Ask, Think, And Plan Before Joining The Family Business

You’re a recent college graduate and thinking about returning home to your family farm. You’re nervous about taking such a big step and want to make sure that you are making the right decision. Bernie Erven, professor emeritus in the Department of Agricultural, Environment, and Development Economics with The Ohio State University, says you’re right to be a little hesitant. Sometimes returning to the family business is a great move. Other times it is not.

Bernie Erven

Bernie Erven

“I used to ask my advisees, ‘Were you invited back, or did you just announce your arrival?’ Often it was just assumed that the person was coming back and there was no discussion,” Erven says.

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Such an important decision is, more often than not, made as an emotional decision, rather than a business decision.
“If you treat joining the family business as an emotional, family decision, rather than a decision where facts need to be put on the table and addressed openly and honestly, what kind of foundation have you built for the relationships you built after you join the business?” he asks.

History Matters

Before joining the family business, take a hard look at your relationship with your family, Erven says. What kind of history do you have with your family, who you’ll be working with daily? What history do you have with your siblings? How well do you communicate with one another?
“If you’ve had strained relationships before, or cool relationships, or even a distant relationship, what are the chances you joining the business will solve those problems?” he asks.

Communicate Before Joining

Erven suggests students graduating from college who eventually want to join the family business should first take a job somewhere else and learn what makes the business a success. Learn what they do and how they do it.
“After you have received at least one promotion and one increase in compensation — you have succeeded on your own — sit down with your family and ask ‘Is there an opportunity for me in this family business? Would you welcome my being a part of the business?’” he says.
“Carefully plan and select the questions you want to discuss (prior to your arrival), be sure you understand what your parents are offering, understand the agreement they are proposing, and ask the questions even if they are difficult questions,” he says.

Erven suggests asking your family these questions to make sure a strong working foundation is created.

  • What will be my responsibilities if I return?
  • Does the rest of the family want me in the business?
  • What have other family members already been promised?
  • How will my future compensation and ownership opportunities be handled?
  • (If one is married) are you expecting that both of us are coming in, or is it OK if my spouse has a separate and independent career?
  • What kind of feedback will I have on my performance?
  • Are you interested in my return because you think you would be doing me a favor? Or, are you interested in my coming back because the farm or the business needs what I would bring to the table?

If these are questions you might ask a potential non-family employer, they are just as vital to ask of your family, Erven says. After these questions are answered, determine what that means for you and your future.

If the answer is that you shouldn’t join the business, don’t. “I’ve had parents say to me the smartest thing we have ever done is fire our child,” he says. “(They tell me) we did her a favor, we did the business a favor; it really hurt when we did it, but we did what we thought we had to do.”

When we talk about this being a business decision, not a family decision, that’s what we’re talking about, Erven says.
“It’s not about the fact that you are in farming and it’s a way of life. It is that you have chosen to be in business together as a family. That’s what’s relevant,” he says.

Remember, There Is A Silver Lining

Although it is difficult to completely remove emotion from decisions, making each choice for what’s best for the business first will help ensure success for everyone involved.
The most positive experiences, Erven says, come with open discussions and stated expectations.
“Can family businesses work? Absolutely,” he says. “Can three generations work well together? Absolutely. Can it be successful if you are a family in business together? Absolutely.”

♦Tips For Managing Employees♦

Tips For Managing Employees

Employee management is a crucial skill to learn. It is especially vital for GenNext Growers moving into a management or leadership position in of the family business.

Bernie Erven, professor emeritus in the Department of Agricultural, Environment, and Development Economics with The Ohio State University, offers some tips for GenNext Growers taking on management positions on the family farm.

“What that older non-family generation wants is a supervisor who is competent, who is fair, who is a good listener, who is patient, who will work with the older generation and take advantage of their experience and their understanding of the situation,” he says. “Age is a convenient excuse for a supervisor or a boss who is not doing a good job with the people she or he supervises.”

Q: What should a young grower first do when taking a management position within the family farm?

A: First be patient. Next, develop a professional development program for yourself. Third, communicate openly, freely, and often with the senior managers. Fourth, ask for advice. Fifth, find out the jobs no one else likes to do, and volunteer to do them. Sixth, spend lots of time listening. Lastly, establish a residence, circle of friends, church, and school independent of your parents and siblings. In other words, have your own life.

Q: What should he/she avoid?

A: Don’t use your power to win. Don’t make big changes too soon. Don’t take complaints home to your spouse. Don’t threaten anyone.

Q: What are some key pointers for young managers?

A: Become highly competent in human resource management, supervision, leadership, and conflict management. If you are supervising older employees, be sure to learn how to manage people effectively.
Implement change slowly and through the ideas of others.

Compliment in public, coach in private. Emphasize informal feedback on performance. Milk others for their ideas. Make sure the most senior managers have your back. “You’re 25 years old. Your career will last until you are at least 75. You have a 50-year career ahead of you. You don’t need to get everything done by the first Christmas,” he says.