Supporting the Family: Obligation vs. What’s in the Best Interest of the Farm Business
Let's look at another one of the common mistakes many Farm Business owners make running their Family Farm Business. Many Farmers make the assumption that the their Family Farm Business should support any and all family members that are interested in working together. We hope to unpack this assumption a bit for you here, and uncover some tools that will help you plan for success in your business endeavors.
Responsibility and Wise Business Decisions
The belief system that the Family Farm Business is responsible for employing all family members is one that carries much stress, weight, and relational tension. Most people feel a natural responsibility to take care of their family members. However, family obligation must be weighed also with what is in the best interest of the Family Farm Business.
There are a few questions that you should ask before considering whether your Family Farm Business can support additional family members:
- Are the business financial resources and performance strong?
- What does the estimated cost of living look like for each family supported by the business? Consider housing, health care, insurance, and other lifestyle factors.
- Does the business cash flow match the total estimated cost of living for the families supported or to be supported by the business?
- What does the financial future look like for the senior members of the family? Has this been planned for and secured?
Hopefully the answers to these questions can shed some perspective as to whether bringing additional family members into the Family Farm Business is in the best interest of the Farm.
What About Those Family Members Wanting Employment on the Farm?
There are a few things that are helpful to consider when determining if you should bring additional family members into the Family Farm Business.
Here are some questions to consider for those family members wanting employment on the farm:
- What strengths, benefits, and anticipated results are you able to offer the business?
- What are the business needs? Does the business’ needs match what the family member is able to offer?
- What are the costs that the business will incur as a result of the family member being employed?
After careful evaluation, if you are able to determine that you should bring additional family members into your Family Farm Business, consider a probationary employment period. This allows you to try things out and make sure that this family member is a good fit and that their employment is in the best interest of the Family Farm Business. If you determine after a probationary period that it is not a good fit, it’s essential to remember that you remain family, whether or not you are working together.
Questions? We’re Here to help!
Our specialty and expertise here at Barrett Financial Services is in helping Farm Business Owners like you plan for a successful future. We are privileged to offer our clients customized Financial, Business, and Tax Planning. The members of our Financial Planning Team at Barrett Financial Services are happy to answer any additional questions you have about Farm Business Plans or set up an appointment to discuss your financial goals and needs. Please contact us if you have questions we can answer and a member of our team will get back to you.