Legacy Project

Avoid These 4 Family Business Sins

Tue, 25 Jul 2023 17:34:48 GMT

Here’s how you can avoid committing these harmony-harming mistakes

Family business is tricky. Profit goals can clash with personality dynamics. Unqualified people might lead key positions. Talented and motivated children might feel stuck in a predetermined path.

“There is great power and commitment in a family business,” says Val Farmer, a clinical psychologist who specialized in family relationships during his 30-year career. “But the family must get along and the business needs to make money.”

To meet your family farm’s goals, avoid these common missteps.

UNDEFINED ROLES

Family businesses often require an all-hands-on-deck model. “Children and parents, husbands and wives, extended family members and different generations may serve as employees, managers, shareholders and advisers at various times,” says Cari Rincker, principal attorney with Rincker Law . “These overlapping and potentially unclear roles can be a source of conflict.”

Match family members to the roles that best suit them, she suggests. Create specific expectations for everyone and respect the boundaries of their duties.

“Clear responsibilities help create ownership of and respect for business roles,” Rincker says. “It is nice to know others can jump in when needed, but when roles become too blurred, conflict can result.”

BLURRY BOUNDARIES

Farm families can easily slide between business and family needs and priorities, but they need to separate the family dynamics from the business itself, says Rena Striegel, president of Transition Point Business Advisors . Conversations need to be clearly business discussions or family discussions.

“When we separate those, it makes it easier for farm families to communicate and make decisions together as a group,” Striegel says.

DETRIMENTAL NEPOTISM

Of course, you want to favor relatives in a family business, but they must be qualified. “Adult children or siblings who are lazy, selfish, addicted or dependent rob the rest of the family members in the business of enthusiasm and motivation,” Farmer says. “Working around someone while walking on eggshells or carrying their load is no fun.”

Analyze how you treat, motivate and promote family members versus non-family members, Rincker adds.

“If nonfamily workers are held to a different standard than family workers, they will be difficult to motivate and retain,” she says. “A level playing field in terms of treatment and advancement is essential. A merit-based culture that holds everyone to the same standards can motivate everyone, whether family or nonfamily, to achieve more.”

ECHO CHAMBER

Family members often find a groove or don’t want to rock the boat. As a result, original ideas or new strategies stop surfacing. To avoid an echo chamber, consider an advisory board, Rincker says.

“A board can help ensure business decisions are handled professionally,” she says. “Consider nonfamily board members as they can improve the business’s prospects of managing and attracting both family and nonfamily talent.”

The Best of Both Worlds

Well-run businesses take on the caring qualities of successful families, says Val Farmer, a clinical psychologist and author . On the flip side, well-run families take on business sensibilities of successful businesses. Farmer says these are the qualities of successful family businesses that find that perfect middle ground.

Share a vision and commitment for long-term goals. They invest money and time to improve the abilities of their members.
Involve its members in the process of management and leadership.
Have systems of communication in place where ideas at the operational level are heard and make a difference.
Delegate responsibility and decision making to the lowest level possible.
Give abundant recognition and appreciation for the work being done.

To access resources and tools to help guide your succession planning journey, visit FarmJournalLegacyProject.com

You can learn more about succession planning at the 2022 Top Producer Summit! You can hear from Rena Striegel, Paul Neiffer and Polly Dobbs! Register now!

Young Producers Pave Their Way in the Beef Industry

Fri, 13 Nov 2020 02:16:38 GMT

Young producers are a rare sight in pastures and farm fields across America. Breaking into the cattle business is difficult. It requires a number of assets including land to graze and grow feed, equipment and genetics. USDA’s Census of Agriculture estimates there are 2,109,363 farmers and ranchers, but fewer than 120,000 are under the age of 34. The average age of American’s involved in farming and ranching is 58.3 years old, and the trend has been on the rise since the 1980s.

Despite barriers to entry, many young cattle producers have beaten the odds. At the Range Beef Cow Symposium held in Loveland, Colo., three young producers shared their experiences getting started, overcoming unique challenges and maintaining cattle operations.

Chasing a Dream

As a freshman South Dakota State University football walk-on, Brandon Peterson took a knee with his teammates during two-a-days to listen to an inspiring speech from his coach. That speech sparked the Alcester, S.D., rancher’s big dream of owning 500 cows. The next spring he purchased five Angus heifers—the foundation for Peterson Angus.

When Peterson graduated in 1999, he had 10 heifers and an eye on returning to his family’s diversified livestock operation. With 150 ewes, 100 commercial cows and a small hog farrowing operation, there wasn’t enough income to support multiple families, so Peterson began a career as a cattle nutritionist.

“The cool thing is I had a passion for genetics, I was growing my herd and I got to see how nutrition played into genetics on a day-to-day basis,” Peterson says.

He met a mentor during that time who allowed him to sell four bulls on the end of the Thousand Oaks Angus sale in 2005. The next year, Peterson cosigned eight bulls to the sale. Unfortunately, it was the last sale because the Thousand Oaks herd was sold for dispersal.

Peterson then partnered with a local producer to co-host their own production sale in 2007. There were 36 bulls offered and 24 replacement heifers. The auction barn seated 400, but only 60 people attended.

“Needless to say, the first sale was a bit of a struggle,” Peterson says. Only seven bulls and 10 heifers were sold.

Peterson started to question whether he had made the right choice to be in the business, but reflected back to the goal he set at football practice. At 40 cows he wasn’t in much debt and prices from 2008 to 2009 offered the opportunity to expand.

“I understood my market,” Peterson says. He bought “nice, papered heifers” for just $300 more than commercial females.

When the cow herd reached 200 head in 2013, Peterson retired from his day job as a nutritionist and now works full-time on his seedstock operation.

Today, Peterson is well on his way to his dream. He owns 300 cows, and is planning to add the final 200 head in the future. Approximately 500 embryos were placed in recipient cows at cooperative herds he works with. This past year, two of Peterson’s bulls were among the top of the Angus breed for registrations.

He suggests young producers define their program by writing a business plan. “Keep the big picture in mind,” he adds.

The Road Less Traveled

Coming from a “family of hippies,” Zach Thode lived in a tent with no running water or electricity until he was 6 years old. His parents raised him in the foothills of Colorado’s Rocky Mountains where he was surrounded by ranches.

“Growing up, I saw these guys ranching around me and I loved what they were doing,” Thode says.

At 8-years-old he regularly hopped off the bus after school and began helping local ranchers to learn about agriculture. That passion led Thode to attend Colorado State University, graduating in 2005 with a degree in agricultural engineering.

He worked at several engineering jobs before settling in Livermore, Colo., where he runs 500 commercial cows and is an engineer for an irrigation company.

For Thode, ranching has been about utilizing opportunities and making them work.

“There is a possibility with every single decision that comes in our life and we have to figure out how to make that possibility work for us,” Thode says.

For example, he trades out hunting or fishing at his ranch for a day’s work, and buys used equipment that can be repaired. “As a young producer we have to leave pride at the door,” Thode says. It shouldn’t be about having the fastest horse or newest pickup, because those things don’t pay you back.

Thode also works as an auction representative with Big Iron and he’s found several opportunities to make purchases worth the money. “We have to make that dollar work for us more than once,” Thode says.

Being aware of cost benefits, Thode raises his own bulls with a small herd of AI’d purebred cows. The cost of a straw of semen is a lot better return on investment compared to buying a bull at auction, he says.

Thode leans on relationships he’s built with fellow producers and neighbors. “To do that you have to be honorable in everything you do,” Thode says. “Our reputation is all we have at the end of the day. We have to keep that where we want it.”

Following in Their Footsteps

Riding feedlot pens in the saddle with her mother, 5-year-old Cassie Lapaseotes caught the cattle feeding bug. Even during college, she came back on summer breaks to help at the family feedlot. One day, she dreamed of returning to manage the operation.

“My dad is very forward thinking. He is probably a step ahead of a lot of people—knowing he needs to change to bring us back in,” she says.

Several events fast-forwarded her arrival to the family business. When her grandfather was diagnosed with lung cancer, succession planning occurred weekly for six months.

Then her mother died, leaving behind a separate ranch and feedlot enterprise. No plan was set, but her mom was in the process of writing down what she wanted. Lapaseotes and her two siblings decided her sister and brother-in-law would manage the ranch and feedlot her mother owned.

Succession planning “is a tough topic to deal with,” she says. “You have to have the conversation.”

Days before she graduated from Colorado State University, her father’s feedlot manager quit—creating an opening for her to step into.

Before taking the reins, she worked every job in the feedlot from scrubbing tanks to making feed calls. “I worked my way to the top,” she says, adding her father wouldn’t “send a duck to eagle school.”

Now, she manages Lapaseotes Feed Yard near Bridgeport, Neb., overseeing six employees: four in the feedlot and two with the cowherd.

“When I come to work every morning, my attitude and my demeanor reflects on everybody I work with,” she says. It can be a heavy weight on her shoulders, but a positive attitude is crucial to a successful business.

Young farmers can learn business skills from the experts at Tomorrow’s Top Producer conference, June 16-17, 2016, in Nashville, Tenn. Register at www.TomorrowsTopProducer.com .

5 Generations Tend Montana Family Ranch

Fri, 13 Nov 2020 02:16:31 GMT

By: Marga Lincoln, Independent Record/Associated Press

Luckily for the Carey family, their ancestor Lillian journeyed to the Boulder Valley, Mont. in 1890 to teach at Basin School.

She liked Montana so much, she talked her family back in Eau Claire, Wisconsin, into moving here.

She would later become superintendent of Jefferson County School.

Fast forward, and the fifth generation of Careys is still ranching in the Boulder Valley, after buying their first land here in 1896, the Independent Record reported .

A recent Monday morning began with sweet rolls and mugs of hot chocolate at the Carey Cattle Co. ranch kitchen table, about 18 miles south of Boulder.

Gathered round were three generations: Tom and Helen Carey Sr.; their son and daughter-in-law Tom and Lorie Carey Jr.; and their son Steven.

Despite see-saw markets, the family has stuck with cattle over the decades. Tom Sr.'s dad, Frank, had also raised sheep in 1928, he said.

But good workers — shepherds and shearers — were hard to find.

And then the market got picky about whether their wool was too fine or too coarse.

“They lost their market after World War II,” said Helen, who first came to the valley as a music teacher and fell in love with both Tom Sr. and cattle ranching.

When Frank died in 1957, Tom Sr. and his brothers, John and Martin, bought the land and split it, leading to several Carey ranches throughout the Boulder Valley.

This family branch — Tom Sr. and Helen — run the Tom Carey Cattle Company, while Tom Jr., Lorie, and their kids Steven and Mariah own the nearby XC Ranch. Altogether there’s about 3,300 acres in just this branch of the Carey family ranch operations and some 350-plus head of beef.

It’s largely a family affair and an innovative one.

Diversifying

It can take more than one income and skill set to keep a ranch thriving.

Helen has launched the Ranch Bed & Breakfast, drawing guests from all over the world.

Lorie works as the Jefferson School District business manager.

And Steven has launched his own disc jockey business.

After sweet rolls, Tom Jr. heads to a pickup, while Steven takes the wheel of a tractor pulling a bale processor.

Red-winged blackbirds trilled from the brush, as Tom Jr. headed into one of the nearby pastures. Across the way, a pair of sandhill cranes raised their heads from picking through the stubble.

In the opposite direction, a herd munched their way through the hay that Steven had just spread.

Their rainbow of cattle ear tags attest to the array of family members in the operation — green for daughter Mariah, purple for Steven, orange for Tom Sr. and Helen, and white for Tom Jr. and Lorie.

“People like it too much for beef to go away,” Tom Jr. said of the future of the Carey Ranch. “I think it will always be here, as long as there is interest in it by the upcoming children.”

Ranching future

And in his case, he and Lorie’s children — Steven and Maria — see their future on the ranch or helping as needed.

Mariah is away at Montana State University earning an accounting degree, but would be back by Friday to help with branding.

Another boost to the ranch is Jefferson County’s agricultural zoning, which keeps their land zoned agricultural and taxed at ag values, rather than rates for subdivided land.

One of Tom Jr.'s tasks Monday morning was starting a hired hand on brushing meadows, with a contraption that Tom had designed and built that breaks up the ground and spreads out manure left by the grazing cattle.

“I always liked cattle,” said Tom Jr. “And I like the mechanical part of farming — the equipment, and running equipment and building things and farming.”

Most of the calving is done with just about 20 cows left, who were held near the calving shed.

That can be a grueling time of year, but this season there were enough people to split the work into three shifts, so everyone could get some sleep.

Helen recalled that years ago it used to be so intense, that they’d sit on the edge of their bed too tired to know if they were coming in or going out, and would have to reach down and touch their boots to see if they were cold and wet.

Innovations and inventions

At heart Tom Jr. is a builder and inventor.

Some of his latest handiwork is a new, more weather secure calving shed he built two years ago and a series of new fences to keep cattle and manure run-off out of the Boulder River.

He also designed a Cow Be-Gone device to keep cattle out of streams, which won a Montana inventors’ contest at the Ag Technology Show in 2003. It’s actually got a number of uses and is sold under several names — Stream Box and Pipeline Box.

Tom Jr. turned that business over to Steven, who builds and ships them all over the country. But that’s more a side business than a major money maker.

Markets have been friendly in recent years, said Tom Jr., but then cattle prices dropped back into the doldrums — while other prices climbed.

“In 1979, I bought an $11,000 pickup,” he said, “and steer calves were $1 a pound. In 2006, I bought a pickup for $44,000 and calves were $1 a pound.”

Last fall, they sold their calves at $2.50 a pound. But now prices have dropped to $1.60 to $1.70 per pound.

While it may not be that easy for making a living, there’s a lot to relish about ranch life.

“It’s nice not having the same job every day,” said Steven, a sentiment they all seem to share.

“And it’s a great place to raise kids,” said Lorie.

She likes that her kids like being outdoors and have avoided some of the pressures of “hanging out” that can happen in town.

There are hard times, she admitted. Times when prices aren’t good, or when there’s not enough rain.

And over the years, they’ve adapted and changed a lot of the way they do things.

From fencing cattle out of the streambed, to changing the way they graze to leave half the grasses for wildlife, to monitoring their rangeland so as not to overgraze it and planting trees as shelter belts for birds and wildlife.

These are just a few of the ways they’ve adapted operations to work with the Natural Resource Conservation Service, said district resource conservationist Nancy Sweeney.

“They’re great people to work with,” added NRCS civil engineer Laurel Ovitt.

For Steven, work gets broken up with “unlimited access to a nice river,” he said.

A lover of hard rock music, one of his favorite times of the year is haying season, even though it’s hectic.

“There’s nothing more relaxing than sitting in a tractor at 2 a.m. and listening to satellite radio,” he said.

And then there’s his pets, a cow named Jewel, who’s now 15 years old, and one named Azuba, who is 4 years old. They both come when he calls and help lead the herd where Steven wants them to go, he said.

And when he can take a break, he’s off to meet Mariah for rock concerts or out to the ski slopes or down to the river.

A bit of a tech and music head, he’s launched a side business — Crank That to 11 sound production.

From doing music for church functions, he’s branched out to barn dances and weddings and being the technical producer for his church, Freshlife Helena.

And while a farm day that follows the seasons can play havoc with socializing, there’s a lot that Steven likes.

It can be so busy he forgets what day of the week it is.

He’s finding his grandfather’s advice to him, holds true: “You might as well throw your watch away. You’re not going to need that.”