Business model puts family first, says expert

CALGARY — Operating the farm as a business-first family operation rather than a family-first business shifts the tone of the conversation, said Alberta farmer Connie Stasiuk.

The participant at the Advancing Women in Agriculture conference in Calgary said doing so takes the emotion out of the equation.

“When talking about business, it’s strictly the dynamics, the rational, non-emotion, structure,” said Stasiuk, who produces grains and oilseeds with her husband at Rochester, Alta.

“When you have the business-first model, it gives you a language, perspective, focus that takes it outside of emotion of you as just a sibling or a wife. It removes you from the role of the family to that of a businessperson.”

That’s especially important on today’s farms, given legal concerns, farm succession and high land values.

“We need to talk business, not emotion anymore,” she said.

Stasiuk looked back on her early days in farming, when her parents decided their farm would go to her brother.

“They were not looking at it as a business model,” she said.

“It was all emotional. If you were the male, you had the birthright.”

Her daughter, Kelsey, will soon marry a farmer who is currently in the midst of a family farm succession.

Kelsey and her sister, a chartered accountant who is married to a beekeeper, are also considering their own farming futures.

“We’re trying to piece together a plan so we don’t have to sell off the land and can be profitable and continue on,” said Kelsey.

She said it’s important to talk through succession planning and have financial transparency in the business.

“Discuss expectations and goals and what each person hopes to get for their future,” she said.

Both women picked up tips from farmer, family business consultant and author Jolene Brown, who relayed the mistakes commonly made in family businesses during a conference workshop.

“We’re not pulling things out of thin air; it’s coming from an expert, someone who has anecdotal evidence,” Connie Stasiuk said.

“That credibility is there to support our conversations.”

Brown highlighted areas of conflict in family business such as the lack of written plans, ignoring in-laws and off-farm family members in succession plans and not knowing if the business can support more family members.

A family-first operation that says let’s not rock the boat and operates on traditions and hope may not provide the best leadership and accountability, she said.

A business-first farm does not demean family.

“It says we love and honour the family so much we will give the business a good start, ” she said.

In her often humorous presentation, she outlined the four tools she uses to guide farm families, including a mirror to look at where they are today and a box of tissues.

“When emotion and logic collide, emotion wins,” she said.

Duct tape comes along to keep the family rooted in the present tense, and a two-by-four is a last resort and fourth tool.

“Sometimes you just have to let them have it,” she said.

Brown said family farms need to ask themselves if they want to continue, when they will transition labour, management, leadership and ownership and who will be part of the business.

Assuming that the family will work well together no matter what is a top mistake.

“If someone in the family is rude, don’t hire him — no one else would.”

A family business is not the place to rehabilitate a family member with issues such as addictions.

“You tolerate in a family business what we would not stand for elsewhere,” said Brown.

Pick those best qualified for certain roles, whether it’s family or employees.

“Who has the character to lead the business, what is needed to lead the business before choosing a leader?” she said.

Ease the next generation, ideally when in their 40s, from labourers to managers and start transitioning leadership and ownership.

Brown said the elders can continue to provide invaluable mentorship and expertise.

“You want someone who has ridden the roller-coaster to advise you.”

Transparency in finances is critical, Brown said, noting all the family members who are involved need to know what’s happening with the money.

“Do not bring someone into a financial mess and expect them to fix it.”

Her other advice is to ensure that the senior generation is financially secure and that the business can afford adding more family members.

“When the next generation wants to come back, you have to know what it costs, know what every person costs to the business.”

Brown suggested probationary contracts, with three weeks notice given if the incoming member is not a good fit after a year of working on the farm. In addition, she recommended meeting protocols, standard operating procedures for resolving conflicts and a code of conduct identifying the business’s values and expectations.

Ensure family members know what and where important documents are housed in the event of sudden death, injuries, accidents or impairments.

Legally binding estate planning and other legal documents should be signed by all involved, said Brown, who encouraged families to work at getting 100 percent consensus and signing off on it.

“The rules of the game must be known,” said Brown, citing exit strategies, buyouts and how to break apart among other details to settle. “If it’s not in writing, it doesn’t exist.”

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