Farm-based recreation or agritourism is increasingly seen as a diversification strategy to promote a more diverse and sustainable rural economy and to protect farming incomes against market fluctuation. Thus, farmers are increasingly being recognised as entrepreneurial, needing to develop new skills and capabilities to remain competitive. However, few studies have addressed the role of entrepreneurship within the context of the diversified farm tourism business. This paper examines the range of skills and competencies that farmers in the north-west of England identify as important for successful diversification and explores the extent to which these competencies are evident. The findings indicate that although farmers are increasingly turning to agritourism as a means to generate additional income, they lack many of the fundamental business competencies required for success. This has implications for rural development policies and signals the need to address these skill deficiencies through farm advisory processes and via more effective training of and support for agritourism providers. © 2011 Taylor & Francis.