Continuously Improving Series - When Professionals Pay Off
We all know we are speaking to, and about, a different generation in today’s farming community. It’s a community that is rapidly growing in education, financial knowledge and the eagerness to do more, to do better and leave their legacy in the ag world. It’s the idea of continuously improving, looking at ways to maximize both the time and dollar investment spent and ensure that we’re doing it better than last year and decades before us. In part-two of this five-part series on continuous improvement, we look at the value of today’s professional services and how to get the most from your professional team.
I write about this because gone are the days of many farms across our country doing things solely on their own. Even the smaller operations usually have some sort of team of professionals around them, from agronomist experts, to accountants and tax planners, to legal teams and a farm advisor, there is usually more than one professional advising today’s farmers on how to do more and be better.
Over the past two decades of my work with farm families one of the largest shifts I have seen is in the attitude of farmers today to welcome and respect professional services to their family business. Gone are the days where they are letting the world think they have it all under control on their own. Instead, people are sharing in the community the value they have received from those professional services. It isn’t conversations anymore grumbling about how much they paid for their legal or tax advice, instead the conversation has shifted to the protection they have of their family business now or how much their professional has helped them save.
“When working with farm families today, it’s not a single system approach anymore,” says George Sinker Lawyer, Family Enterprise Advisor (FEA) and certified Canadian Association of Farm Advisors (CAFA) in Strathroy Ontario. “Farm families today are taking a more holistic approach to understanding the entire system and how each piece of professional advice works with the other”. A trend Sinker has noticed is this willingness of the younger generation to use their professional team as advisors rather than just the people implementing a plan or direction. “It used to be people would call us to prepare a shareholder’s agreement or help with the corporate structure of the farm and now it’s not uncommon to receive phone calls throughout the process asking for advice about what it should look like and how it fits into the overall tax strategy for the farm. The younger generation is looking forward, not backward, and embracing the idea of strategic planning for their family farm business.”
It’s using this approach and this model of thinking that has helped farm families in the work I have been doing understand the value of the professional team and the role a farm advisor plays in farm business planning. It’s looking ahead and planning. It’s applying what successful businesses and corporations have been doing for decades, planning, strategic planning, determining visions and goals and tangible plans with clear direction on how to get there. When I work with families one of the first things we do is talk about their professional team and how we all work together to achieve common goals. And I hold the family accountable to these goals and align them with the goals of other family members. The on-going difference of course in this happening with a private business vs. a family run farm business is the family piece. And that is the big piece. And that is where more and more farm families today recognize the importance of bringing in a qualified, independent advisor to help coach those courageous conversations.
“In the past, many farm succession plans were done with tax dictating the best way to transition and not the family’s overall wants or needs,” says Matt Holmes, CPA, CA at BDO Peterborough who specializes in agriculture tax planning with clients in Central Ontario. “When qualified farm advisors lead the discussion, family dynamics are considered, the opinions of all family members are considered and there is a more substantial plan that is developed.”
Holmes agrees with the trend of advisory teams rising in popularity in the agricultural community, noting it is no longer good enough anymore for one person to meet with one person and build a plan around that. It’s also today’s generation who are pushing for continuity and formal plans. “Kids these days aren’t willing to work for the next 40 years without knowing about ownership, they want to know what the plan is,” he says. “Some of the older generation views this as entitlement. They need to instead view it as good business people who want to be involved in what the transition looks like.”
When I was writing this article and speaking to Sinker, he said something really stuck with me. As we talked about this idea of continuously improving and how we are determined to do more and really protect and educate the next generation of farmers he said “we don’t just want farm operations to survive. Our goal is to create value across generations. That is what I really think we can do.” We know it is challenging work to do the management side of the business, we know it is an investment of time and of money and we are acutely aware how uncomfortable these conversations can be to have with your family. But the payoff is huge. We can help families have the conversations they badly need to have – and together we can create an aligned vision for the roadmap to success with continuity. Families must recognize the need for professional support, much like any business we need to leverage our strengths and rely on the specialists to get this work done, which allows you to keep your focus on what you do best – to continue farming.
How can you get the most from your professional team?
Assess and build trust. This is critical. Find a team you can trust and openly share your thoughts with it. It’s a personal journey and its your legacy. Be confident you have the right team around you who you can share these thoughts with.
Know what you are asking of them. Be clear on the outcome you would like. Our role is to help get you there and reach your family farm goals.
Recognize they are the professional and you are not. Let your professional team be an expert in their field. When hiring farm advisors, look for credentials, ask for references and then remind yourself through the process why you hired them and respect the advice they provide you.
Hold your professional team accountable to timelines and budgets. A farm advisor works with your legal and accounting team to do this work on your behalf but remember the timelines you set for your entire team. When there are delays in this process, its your right to hold the professionals accountable to these timelines.
Stay focussed on the goal. We encourage families to think continuity to think more than just one generation. Stay focussed on what goals you must set to protect your legacy and ensure it lasts for future generations.