A business management team can improve your farm
A business management team can be an advantage, but just a minority of producers builds one.
“Research shows only 32 per cent of Canada’s farmers are seeking help from business advisors and consultants, yet using these outside professionals mean profitability for farmers,” says Heather Watson, executive director of Farm Management Canada.
She adds that when it comes to seeking professional business advice, farmers usually turn to their accountants and lawyers, followed by their bankers and lenders.
But other professionals exist to provide help, like investment advisors, business coaches, personal coaches, mediators and psychologists, Watson says.
When farmers do consult their advisors, it tends to happen as needed, such as meeting accountants once a year during tax season, she says. Watson encourages farmers dedicate separate meetings to explore long-term planning and options for growth, expansion and transition planning.
Denise Filipchuck, consultant associate with Backswath Management, adds accountants are in an ideal position to identify areas of concern that can be discussed with farmers, and can identify professionals like financial planners and farm management consultants, who specialize in intensive debt management or strategic business planning.
But consultants and financial planners too are often utilized reactively, Filipchuck says.
“Accountability and implementing an action plan often poses a great challenge to farm managers. A consultant or financial planner can be a great asset in ensuring things get done,” Filipchuck says.
Watson urges farmers consider the opportunities that could surface from building a multi-disciplinary team of advisors working together.
“Using professional farm business advisors can not only bring much-needed insight to the discussion and planning process, but help keep the progress on track,” Watson says.
Filipchuck sees many benefits in having a management team, especially with larger projects such as transition planning or large expansions.
By ensuring the best solutions and outcomes are arrived at, this collaboration “can yield significant dividends financially, as well as overall satisfaction, stress management and harmony for the farm manager, the farm team and the farm family as a whole,” says Filipchuck.
Crops producer Terry Aberhart has developed a management team that includes a financial advisor and a four-person advisory board of different experts.
Aberhart's team provides different sides to decisions concerning purchases and long-term planning, he says. When it comes to succession planning, disagreements can become emotional and personal, but impartial managers can help solve disputes with an even-handed approach.
“It’s helped us move forward on a much more rapid pace than we would have on our own, and with a much greater level of confidence,” Aberhart says.
Less than half of Canadian farmers use farm advisors and consultants on a regular basis, despite the opportunity for increased profitability. Experts say a collaborative management team of advisors can help manage risk and assist with strategic business planning.
Article by: Richard Kamchen