Farm transition takes a team – here’s how to find the right fit
Bring in advisors to fill in knowledge gaps
We’ve all seen a one-person band - someone playing multiple instruments using every part of their body to make music. It’s compelling to watch, mostly because we want to see if it goes off the rails, and it’s not always the best music. For transition planning and execution, you can attempt to be a one-person band and do everything yourself. But a better analogy might be to have a team of advisors and experts like an orchestra with you as the conductor.
Family members and those involved directly in the transition represent the core team. You can also include people that are supporting you through the process. If you’ve followed each step in the transition pathway, you’ll know that continuous communication and talking through each step is required.
As you move through the process, family meetings should include relevant advisors to ensure decisions are made with the required expertise and experience.
This practice needs to extend beyond the family and ultimately include the advisors or experts you bring in to help with aspects of the transition outside your comfort zone or knowledge. As you move through the process, family meetings should include the relevant advisors to ensure decisions are made with the required expertise and experience.
Ask yourself - would you rather take time and energy to research the legal and tax ramifications of asset transfers? Or develop the skills that enable you to screen and hire the best lawyer and accountant to help your family make the right decisions? Ask people you trust for referrals to find the right advisor for your needs.
It’s important to remember that including advisors on your transition team does not mean tuning out and handing off decisions. Farm advisors fill in the knowledge gaps. They bring wisdom, experience and credentials. They also provide an objective viewpoint because they’re not entrenched in the day-to-day operations and relationships on the farm. But experts are only as good as your direction and guidance. A good conductor has every player in the orchestra working together, giving them direction to play their specific parts.
Need convincing? Here’s what advisors can bring to the table
Advisors add value to a business because you gain access to everything they know in their area of expertise. You may deal with a specific issue once on your transition pathway, but they may be exposed to that issue every day. Most farmers use an accountant and at least know a lawyer they can call in a pinch. But there are more people out there ready to help you chart a path for your business or navigate choppy waters.
Farm transition can be especially tricky. Getting the details right is sometimes overlooked while the big decisions are getting hammered out. Working through the plan can spark some strong emotions, and disagreements can become personal. Bringing in an impartial advisor can help solve disputes or, at the very least, ensure everyone has the best information available to facilitate the decision at hand. Knowledge and facts help take emotion and gut reactions out of the process.
Lenders, agronomists, farm transition and human resource specialists all have something to add in the right situation. Learn more about how advisors add value to your farm management plan.
Finding the right fit
Identifying where you need help is only the first step. Finding the right people to add to the team and bringing them into the process is step two.
As you bring on an advisor, think of which family member or employee is the best point person to be in regular contact with them. Everyone should be in the loop, but having one person handle day-to-day communication to keep things moving makes sense to keep things streamlined and organized.
Even though you’re paying an advisor, they still need to be treated as part of the team. Including them in family meetings at the kitchen table allows them to see how the family members interact, and which decisions are the most problematic. They’re more likely to be of help if they know where everyone stands on the issues. Encourage everyone to engage and take advantage of the advisors’ services.
The relationship is a balancing act. You don’t want to hand off responsibility and expect the advisor to arrive at the best decision without your input or direction. Nor do you want to maintain an iron grip and micromanage everyone to show them who the boss is. The advisors’ role is to clarify the issue at hand and help you evaluate your options. The final decision is yours to make. Treat your advisors well and with respect, and you’ll maximize the benefits of the relationship.
Choosing the right person
Getting to know an advisor, bringing them up to speed on your operation, working through paperwork, building trust, and learning how best to work with them are things that take time to sort out. It’s costly to cycle through new advisors, so choose well.
Be curious when it comes to working with farm advisors. Ask lots of questions when you interview them to see if they’re a good fit. Almost any advisor will give you the first hour free, and you should take advantage of it to test drive the relationship.
Ask how your farm advisor is compensated. Is it hourly, flat rate or annual retainer? Ask them if there’s a bigger team they can lean on for answers when they’re stumped. No question is out of bounds.
Approach bringing on an advisor like you would hiring any staff person. Come to the meeting prepared.
Here are five questions to ask before hiring an agricultural consultant.
What if it's not working out?
If you feel the relationship with your advisor isn’t working, consider making a change and searching for a new one. This is where belonging to a peer advisory group can help. Ask other farmers you know have gone through a similar transition to describe how responsive their advisors are to their requests. Find out what advice they’re getting on specific issues, but keep in mind that just because one approach worked for someone else doesn’t mean it’s the solution for your family. If it seems like your advisor isn’t meeting expectations, challenge them to find a better way for you to work together. If that doesn’t cause any meaningful change in performance, it may be time to look for a new advisor.
With instant messaging apps and online conferences, your peers don’t need to be neighbours. Peer advisory groups and management clubs can also help farmers learn from each other.
Be honest and clear about your expectations with advisors. Transition is a specialized area – the advisors you’ve used for day-to-day operations may not be well-versed in the nuances of transition planning.
For example, you may need a different team to accommodate and optimize your business if the farm goes from a small sole proprietorship to a corporation with multiple revenue streams and full-time staff. Your current farm advisors might not have the experience you require. Use some of the crucial conversation techniques you learned in Preparing for farm transition and ask the advisor if they can recommend someone else to pitch in.
There will be a point where it will be beneficial to organize a team meeting with all your advisors. There’s a synergy that develops when you get a group of smart, motivated people chewing away at a complex problem in the same room. Sitting down with your accountant, lawyer and farm transition advisor at the same time can produce unexpected benefits. It doesn’t have to happen all the time, but putting faces to names, knowing who’s doing what and allowing your advisors to meet each other reinforces the team approach.
Embrace the expertise of others
Hiring an advisor or working with a team of experts can be challenging – especially if you're used to making all the decisions yourself. Just remember that’s why you hired them in the first place – to add expertise in a field where you’re not as knowledgeable.
Give smart people room to work. As Steve Jobs from Apple said, “It doesn't make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do.”