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Copyright © 2001 Eastern Ontario Farmers Forum Inc. All Rights Reserved |
By Brian Little, Royal Bank Agriculture and Agribusiness head
Having made about 1,000 visits to clients’ farms over a 20-year period, I can tell you that finance is not the only issue your banker is thinking about, or even the most important.
The farm itself: In my years of farm calls, I’d always spend a few minutes looking around the yard. Is it well organized and neat? Is the equipment lined up in an orderly fashion? What kind of condition are the buildings in? Are the livestock and crops clean, healthy, and well maintained? Is the machinery in good shape?
The farm couple: Observe how the couple and family get along. Is the spouse involved? Does the spouse appear to be welcome at the table when the banker visits? Are they relaxed or stressed?
The farm’s direction: Do all the farm’s partners have a complete picture of the farm’s finances: total assets, liabilities and equity? Does it appear that each of them is knowledgeable about the business? Are there are any signs of friction between the partners? Do they share information freely? Do they share the same goals for the farm?
The farm as a family: The small things can matter a great deal. I want to know the last time they took a vacation as a family. How do they relax, have fun?
You can have great equity, and terrific cash flow. But in my experience, if the family is under stress, the farm can’t reach its full potential. If there’s a good plan in place and everyone is pulling in the same direction, the farm can really thrive.