Joint business agreements, whether a general partnership, an LLC, or a multi-generational business, all require two or more independently minded farmers to work together. A farmer recently told me that partnerships were “the darndest ship you’ll ever ride on.” I like this quote because it reminds us that partnerships and other jointly held businesses can sail through both smooth and rough “seas.” If you are in the early stages of forming a joint business arrangement, what should you consider before signing the paperwork?
Consideration #1: Is a joint business arrangement the best solution?
In general, a joint business arrangement increases the likelihood of success when potential partners understand the problem for which the arrangement is seen as a possible solution. Sometimes a simple contract, such as a lease agreement, may be the best solution.
Consideration #2: Choosing the right business partners
Even if you are contracting with another farm, your business arrangement will need to rely on good communication and trust. Enforcing a contract in court should be a last resort. Keep in mind the traits you are looking for in a business partner, and make your decision rationally, based on facts, rather than making a hurried decision.
Consideration #3: Pre-evaluate yourself and your prospective business partners
Personal relationships are significant to the success of joint business arrangements. The following questions will help you and your potential partners identify and discuss strengths, weaknesses, and expectations before creating any new business arrangement.
- Do you prefer to work and make decisions with someone else or work alone?
- Are you open to change, or would you prefer to “do it like you always have done it?”
- Can you make suggestions and recommendations instead of giving orders?
- Are you willing to listen to and accept ideas and suggestions from others with less experience, less training, or less education? This is especially important when working with the next generation.
- Are you willing to give others credit for things well done and accept responsibility for your own mistakes?
- Can you discuss business issues with your potential business partner without getting angry?
- Are you willing to attend regular business meetings with your partners?
- Are you willing to develop a written business agreement and update it when necessary?
Consideration #4: Your Land Grant University Cooperative Extension Service
If you need personal assistance, Cooperative Extension agricultural agents have experience helping farmers discuss the topics mentioned above and can serve as neutral, third-party facilitators in the business agreement process. If you would like to learn more about doing business together and the numerous options available, please visit https://coopcentersc.org/existing-business/ to download a free “Doing Business Together” workbook.
For existing businesses, Cooperative Extension has resources and referrals to help resolve conflicts. The current economic headwinds are making for difficult financial times, straining business relationships. It is an important time to work together and keep that business partner “ship” sailing through choppy seas.
Richards, Steven. “Before Doing Business Together.” Southern Ag Today 6(12.1). March 16, 2026. Permalink
