Fall 2020

Northwest Farm Credit: Rural, Real Estate, Operating Loans; Farm Loans; Country Home Loans; Lot Loans; Equipment Financing; Young and Beginning Producers; Crop Insurance; Business Management Education; Property Appraisals

Issue link: http://digital.nexsitepublishing.com/i/1310698

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Page 9 of 15

9 Northwest Farm Credit Services BMC Families in business together share a lot, which isn't always easy. It requires communication, understanding and some compromise. In many ways, being in business together is like sharing a car. Simple rules addressing refueling, cleaning, maintenance and repairs create guidelines that align expectations, drive accountability and fuel harmony. Many family businesses assume family members understand their 'rules of the road.' After all, sons and daughters grew up watching mom and dad drive. Shouldn't everyone be on the same page? We know the answer. Assuming people understand our expectations seldom works. Sooner or later, someone gets left with an empty tank, disappointment and hard feelings. What started as a bump in the road can lead to misunderstanding, hard feelings and even business breakdowns. Examples in family businesses: • Employment: What are family members' opportunities and how do they get or apply for jobs? • Workplace habits: When does the workday start and end? • Upkeep and maintenance: How clean is "clean"? • Vacations: How much time can people take off and when can they leave? • Decision making: What decisions can people make without talking to each other? • Compensation: How much do the various family members get paid? • Financial: How is capital reinvested or distributed to owners? Together, the questions above and others like them inform family members about the rules of the road for the business. Most rules are simple, but some – like how capital is reinvested – can be complicated. Whether straightforward or complex, the rules of the road for a family business should be explored together. Developing rules of the road is important and doable. Share this article with your family business team and ask the following questions: • Perceived rules: What are the written and unwritten rules for business and family? • Accountability: How well do we all follow the rules? • Gaps: What questions do we need to answer to align expectations, drive accountability and fuel harmony? Ask individuals to submit written answers to the above questions separately. Create a table like the one below, enter individual responses anonymously and share your summary in a family business 'rules of the road' meeting. Family Business Rules for the Road Michael Stolp • Northwest FCS Senior Family Business Advisor Rule: Gap: 1 . We work every day but S undays , always . T hat's ranching . 2 . Yo u' ll g et paid for t he work yo u're put t ing in whe n farm owner ship transit io ns . 1 . T his do esn't work for everyo ne in t he family , espe cially wit h k ids act ivit ies o n t he weeke nds . 2 . A lot c o uld happe n bet wee n now and t he n . . .

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