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Is Your Farm Family First or Business First?

Have you ever thought about what kind of business approach your farm operation has adopted? Does the farm place emphasis on “Family First” or “Business First”? It is important that the members of the family farm understand the difference between the two approaches in order develop a structure that is effective in meeting the farm’s goals while being respectful of the family’s values and helping to identify future problems before they arise.

The differences between “Family First” and “Business First” approaches are very distinct and most operations float between the two in different areas:

AreaFamily FirstBusiness First
EmploymentEveryone is welcomeBusiness needs and individual qualifications
CompensationEqual or close for everyoneContribution- and performance-based
PerksEveryone benefitsBased on job and compensation agreement
AuthorityMom & DadOrganization chart with business hierarchy
AccountabilityExtremes (little to lots)Management right to fire
ShareholdersEqualBusiness strategy
Governance/Decision-MakingFamily concensusBoard or management team


The response from family members about what type of farm business they are in can often vary depending on age, gender, level of education, and length of time working on the farm or not on the farm. It is important that farm families identify and decide how to deal with these areas. Rather than use on or the other approach, it is generally best to develop a hybrid approach called Family Enterprise, which may look like the following:

AreaFamily Enterprise
EmploymentOpportunities created depending on needs; education and experience are planned
CompensationCloser alignment with responsibilities; may enable share purchase one day
PerksEarned based on family employment policy
AuthorityEqual roles for those with high degree of competency
ShareholdersEducation for future shareholders; opportunity for passive ownership
Governance/Decision-MakingFamily and outside board, family council


Each farm and family are unique, so each farm operation will have a different approach. The Agriculture Advisors at Avail CPA can assist your farm operation in the development of guidelines and principals for how to operate in your unique structure while identifying future problems before they arise and facilitate strategy sessions to help tackle tough issues already existing in your family farm business. 


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