There’s an adage: “If you’ve seen one family business, you’ve seen one family business.”
Yes, family businesses have specific mixes of personalities, assets and history. But while attending the Family Business Transitions Conference, I was struck by the threads of similarity.
Regardless of a company’s size, other family business leaders struggle with many of the same challenges as our enterprises in agriculture. The conference hosted by Family Business Magazine attracts a broad range of attendees — from large companies with tens of thousands of employees to those still run by the founding generation with $10 million in sales to everything in between. It’s all there: manufacturing, real estate, retail and services.
One ag-focused attendee said, “I’m stunned by how these giant companies have the same challenges we do.”
Even large operations share many of the same challenges, with ownership families seeking to:
- collaborate effectively while selecting the most skilled leaders
- balance financial outcomes and distributions that owners expect
- assist a retiring partner who is struggling to let go
- manage taxes through estate planning, even though it creates complex legal structures that require ongoing work
- keep multiple generations connected to the company’s legacy
- nurture interactions and build that relationship glue to retain “patient capital”
- update governance as more family members get involved
Learning from others
Rather than being discouraged by those common challenges, it was motivating and valuable to learn from others’ examples. We can take an idea and rightsize it to our situation.
For instance, we saw examples of formal boards of directors in the larger companies and how they are elected from among many family branches. How can we rightsize that for our operations?
Maybe we start with training the whole family on what a more typical board meeting looks like and try it twice a year. It starts building a precedent that we may need as the business grows into cousin generations and includes off-farm heirs. It also spotlights what technical topics all owners need to learn, such as how to read financial statements to understand risk or debt.
At the conference, one speaker from a large company described how they use jars of colored M&M’s to illustrate how different entities interact with each other financially. It also illustrates asset restructuring. We may be trading ownership percentages between entities during restructuring, but each person ends up with the same total amount of value (M&M’s in a jar). Many of our farms certainly have multiple entities and could try this one!
We left the conference energized to tackle projects we had been putting off. Where do you find opportunities to learn with others?
Try interacting with other folks, who may be at ag industry events or functions outside your usual circles. Attend a different conference each year to get a variety of viewpoints. Take advantage of local seminars offered by chambers of commerce, business incubators or family business centers at colleges in your region. Go to a TEDx conference. Join a peer group.
Someone else in a family business can offer a learning nugget and has common experience to share. I encourage you to find opportunities to learn, gain fellowship and encouragement, and invigorate yourself.
Cook is an ag family business consultant at Pinion. Reach Davon at davon.cook@pinionglobal.com. The opinions of the author are not necessarily those of Farm Futures or Farm Progress.