The other day in one of my face-to-face meetings, I asked a group of highly motivated producers to think about a few of their greatest snafus. While many were listed, the producers admitted some of these mistakes actually ended up teaching them valuable business lessons.
A few producers were quick to point out that they did not develop a board of advisors for their business soon enough. Now, many of you probably think these producers must have been operating large farm or ranch businesses. To the contrary, many were managing midsize family farm businesses.
They indicated that using a board of advisors pushes them to new management levels and forces them to attempt new strategies and actions. One producer stated that the board of advisors made him “walk the talk,” communicate more clearly and hold people associated with the business accountable.
Others indicated that the board of advisors assists them in thinking beyond the local area. The advisors help to bring the global and national economic and business trends into perspective and determine how the trends will influence the business and your community.
The board of advisors also assists in bringing structure and logic to key decisions and discussions. Many producers tend to be too close to decisions to remain objective, so seeking input from advisors with an outside perspective can be valuable. This is especially true when discussing “but what if” scenarios and contingency plans related to risk management.
Now, who and how many should be on this board? I recommend including three to five people, including your lender, a peer business person, a facilitator/coach and at least one person from outside your industry. It is important to meet once a quarter. You should provide as much input to the discussion as the peer advisors, making it an exchange of ideas and information that mutually benefits everyone involved. With technology today, advisors may come from outside your local region to broaden the perspective.
Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at [email protected]