People Inside Farming: Jolene Brown on Family Business

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While it is tempting to turn your farm operation into a family business, bringing in family members without a solid plan can spell disaster. Jolene Brown, a family business consultant, says understanding how to run both family and business can set you up for success.

“In agriculture, we are above the level of production,” says Brown. “We’re so good at the weeds and the people who are going to do all of your production. So today you and I are going to focus on the people inside farming.

Instead of waiting for things to break down, Brown encourages farmers to get their businesses back up and running as soon as possible. Getting things done when the times are right allows you to have the tools to deal with things when the times are tough, says Brown.

When it comes to breaking up a family business, Brown points to four major mistakes.

  • Assuming all genetic relationships equals good working relationships

  • Believe that the company can financially support all family members who want to work together

  • Assume that others should change, but not themselves

  • Assume that a conversation is a contract

Assuming all genetic relationships equals good working relationships

Brown says acceptance into a family should be unconditional, but acceptance into a business should be conditional and is not a birthright. No member should assume that he is entitled to a share of the land or wealth unless he has earned it.

A family business is also not a place to rehabilitate a family member. If the family member can’t have a job elsewhere, says Brown, why should he get a paycheck from you?

“You and I tolerate things from family members that you would never tolerate from another employee,” says Brown. “Here’s why: We have mothers and fathers who bring in the kids instead of leaders and managers who hire great people. As a business, we need to have leaders and managers who hire the right people, and leaders need to be the right leaders.

Brown emphasizes that she is not discouraging farmers from bringing their children or in-laws into the business, or handing over the business to them, but that she is critically thinking about who is best to take the lead. relieves. It’s more important to think about the traits, upbringing, experiences and personality needed to make the farm a success than just handing over the management to the oldest son.

Believe that the company can financially support all family members who want to work together

When family members start to apply to join the family business, farmers need to consider whether it is really possible to pay them all. Brown says that when considering hiring a new employee, check your company’s financial ratios to see if you are financially capable of paying them.

“Don’t get someone in a financial mess and expect them to fix it,” Brown said. “When you hire people, make sure their salaries and compensation are cash flow, not equity. Nobody says ‘I’m going to sell just an acre here so I can pay you this year.’ Or, ‘Oh, we’re going to cut our herd down so we can pay you.’ They make sure that when they bring people in, it fits into the cash flow of the business. ”

Assume that others should change, but not themselves

Once you make the choice to be the leader of an operation, says Brown, you are no longer independent. The # 1 job of a leader is to replace himself, and replacing himself requires compromise.

“If you told me you wanted the business to continue, that was an intentional choice,” says Brown. “You are not independent. It is not your way. It is in multiple ways.

Assume that a conversation is a contract

Just because something has been verbally promised to you doesn’t mean it legally guarantees it. If it’s not written down, it doesn’t exist, says Brown. When working in a business, not just a family business, it is imperative that you write everything down with signatures. From general financials to job descriptions, keeping things in writing clarifies everything.

Brown suggests that good businesses, no matter how close the family behind them, should not rely on hope and good faith promises as a business strategy, as this is a significant risk that can be avoid.

“How many years of blood, sweat and tears will you put in business?” Brown said. “Hoping that things will work out.” Hoping things go the way we want, hoping the business can keep going, but hope is not a good business strategy.

Tools for success

Brown has 10 tools to help farmers build a family business foundation now and as they begin the transition. She suggests that the farmers prepare the following 10 documents and meet with their businesses to discuss, modify and sign them to confirm and accept them.

1. Mission statement

Who are you, what is your activity and what do you represent? When a consumer comes to buy from you, what to expect?

2. Business plan

What is your business structure, who reports to whom, what parts of the business depend on what, what are the goals this year? What are the finances and succession plan for your business?

3. Questions for those who wish to join the company

A list of education, experience and personality questions and standards that family members who wish to join the business must meet.

4. Manage people

Who is responsible for what in the company? What is the division of responsibilities and how do they change as leadership evolves?

5. Code of conduct

A list of rules and expectations that all members of the company are expected to follow, signed off upon hire.

6. A “contract” to communicate clear expectations

A document that describes intra-company communication expectations and communication best practices.

7. Conflict resolution

What are the best ways to defuse a situation? How do you solve a problem calmly and efficiently?

8. Assessment interview

How can employees improve? Where have employees been successful? How can you communicate this to them in an appropriate way?

9. Prerequisites for owning a family business

What qualities does a family member need to have in order to participate in the family business?

10. Purchase-sale contract

A legal document describing the rules for valuing assets and transferring ownership. It makes a will void.

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