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Family Business Matters       08/30 07:26

   Prevent Fireworks 

   Attention to three areas can help keep people on the same page and prevent 
deeper conflicts from tearing the fabric of family relationships.

By Lance Woodbury
DTN Farm Business Adviser

   In helping families communicate about the future of their farm or ranch, we 
often run into conflicts between family members. These conflicts come from a 
variety of sources, such as past behavior or different expectations about how 
situations should be handled.

   A seemingly rude comment, the lack of an invitation to a business meeting or 
family event, going around someone to get something done or changing plans 
without notification are just a few examples of what can lead to fireworks in 
the family business.

   Conflicts also arise from misunderstandings, basic assumptions and different 
visions about the future of the business. These conflicts can go deeper, 
shaking the foundation of the entire family business partnership and sometimes 
resulting in the unwinding of the enterprise. 

   Expecting there will never be such conflicts in a family business is naive. 
However, attention to a few important topics sooner rather than later can help 
prevent these deeper conflicts from tearing the fabric of family relationships. 
Consider the following three areas that help keep people on the same page.


   Family members in different parts of the business, such as crops, livestock 
or the office, or even off-farm owners, have access to different levels of 
information. Someone in the office might have information related to finances. 
One or two people might be focused on grain marketing decisions. Someone 
working outside may have better information on equipment needs or crop 
conditions. Many people have some knowledge of a part of the family enterprise.

   To work well together as partners, it is important that family members have 
a common level of understanding about key issues affecting the business. Not 
everyone needs to know every detail, but most current and future owners benefit 
by having a grasp of key business issues, problems and projections. Taking time 
to share that information helps reduce the information gap and builds a shared 


   Participating in a family farm or ranch offers a variety of vocational 
rewards. Growing crops, feeding others, being outside, working with family and 
caring for animals can be deeply satisfying. But, as a business, people also 
expect some level of financial reward. A living wage, basic benefits, a return 
on investment, growth of one's net worth and a balance of work and personal 
time are a few of the expectations your partners may have. 

   With a family's desire to work together coupled with those intangible 
rewards, many family businesses do not formalize the financial rewards or 
expectations the same way a non-family business might. Because rewards are not 
formally discussed, dissatisfaction grows, and a chasm develops between 
expected and actual rewards. Spelling out wage, benefit, dividend and capital 
distribution policies helps to prevent financial dissatisfaction from breaking 
up the partnership.


   There is often generational momentum to continue operating, or at least 
owning, the family farm or ranch. But, as more people inherit ownership and the 
number of partners grows, sparks can fly. Many of these new partners didn't 
make the original decision to be in business together -- their parents made 
them partners. It is helpful, every so often, to review the reasons you want to 
continue in business together. If someone wants to exit, it is easier to bring 
it up if there is a regular pattern of evaluation.

   Partnerships are hard work, and many people try to avoid partnerships 
altogether. But, family ties, the cost of land and the generational nature of 
our industry make partnership maintenance an important activity. Sharing 
information, clarifying rewards and reminding one another of the reasons for 
your partnership will help prolong and enrich your family business partnership.


   Editor's Note: Write Lance Woodbury at Family Business Matters, 2204 
Lakeshore Dr., Suite 415, Birmingham, AL 35209, or email 



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