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 What is Sweat Equity worth ?"The thing we really need to do more research on is the value of sweat equity" said David Goeller, Transition Specialist from the University of Nebraska. Goeller was one of the presenters at the International Succession Conference this past August in Ottawa. It was a goldmine of helpful information for me as a presenter, and as a farm family transition coach. I've had some interesting calls during combine season, seems that the hard long hours of harvest bring out the best or the worst in people. Young farmers are asking tough questions about the promises they keep hearing "someday this will all be yours" , "don't worry about money, ask mom to write a cheque when you need it", "being 36 you should be happy with the things we've already set you up with". Founders and tight-fisted fathers beware. Your son and daughter-in-law have options to leave the farm team, and start somewhere else. They are tired of promises, and need titles of ownership, fair salaries, and strategy with timelines to have shares transferred. I have asked some of my agrologist and CAFA colleagues (see www.cafanet.com) who are part of the Canadian Association of Farm Advisors (CAFA) to tell me some happy sweat equity stories. One fellow wants no resentment about his ability to bring extra cash to the farm via his lucrative off-farm work. He puts all his off-farm income into the farm financial pool. This is crazy you say, well no, it works for him, because he sees everyone on the farm team as potential contributors, and there is no resentment or anger for the days he has to leave the farm work behind. Another fellow bought a company that deals with food, but made sure that the farm corporation has a silent partnership. These folks are not greedy. They likely also have regular business meetings with their farm team to make sure everyone is happy with the cash-flow streams. Sweat equity is a sore point with non-farming siblings also. The kids who head to university and get great paying city jobs, forget about the sacrifices of the brothers who stayed behind to help dad. Times flies by, and before you know it there is 20 years of equity built up, lots of labour, time, decision making contributed, but nothing in terms of ownership or management agreements to prove the value of 20 years of commitment to the farm contributed by the son who stayed home. His sweat equity is not valued. We are all living longer. Hanging on to shares, title, and management may make you feel in control as the founder, but you are choking your son. It's time to have that hard conversation about transition with your son, and also with his sisters and brothers. You can still be involved in your farm business, you're living longer, and you can be useful. Your role just may be different. You also need to know that there are many great agrologists out there who can work you through the CFBAS program for $100, and give you 5 days of fabulous financial awareness to make better decisions about everyone's future. We just sat down with our advisor to let us know if we still had some gaps in our tax planning, and we sleep well at night knowing that our affairs are in order. People will work harder when they know they are helping to build equity for their own families, or they are happy to contribute to the benefit of all. I urge you to get your act together about the way you treat your farming sons and daughters. If you need to ask for help and advice, swallow your pride, and make the call. You want a happy family. Happily families are strong business teams who have a system for open, respectful communication, and they have a way to deal with conflict. If you need to overhaul your thinking about expecting your farm kids to live on promises, I'll be happy to give you some feedback. We'll be doing tele-seminars this fall where you can call in and be part of the conversation about succession issues that are keeping families stuck. Go to www.askelainefroese.com I would love to hear your happy "Sweat Equity" stories, to glean more ideas to give positive models of success to other farm businesses. Dave Goeller can be reached at dgoeller@uni.edu. His key questions are : "Do you want to have a successor for your farm ? "Do you want to transfer the farm on as an on going " business" or as a "pie" that is cut into pieces?" Chew on those questions for a while, and come to agreement with your spouse. The best Thanksgiving gift you can give your family is an attitude of gratitude for everyone's contribution, and then an actionable plan to continue to the next generation. Enjoy your turkey, and embrace the equity issue for the sake of family harmony. Keep the family celebration on a separate day from the farm business discussion. I hope the only "pie" you'll be slicing will be pumpkin, and not the farm. Elaine Froese is a catalyst for courageous conversations with farm families in transition. She speaks across Canada and the US to give practical tools for talking about tough issues. She'll be celebrating Thanksgiving with her family at the farm near Boissevain. Visit www.elainefroese.com or call 1-866-848-8311. Buy her award winning book "Planting the Seed of Hope", a gift that lasts, and encourages change. |
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