By Elizabeth Williams, DTN Special Correspondent
WABASH, Ind. (DTN) — Many farmers dream of passing the family business to the next generation, but a strong business relationship between two generations is a two-way street.
Avoiding the potholes is the key. The older generation needs to give up some control and decision-making, and the younger generation needs to prepare and adjust their work and communication skills to get the partnership started on the right foot.
Over the years, Howard Halderman with Halderman Farm Management in Wabash, Ind., has seen what works and what doesn’t when the younger generation comes into the farm operation. He frequently speaks at Purdue University, advising students how to prepare to go back to the farm.
The following are five steps he says make that transition successful.
1. Outside experience is beneficial. “I wouldn’t trade my off-farm experience for anything,” said Kimberly Snyder of Logansport, Ind., who worked for five years for an accounting firm before returning to her family farm. “I learned computerized accounting and I learned how to relate to 13 plant managers who were our clients. That has helped me deal with vendors, advisers and landowners.”
Traveling overseas can also expand your perspective. Emily Hirsch, who farms with her family in Fort Branch, Ind., visited China as a student at Purdue. “You see the world and agriculture from a different perspective. You really appreciate things at home much more,” said Hirsch.
2. Interview and negotiate for your position on the farm. “Ask for a job description,” advised Halderman. “If your parents farm with siblings or parents, have everyone in the room talk about expectations and compensation.” Carve out specific responsibilities that you’ll be in charge of such as herbicide purchase/application or technology implementation.
3. Learn all types of jobs. “Even though you want to work into management, no job should be too low for you,” Halderman said. “You have to start at the ground floor and earn the respect of hired labor and management. That could mean tearing out fence, picking up rocks or farmstead clean-up, in addition to your other duties.”
4. Contribute ideas and be involved in decisions. “If your goal is to eventually manage the farm, don’t just drive the tractor. Your job is to add value to the farm operation,” said Halderman. “If you need a new planter, you can do the research and recommend the top three, with reasons, even if Dad makes the final call.”
Snyder came back from TEPAP (The Executive Program for Agricultural Producers) management course excited about writing a farm newsletter for landowners and employees. “Dad said it would be a waste of time and energy. Five years later, I finally convinced him we should do it and we got such positive feedback, it’s grown from one to four or five pages and we write it quarterly,” Snyder said. “It has a crop update, a business update, something on safety, a recipe, a “Kids Korner” and birthdays and anniversaries of everyone involved in our operation, including landowners.
“The landowners love it,” noted Snyder. “It shows we care and include them as part of our family. We’ve had several landowners thank us for putting their birthdays in the newsletter and sending them a card. It probably takes us a full day to put it together. But it has really helped make working with our landlords easier. Our landowners know what’s been going on in our operation. We don’t have to catch up on a full year of what we’ve done.”
5. Know weaknesses of the current operation and work to strengthen them. “You may not be bad at anything, but there may be weaknesses in your operation,” said Halderman. “Is there a place where you can add value to the farm — develop financial reports for the banker, improve your commodity marketing, use better technology on the farm?”
Take classes in college that will strengthen those weak areas, Halderman advised. “I took an elective in school on farmstead planning — how to set up a grain storage facility. It was fascinating. Most of the time, the professor will let you use your farm as your class project.”
Identifying your strengths and weaknesses is a precursor to developing a strategic plan for your family’s business. When the next generation comes back to the farm, discussing a long-term plan heads everyone in the same direction, said Halderman. Ask where do you and your farm operation want to be next year, or in 5 or 10 years? “Most businesses have long-range strategies. Why are farmers different?” asked Halderman.
Adding value and growing the business is the mantra for multi-generational farm businesses. Also, the enthusiasm of the younger generation is contagious. However, that also runs both ways. “My dad loves what he does. His excitement for his job has been passed onto me,” said Hirsch. “I can’t wait to go to work every day.”
Editor’s Note: DTN’s on-going Senior Partners series examines the financial, legal and emotional hurdles families face as they transition farm ownership from the senior to junior partners. To read other features in the package go to InDepth at http://www.dtn.com/…
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Posted with DTN Permission by Haylie Shipp