Q: My brother isn’t pulling his weight in our informal partnership. That means more work for me. As long as I do nothing, the problem continues. What can I do?

A: Mike Evanish: What’s an informal partnership?
No such thing legally exists. A true legal partnership outlines many requirements and responsibilities. It spells out in written form what’ll be required of everyone, how profits will be shared and how partners will be paid — and what happens when someone isn’t pulling their weight.

Since there’s no legal requirement for him to do anything, he’s currently exceeding what’s legally required. Why are you “in business” with someone so different from you? As with a marriage, a man that likes to rise at dawn should never marry a woman that likes to sleep in until noon. You seem to have a somewhat similar situation.

Call a meeting, perhaps with a mutually trusted mediator. Lay out the problems. If he agrees to shape up, then set a probationary period — one to three months. Then make it known that you’ll be tracking his time and efforts. You must be willing to follow through if he falls back into his historical ways.

If he sees no issue with what he’s doing, you must part company. He should go as quickly as possible, even if it means paying him to leave.

Too many brothers will keep family in a business to “keep the peace.” This seldom works out well. Resentments build and turn into an “I can be just as lazy” attitude. Then it doesn’t take long for the business to fail.

I’ve seen your situation play out many times. Find a mutually trusted adviser to help with your pending “divorce.”

A: George Mueller: Reward according to work done
Friendship, respect, and love between family members, including brothers, are precious and must be preserved if at all possible. But letting the inequality of the partnership continue to fester isn’t a good option.

We’ve had a partnership on our farm since 1991. To reward partners in proportion to their contribution, we require all partners to punch a time clock. Their pay (guaranteed payment) is set at a reasonable hourly rate that they draw each week.

Their share of the partnership’s profits (or loss) is based on their share of the farm’s investment. The profit (or loss) is added to (or subtracted from) their capital account proportional to their share of ownership every Jan. 1.

This way, a partner can take time off to go watch their children’s sporting events at school. They don’t feel guilty about not working since they aren’t “on the clock” taking undeserved wages from the business. While on the clock, they’re expected to be productive. This may help solve the challenge of a brother that desires to put less effort into the business.

A brother that’s not very useful when “punched in” is another story. This is where a good outside consultant might help. Over the years, we’ve occasionally been helped significantly by Farm Credit consultants in business matters. They’re good, know farming well and offer another set of eyes, which is helpful.

A: Glenn Rogers: Time for an honest sit-down
This happens. We all have different interests in life and work. It takes a special bond, a special situation for brothers to have the same vision, similar work dedication and abilities to succeed as a team on a farm or in a company. That’s why we don't see many sibling companies. To succeed, it takes a lot of work and dedication by all parties. 

While over 80% of all U.S. businesses are family-owned, only 30% successfully pass to a second generation. Only 13% go to the third generation.

A business has to evolve to survive. That means everyone involved needs to evolve to make it work.

An excellent operating agreement is a must to make it work.

When family members don’t pull their weight, it may be too late. Or, maybe there are conflicts in goals, values, dedication, health or other family issues. It's time to dedicate some time to having a nice, long discussion with your brother. It needs to be open, honest, and forthcoming. It also needs to be focused on the issues and not end up in a heated discussion.

Perhaps he sees things differently. Maybe there are outside forces interfering with his work. Maybe he’s looking to push things in a different direction.

Maybe part of the problem is you, the owner. We all have faults. Sometimes, we need to "look in the mirror" and change our own ways.

On the other hand, maybe it's time to discuss ways to go in different directions. If that discussion is to take two hours, plan on four hours. Don't cut it short. His side needs to be heard, understood and, in many cases, tried and accepted. If he has a different vision, value that vision. But realize that it might not be the one that provides the success needed for the farm to survive and thrive.

On the other hand, you may need to change. Often it takes outside persons to provide helpful insights into the business. A valued friend with "no skin in the game" may be of assistance. It may be someone from Extension, a fellow businessperson, or someone from a bank or industry.

There are always "two sides to a coin." The trick is to get it to stand on its edge. It's difficult. It takes patience and work. Sometimes it’s better to cut the coin in half, and you will find that even with one-half of the coin, it’s a lot more stable when stood on the cut edge than on edge of a rounded, whole coin.

Got a question? Our experts await!

Our Profit Planner panel would like to hear your question. The panel consists of Michael Evanish, farm business consultant and business services manager of Pennsylvania Farm Bureau’s Members’ Service Corp.; Dale Johnson, Extension farm management specialist at University of Maryland; George Mueller, dairy farmer from Clifton Springs, N.Y.; and Glenn Rogers, University of Vermont Extension professor emeritus and ag consultant.

Send your questions to Profit Planners, American Agriculturist, 5227B Baltimore Pike, Littlestown, PA 17340. Or email them to [email protected]. All are submitted to our panel without identification.