The response to my January article about business blunders has been strong and positive. I am glad my experiences are resonating with and helping the grazing community. I have these articles planned through July, so stay tuned for plenty more tales from a recovering business bonehead.
This month, lets talk Trust.
Check References
If you are considering working with someone who is a stranger to you, do not rely on your own judgements about their trustworthiness or suitability as a business associate. Ask around town or within your industry about their reputation. This is especially important if you are new to the area, new to the industry, or if they don’t live nearby. Farming communities tend to be tight-knit with a lot of gossip always circulating. This can open up tons of opportunities for people with good reputations. It’s very bad for people with bad ones.
When I first relocated an hour south of my hometown to grow my business, I got into a deal with someone who was a complete stranger to me. After I got burned, it seemed like the whole town came out of the woodwork with similar stories about what a scam artist that person is. I wish I had just stopped down to the local diner for coffee before signing that deal and asked “Hey, does anybody in here know so-and-so? Is he a good person to do business with?” That one simple question would have saved me so much wasted work, money and stress!
You may consider running a background check on potential partners in addition to asking around about them. I know of a cattle owner who got taken for six figures by a dishonest custom grazier. The grazier turned out to have a criminal history that predated their deal. A background check might have prevented that loss. If you are trusting a large asset like your cowherd to someone, you can also require them to get bonded. This is an extra step for your protection above and beyond background checks and insurance. It goes without saying that you, everything you touch and every inch of ground you walk on should be insured up to your neck!
No one lives or farms in a vacuum. The sooner you learn to harness the connections and abilities of other people, the faster and greater your success will be. The politically correct term for this phenomenon is “networking.” The politically incorrect explanation is that the world runs on connections more than it does on value and skill. As a loner by nature, small talk is tedious to me. But the long-term rewards that come from making casual contacts at pasture walks are staggering. I met my current custom grazing herd owner at the 2014 Winter Greenup Conference in Albany.
Contracts Are King
The days of old-fashioned handshake deals are over, for better or worse. I realize now that I have had a big problem in the past with giving strangers too much credit and trusting people way too much. Even if no dishonesty takes place, it’s very easy for people on both sides of a verbal agreement to forget or misinterpret what is said. I will never do anything without a written contract ever again! I have them for all of my land leases, custom grazing deals, livestock sales, meat sales and cattle trucking jobs. I may soon make them a requirement for first dates and family functions!
In this day and age, I believe that without exception all honest people will agree to some form of written terms. If someone refuses to sign some type of written statement, they are probably trying to leave themselves an easy way out. I see this as a sign of disrespect; that they do not take you and your business seriously and do not place importance on fairness. Make sure to be very clear in your written contract about each party’s responsibilities and expectations. What you take for granted, your landowner may not. Mismatched recollections and an oversimplified, vague contract caused the failure of my second original lease deal.
Keep all text message and e-mail records in which you discuss who is going to do what when. They can help prop up a weak contract if you ever have to prove what happened or who said what. If I had been able to produce these records, it would have quickly solved my lease dispute. You can never document too much. Make sure to back up your records and documentation, to avoid the risk of computer crashes or accidental deletion.
Thanks for this piece, Meg. As someone who has had to learn the hard way about bone-headedness and trust, I have a suggestion: The Sociopath Next Door by Martha Stout is a short, easy read that provides great insight into the 4% of us who have no conscience. These folks are especially dangerous to young entrepreneurs. 4% doesn’t sound like much, until you realize that it’s one out of each twenty-five people you meet.
This is awesome! Great advice for beginning and experienced growers alike…