Changing the 'model of family businesses'
Don Jonovic, family business consultant and popular Can This Problem Be Solved columnist for Successful Farming magazine challenged beginning farmers at the Farmers for the Future Conference Tuesday in St. Louis.
"We have to change the model of family businesses," he said. He outlined the following four actions for survival and growth.
- Ensure that you are actually able to make decisions
"95% of small businesses never get together to talk about the business," he said. "There are lots of decisions to make in this thing called a farm transition, but we never talk to each other." He urged participants to meet with family members involved in the farm, and to involve trusted advisors in this family circle.
- Reach agreement on why you're doing all this
"It's essential to understand what you're doing, and why you're doing it," he said. "People involved in the operation as well as off-farm family members have different but legitimate perspectives. This often blocks good decision-making. You need to find common ground."
- Elevate transition planning to the level of strategy
"Transition is a process, not an event," Jonovic pointed out. He suggested that families reach agreement on key questions such as "Where do we want/need to be? The future is uncertain, but we can agree on where weÂ’re going, and how fast we go." Jonovic told the young farmers that addressing estate tax issues are only part of the discussion. "That alone doesn't provide a structure that protects assets of the business," he said.
- Develop a leadership that can manage tomorrow
Jonovic said that the current model for developing leadership on farm operations requires re-working. "Dad typically has three ways of teaching," he said. "Shut up and watch; Shut up and listen, and stay the heck away from here. A fourth would be, "Read my mind." He said that the younger generation wants the following three things:
Don Jonovic, family business consultant and Successful Farming columnist talks with SF Farm Issues Editor Cheryl Tevis about the implications of the current economic downturn for family farmers, specifically young and beginning farmers.
He suggests that Dad needs to begin building an alternate career to ease the leadership transition. "It takes time to prepare," he says.