Farm families in Washington and Oregon are more optimistic about the future of the economy and their businesses than are family businesses in general, according to a survey by Pacific Family Business Institute.
Almost 75 percent of ag businesses say their sales revenue has increased over the past three years, versus only about 60 percent of businesses in general.
And, 42 percent of ag business owners say they are completely confident in their family’s ability to continue to expand, which is twice the percentage of businesses overall, reports Richard Simmonds, co-director of the Seattle-based institute.
“When we asked, ‘Do you expect your revenues to increase over the next three years?’ 84 percent of ag families said yes and none said no,” he said. “I think that was fascinating.”
A majority of ag businesses expect to hire more full-time employees within the next two years.
The phone survey of 195 family businesses (including 20 ag businesses) shows that most ag businesses are operated by a second-generation family member, whereas businesses in general are more likely to be run by the first generation of a family.
Ag businesses are less likely to have a board of directors or an advisory board. Simmonds said this can present difficulties when the family has to make decisions about which family members can work for the business or how to transition it to the next generation.
“In a lot of cases, you’ve got Mom and Pop, and siblings, and cousins, and they’re trying to talk about transition of the business and who gets to work for it,” he said. “An advisory board can take the emotion out of these decisions and add some professionalism to these sorts of conversations and an outside perspective.”
An advisory board is not a legal entity like the board of directors. It meets three or four times a year to look at the business plan and help deal with family business issues.
The survey showed that almost 80 percent of ag businesses have a written plan to address ownership and succession, which is 20 percent higher than businesses overall.
The Pacific Family Business Institute works to help families increase the odds they will be successful in passing their business from one generation to the next.
It partners with universities, corporate sponsors, and other Pacific Northwest organizations dedicated to the success of family businesses. Complete results of the survey can be found at http://bit.ly/1hSRSIj.•