B.C. TRANSITION TOOLKIT FOR NON-FAMILY FARM TRANSFER

STAGE 5: Implement

It’s time to turn vision into reality by handing over farm management tasks and decision-making, executing legal agreements, transferring assets, etc. *Note that implementation will be gradual, and interim planning is necessary to allow for a smooth transition process.

This is where it all starts to feel real! Implementing the transition plan is about taking all the hard work that you’ve put into dreaming, discussing, deciding, and documenting, and putting it into practice on the farm. This is the doing. As in the documentation stage, assistance from your transition team will be crucial to executing any asset transfers.

Remember that while this toolkit is set out in stages, this will probably not be a linear process. For example, if the entering farmer is leasing land as part of the transition, a lease document may need to be drafted and implemented in the early stages, and later, a land or business transfer may occur, as we saw in the story of Claremont Ranch.

CUSTOMER RELATIONSHIPS 

Successful customer relationships are at the heart of successful businesses. Informing customers and nurturing these relationships during the transition period is crucial for a smooth transfer. Your approach to transitioning customer relationships will depend on factors such as the sales channel, people involved, role of relationships within the business model itself, transition timeline, and ways you communicate with customers. 

Many farms sell their products through a variety of sales channels. Indirect sales occur when sales are Business-to-Business (B2B), and the customer is a buyer from a store or distributor, rather than the end consumer. Direct sales channels occur when a farm is selling directly to the person who consumes the products (B2C), and may include Farmers’ Markets, CSAs, farmgate and online sales.

Because a direct market customer base is more likely to be founded on personal relationships between the farmer and consumer, extra care should be taken in the transition process.  

QUESTIONS TO ASK:
  • What are the existing sales channels?
  • How does the farm market to and communicate with the customer base for each sales channel?
  • Who needs to be engaged during a transition? 

STEP 1: GATHER CUSTOMER INFORMATION

The goal here is to understand the customer experience. Having a very good understanding of who your customers are, how they were acquired and their relationship to the current farmer will ease the transition process and hopefully help to mitigate any losses through this potential shift in customer base. The entering farmer must get this information from the current farmer – and it likely lives in the current farmer’s head, rather than a spreadsheet with customer segments. 

The entering farmer should plan to do the heavy lifting by asking probing questions and taking notes. The current farmer can guide the entering farmer with information such as “This is what I grow and why, this is who buys my food, what they spend, and what they eat.” The current farmer has a lot of wisdom to share, and sometimes may not even realize how valuable a certain tidbit (e.g. the third weekend of August is always the busiest) will be to the entering farmer’s success.

STEP 2: BUILD RELATIONSHIPS AND SET EXPECTATIONS

Because personal relationships are so important to many small-scale farms, a transition plan should make use of every opportunity to build strong relationships between the entering farmer and the farm’s customers. That may mean taking the entering farmer along for deliveries to restaurants each week, co-hosting CSA pick up days or working markets together. Ensuring that the entering farmer’s name and face appear alongside the current farmer’s wherever possible, such as on marketing materials, and through personal introductions is advantageous when transitioning a customer base to a new farmer. 

In-person interaction is a great way to build relationships, but it can be hard to keep every single customer informed one on one. Using channels such as newsletters and social media will help keep a wider range of customers engaged in your transition story. 

Farmers’ Markets

Farmers’ Markets are an important sales channel for many small scale, diversified farms. In addition to transitioning the relationship between the entering farmers and consumers, the current farmer must also transition the relationship with the farmers’ market itself. A proactive approach to bridging the relationship with the entering farmer and the market is key to a successful transition. 

Once there is a clear transition plan for the entering farmer to be involved at the market stall, and eventually take over the farm business entirely, the current farmer should talk to the market manager. It’s important to communicate timelines clearly. If, for example, the current farmer and the entering farmer plan to work alongside each other at the markets for a season, and the current farmer will transition out of the farm at the end of the year, conversations with the market manager should start prior to that market season. This way, you can involve the market in your discussions to increase the possibility that the entering farmer will be able to continue on as a vendor.

Generally, as long as a farm business name stays the same, a new business owner should not affect whether an established farm would continue on as a vendor; however, if the entering farmer is considering a name change, that could have an impact.

MINI CASE STORY: TRANSITIONING A CUSTOMER BASE – DEERFOOT FARM

Deerfoot Farm is a 56-acre farm in the North Okanagan that sells vegetables and pasture-raised chickens at local Farmers’ Markets. When Tessa began to lease land on Deerfoot’s property, she was also offered the use of the chicken barn and a list of customers. Upon taking over the chicken operation, Tessa wanted to make a few changes to the business operations; for example, she switched the chickens over to certified organic feed and pasture-raised them, which increased the price by $2/lb. 

While the current farmer-landholders were concerned that their loyal customers would no longer be able to afford their chickens, Tessa was willing to take the risk. She knew she may lose some customers due to the price increase resulting from an increase in her cost of production. To counteract this risk, Tessa did her own marketing and expanded her activities at other places in order to get new customers that would pay that price point. For example, she found that her local CrossFit Gym was a great place to acquire new customers! 

If there is a change happening, there will be change in how things are marketed; some customers will stay, some will fall off and some new ones will be found. Being clear and up-front about price increases is important. Similarly, Tessa found that communication was key to transitioning into Deerfoot’s stall at the local Farmers’ Market. It was important to ask for input from the Market Board on how best to proceed, being respectful of the old ways of doing things and clear about the farm’s current and future plans.

Deerfoot Farm’s market stand. Photo credit: Tessa Wetherill

Want to learn more about transitioning direct sales channels? Read the full “Transitioning Customer Relationships” article by Columbia Basin Land Matcher Hailey on the YA blog.

RELATED TOOL:

CALCULATING DISTRIBUTION OF LABOUR & PROFIT PDF | Word document

 

Continue to STAGE 6: Maintain Your Transition
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