Transcript
Hi, everyone, I am Jessica Jane Spayde. I’m the Food Entrepreneurship Specialists for the Community Food Systems program in the University of Wisconsin – Madison Division of Extension. I am here to talk to you today about partnership conversations for your food or farming business. Here you can see on the screen all the different conversations that we’re going to talk about today, and let’s just jump right into it.
Ambition
The first one is ambition. I want you to talk to any potential business partners or partners that you’re already in business with about your ambition, and I want you to ask about their ambition. And the main question here to ask is how do you hope to grow your business? And what does that look like to you?
Size
The next one is size. So what is the your expectations for the size of your organization and your ideal number of employees? In an ideal world, how many employees do you want to have?
Roles
I also want you to talk about your roles. So you personally, what type of role do you want to have in your business? And think about what is your role now? And how do you hope that changes over time? And some questions to think about here is how long do you hope to work in the company? Is this something you want to do for the rest of your life? Or is it something you hope to do for five years and then sell it? Also, ask yourself, what do you hope to have in 5, 10, 20, 30 years? Do you hope to retire to step back to sell one day?
Ownership Changes
I want you to also think about ownership changes. So it’s important to talk sooner rather than later about how you manage? Imagine ownership will change over the years. So will you bring in new partners? Will you make changes and owner shares? Create subsidiaries? Who owns the company now do you hope? Who do you hope owns the company in three to five years?
Decision-making
There’s also a lot of decisions to make about how you make decisions. So think about how you want to make decisions. What decisions do you trust each other to make independently? Who has the ultimate say if you disagree? And what is your process for handling conflict when it arrives? Because conflict is always going to be part of this.
Money
Also, I want you to think about money. Money can be a touchy subject, I want you to have periodic conversations about your expectations, hopes and fears. What do you hope to make this year? What do you hope to make over the next five years? What do you hope your cash flow, your breakeven point and your profits will be, and be as explicit as possible when talking about money, and share any fears that you might have? Again, expectations, hopes and fears are really important here.
Risk
Think about risk, especially financial risk, but you can think about other types of risk as well personal social risk. But here, the example that I give you is really about financial risk. It’s important that you’re honest with your partners about what happens to you personally, if the business fails. For instance, if I’m getting a second mortgage on my home, and you’re using some money that you inherited, we will likely have very different levels of risk tolerance or risk intolerance. So it’s important to talk about what’s going to happen to you personally, if this business does not go as well as you’d like it to.
Salary
Salary is another really important one. Please have an honest conversation about how much you need to make in order to support yourself and your family, and how much you would like to make to reach your life goals. Yes, I might be able to get by on $30,000 a year. However, I hope to also go on a vacation every year, I hope to save for my kids college fund. These are things that are life goals that I have that I actually need to make probably more than $30,000 a year in order to meet them. So please have a conversation about that. And then that number is going to be different for every person.
Expenses
Business expenses are also important to talk about. So what does the company buy for employees? How often and at what quality. So the example here is if one business partner is using the company money to pay for business training, and new office furniture, and then I’m going without these comforts and opportunities, then it’ll probably create a sense of unfairness. So It’s better to discuss and agree on what the business will and will not pay for in advance or when these conversations arise. It is never too late to have these conversations. It’s also never too early to have these conversations.
Accounting
Accounting is another one have a formal agreement about who manages accounts in your business. Finances? How do you communicate about finances? Is it in writing? Please be in writing a little bit at least. But also make sure you have some verbal conversation or however it is that you process this information the best and be honest about that.
Payroll
Payroll? How do you pay yourself and your employees? How often do you pay yourself and your employees? And how do you hope or expect or maybe even fear that this might change over time?
Communication
Communication? How do you want to communicate? What is the process for communication? The format for communication, though, what language is this going to be in? Language can be literally, you know, English, Spanish, French? Yeah. So make sure you agree on what language it is. But also it can be about formality. So how formal do we want the language to be? Think about ease and difficulty. So if emails are just really, really hard for me to check on a daily basis, but for you, that’s your preferred format. And we’re going into business together, we might need to have a conversation about what the best way to go about our communication might be. It probably would be unfair for you to say I nope, I’m only going to do email, even though I know that’s hard for you. You know, so think about like, well, what’s the maybe you have a daily 10 minute check in where you know, you meet in person, or you meet on Zoom, or on FaceTime. And, you know, check in with each other. But think about communication. And please be honest about what’s easy, and what’s difficult for you, personally, and think about how often you want to communicate.
Collaboration
Collaboration is also really good to talk about with your business partners. Please discuss when and why you want to work independently. And I have some questions for you here that can help with this. But think about what you want to do together? And what do you enjoy doing together? And what do you feel needs to be done together or jointly?
Independence
Also, independence is another important one here. So I am all about collaboration. But there are lots of things that I really want to just do alone. And sometimes my work gets done better when I’m alone. And I know other people are like this. Discuss within your party with your partners when and why we want to work independently. And I recommend you have this conversation by answering these questions. What do you want to do independently? And what do you enjoy doing independently? And what do you feel needs to be done independently?
Working location and environment
Working location is another one. Where do you work? When you’re working independently? Where do you work when you’re working together?
Working environment is also important. What is the ideal system or structure for you to thrive in this role? What is literally the things you need around you? What are the you know, structures that you need? What is the culture? What is the attitude? Thinking about that working environment is really important?
Documentation
Documentation is very important. What do you hope to have documented this time next year, this is just a really good way to start that conversation about documentation. And the examples that I put on here is standard operating procedures, and pictures, those are two of the things that come to mind. For me, pictures are really important to show progress over time. This is what our product looked like at first, this is what our farm looked like at first, this is what it looks like. Now, sometimes we forget to do the before pictures, and then we have the after picture. And we don’t have anything to compare it to. And it might feel like we haven’t made any progress. But if you just have that before picture, you can automatically see oh my gosh, wow, we’ve come a long way here. And also think about just what’s important to you.
Quality expectations
What quality Are you aiming for? And how will you know if you’re reaching it? Have this conversation from your own perspective and ask your business partners? What quality they are aiming for as well and be as specific as possible. This, how do you know if you’re reaching it is the key to this conversation? What does it look like? What does a quality product look like or quality of service look like?
Market
Market so please talk about your market. I’ve seen arguments about this with business owners. Here’s a lot of questions to think about. Where are your customers? Make assumptions explicitly and write them down. Are you cultivating new customers? By maybe educating them? Bringing them into space? Are you enticing them from another business? That’s another way a nicer way to say, Are you stealing another business’s customers? You have to know who your business or your competitors are and where your customers are coming from. Think about what is the geographic scope of your market? What market analysis tools do you actually have access to? And is the market saturated already? And again, it’s key to be able to know who your competitors are.
Community Involvement
Community involvement is the last one that I have for you. It’s important to a lot of business owners that they are actively contributing to the betterment of their local community. So please talk with your business partners about what organizations and causes you hope to support through your business. And be very specific about how you hope to do that. If one business partner thinks that you’re donating 5% of your profits to a local charity, and another business partner thinks that you’re donating two hours a year to volunteer at that charity, that’s a very different financial reality. So please discuss that.
So in summary, these are the things that I want you to talk to any potential or current business partnerships about for your food or farming businesses. Again, I am Jessica Jane spade, and my email addresses on the screen. If you have any questions, you can contact me. Thanks so much. Have a great day.
