This is what you have been working towards for the last 5 years. Working on different farms building your skill level and working hard. You have risen through the ranks quickly. You have listened to the people that you trust and know how they achieved their ownership goals. You have listened to the stories of success. It is your time to make a run for your dreams.
You have spent your life working hard to create a place for you and your family. You have taken opportunities to buy land and made sacrifices to get ahead. It is now time to bring people in to work on your farm to allow you some time to do the things you have always wanted to do. Spend some time with the grandchildren and children. It is your time to enjoy the next chapter of your life.
There are great articles written on the financial and legal focus of business partnerships. This articles focus is on the people side of the business relationship.
At the core of these agreements there are people and it is a relationship.
Take it slow and get it right
Successful farmers/people love to get jobs done quickly, they have a process and a list and they work through that list quickly and efficiently– it is what has made them successful.
Also, it is easy to think that you must move quickly to get the best farm or job before someone else gets it. Or, it feels like you need to secure the best sharemilkers before they are snapped up. This is not a job to complete quickly. You should have at least 3 -4 meetings before signing a sharemilking agreement and longer for an equity
partnership. I would also suggest working together for a year before entering any long term business arrangements to really get to know the people you are going to have a business relationship with.
Behind the legal agreement is a person
You need to fully understand the agreement but what about the people? It is easy to look at the agreement (equity/sharemilker/contract milker or employment) and think that it is a legal partnership but what you are agreeing to is a business relationship. Behind the document is a person (or people). Do the people you are going into business with expect the same behaviours and practices as you?
What are your core values (the way you do things)?
It is easy to think that all people act and farm the way that you do. Hard to believe but all farmers/people are different and have different ideas and ways of farming.
Some people focus on tidy farms, some on animals, some on production, some cash and others people. There are other topics that people are passionate about. Are you on the same page? Don’t negotiate your core values. As you go through the process of looking into a position never think “It will be OK, we can work that out later” If you get a feel for an issue bring it up.
There is still a need to negotiate and agree as you work together
Get clear on how you will communicate. There can be some teething issues in the early parts of the arrangement arround communication but be proactive with issues before they turn into one moment that turns
the relationship bad.
One of the most important appointments in the relationship is the person that will be used as an independent adviser. I stress the part independent and somebody you both trust and respect. All due respect to cows and grass consultants but they may not be the best person to provide that impartial advice on the business relationship. It is a different skill set required.
Getting an understanding of the people involved from previous business partners or employers is a must. That goes for all parties, the owners and the people on farm. Never feel that it is impolite to reference check other parties. I stress it is a must as all people can put on a show for a few hours.
Farm owners should expect this question from prospective sharemilkers and equity partners; “Would you mind if I called a couple of your previous staff or advisers as we want to make sure that we are the right fit for this farm?”
This is an opportunity to show your new business partners that you are open and honest and someone worth working with. Sharemilkers/Equity partners should be wary if the other partner becomes upset or deflects. It shows you that they are:
a) hiding something or
b) have status issues and may be difficult to work with.
Be open and transparent about everything
If you lose trust you have nothing. Put the negative information out there at the start, even if you think it will look bad. Transparency is the key to a long-term business relationship.
Never be afraid to ask a question
Get it out in the open.
If you have a suspicion that you might not be on the same page always ask the question. Look for the unsaid comments. People have a habit of saying things in the interview that are conveniently and honestly forgotten. If it's not in the contract, be aware it may not exist. Trust your gut feel with people- it is usually correct.
There is no 'Your business' and 'My business' to be successful - there can only be 'Our business'.
There may never be full fairness in a business relationship. You can however have openness, trust,
respect and consideration of the other party to find middle ground.
Most importantly never be so desperate (or keen, or over confident) to look past the failings of the other person (or property) by thinking that you for some reason succeed where other have failed.
Stu Taylor, Dairy farmer at the OB Group and voice behind the concept that is 'Millennium Farming'