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Advisory Board Helps Steer Decisions

Many multi-generation family farm operations could benefit by meeting once a month to talk about what is going on operationally. Visiting while choring is fine, but managers will delve deeper and remember longer, discussions that occur at a more structured set-ting.

Don Doudna, Family Business Resource Center, Clive, Iowa, says mid to large-scale operations could also benefit from having an outside person meet with the family at least once a quarter, possibly once a month, to talk about how the business is going.

Here are some qualifications to determine who those outside consultants might be. It should be someone who:

• Has some knowledge of agriculture;

• Has sharp business skills. It could be a well-respected local entrepreneur, some-one who runs a hardware store or restaurant - someone who has to meet payroll and is responsible for running a business.

• Is not the family accountant or lawyer. They give sound legal and financial advice, but their specialties can hinder their ability to give good business advice.

• Knows and is willing to ask the tough questions. "You had this happen this quar-ter, then why did you do that and have you thought about this?" says Doudna. “It is really having a set of eyes that has nothing to do with the family or the operation examine the business.”

• Will keep shared business information confidential.

"The family may pay the off-farm business person for the review," says Doudna. "Or the farm managers may reciprocate and review the decisions of the non-farm business person."

The farmers need not follow all of the recommendations the businessperson suggests. But they should understand the business reasons behind those suggestions before they take another course.

"Many small businesses set up boards of advisors," notes Doudna. "Growing farms might consider an advisory board to get business perspective from a broader range of business people.

"Having those meetings is one step," he adds. "A next step may be an annual strategy planning session. The family would focus on forming long-term goals and devising ways to meet them.”