrated our efforts on maximising the return for Angus' in specific sectors. We have developed a portfolio of successful and specialist

tourism products such as Carnoustie Country; the Angus and Dundee Roots Festival; the Angus in China Initiative; and have supported a broad range of event based

activities.

"We now need to focus that energy and expertise and take a more strategic and sustainable approach across all sectors, to ensure we are in the best position to

support and encourage public and private sector development."

The strategy was also welcomed by David Adams, chair of the Angus and Dundee Tourism Partnership.

"Angus Council has a great record for its support of tourism. This strategy builds on the work already done and outlines the way in which the council will work with local tourism businesses to promote the area locally, nationally and internationally. Current

exchange rates are very advantageous for overseas visitors so now is a particularly good time to promote the area's tourism strengths," said Mr Adams.

"The council is a key player in the Scottish tourism industry, leading on key initiatives such as golf; Tartan Day; China and ancestral tourism, all contributing to the prosperity of the area. I would like to commend the council for its partnership working

and its engagement with the local tourism industry, which it is clear from the strategy it means to continue to support."

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The draft Angus Tourism Strategy 2008 - 2012 was approved by the council's Infrastructure Services Committee (20 January 2009).

It focuses on five main themes:

• Strategic development and visitor services - included in this are the further

development of angusahead.com and an Angus wide accommodation audit

• Activity tourism - an important element of the Angus tourism portfolio with opportunities to further capitalise on existing walking, golf and other activity based products

• Cultural tourism - encompassed in this is ancestral tourism as well distinct cultural opportunities, such as the county's Pictish heritage

• International reach - exemplified by the Angus in China Initiative but also addressing the potential tourism benefits from those visiting other countries.

• Events - identified as a vital element of Angus' attraction for visitors as well as

promoting civic pride in citizens.

An extensive programme of consultation will begin shortly to gather the views of partners, businesses and residents. It will finish in June and the feedback gathered will

inform the final strategy which will be submitted to the council for approval in the autumn.

Visit Scotland DAT 2010

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Visit Scotland DATA 2010

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