Conflict within the farm business
There are many forms of business ownership. There are many ways to lead and manage a business. There are many reasons why businesses begin, succeed or fail. There are many reasons individuals go into business and many reasons they organize the business or pair up with others to begin a business.
Too often in my experiences I find that some folks forget why they are in business and why they formed the business structure they are in with their fellow co-owners. Why be in a farming business? Has the reason a farm business began getting lost in the day to day operations? Have the needs of the business owners changed since start up?
I often hear the words: respect, communication, trust, change, and responsibility, and differences when I have come upon a farm with more than one owner and major issues are brewing. Often lack of adequate profits may be a driving factor in why there is an internal struggle in the business. Too often the internal struggle leads to even poorer economic results in the business and even greater stress in the farm operation. There then is less respect, poorer communication, the trust level declines and the only changes occurring in the business is greater conflict between owners.
What can business owners do that find themselves in an unhealthy business relationship environment? Sometimes in the formation of LLCs, partnerships, and corporations there has been an outside consultant that has helped put into place a written operation agreement that may lay out a formal process to address issues that may arise in the day to day operations of the business. This formal plan of addressing the issues can work and actually does work for many businesses. From the start of a business formation it is important to understand that differences are going to occur and that a way to address them should be part of the formation of the business.
Addressing issues before they become toxic to the business and to the relationships of those in the business is important even without a written plan to address them. I strongly suggest the idea of using coaches and mentors and find that it's very important to business success and to those that make up the business. Some churches such as Peace Lutheran in Eau Claire, WI offer the opportunity for individuals to pair up with a coach. Coaches offer listening and process to things that need to be considered. Mentors can provide guidance, suggestions and listening also. Often an examination of the core values of individuals and the businesses can be completed. Many mentors and coaches have experienced the challenges and struggles in business and in life. Search for a coach or mentor to assist in your challenges personally and with the business.
Can differences be resolved and can businesses move forward? Sometimes it is best to have third party mediation. It may be too difficult without this outside mediator to resolve what is causing chaos within the business. The outsider can work a process to find the issues and look for resolution and a process to move forward. Often I find there are issues behind the issues. Sometimes emotions drive the business rather than the facts. If differences cannot be resolved it is best the business be dissolved. I have experienced some that continue to struggle for years and that is not good for any of those involved.
The decision-making process and financial results often drive the success or failure of a business. Some farm businesses lack structure in how decisions are made. One example is a partner or two acting like 4 years olds in a candy shop. The partners want to clear the shelves of all the bright toys in the lot. Purchases are made on emotion without buy in from others that make up the business. Soon the balance sheet has a list of 5, 10, or more machinery loans that are demanding huge repayment that cannot be supported with the businesses’ earnings. Another example is when one or more business partners need great draws of income from the business for personal use than the business results can sustain. It is important to grow the size of the business to sustain the business and the needs of the ownership.
Bob Panzer lives and farms in Chippewa County, WI. He serves as a Land Manager for Pifer's Auction and Realty, Eau Claire, WI. He may be contacted at email@example.com.