Agriculture

How to Choose an Advisor

 Today's farms are complicated and profit margins are often narrow.  It is impossible to be an expert in everything, so  farmers are increasingly outsourcing their management by hiring advisors for things such as agronomy, marketing and transition planning. This is in addition to more traditional management outsourcing like accounting and legal advice. 

Choosing an advisor for the farm can be a difficult and stressful task.  Choosing the wrong advisor and getting bad advice can be a costly waste of time.  Here are some points to consider when choosing an advisor who will work effectively for you:
1.     Identify your need.  Start with writing down what you need done and be specific.  Also write down what results you would like to see, in addition to the timeline for completion, your budget, any concerns and the scope of the project.
2.     Actively search for an advisor.  Contact other farmers and ask who they use or have used for advisors.  Advertise in the local paper.  Contact advisors that you know and see if they are interested in doing the work you require.  If the type of advisor you are looking for is governed by a professional association, contact that association for a list of its members.
3.     Start the selection process for your advisor.  Much like conducting a job interview or purchasing farm equipment, it is important to research and review your options.  You can evaluate the advisor’s expertise by reviewing their education, work experience and industry knowledge.  Don’t be afraid to ask for a resume and examples of their work.  Be sure to meet with the candidate face to face, and ask prepared questions while taking notes.  Ask for references and check those references with probing questions.  Make sure the advisor has errors and omissions insurance, and third party liability insurance.  Negotiate with your preferred candidate regarding the work you want done.  If you can’t come to terms with the preferred candidate, start negotiating with the next candidate who meets your requirements.
4.     Determine compensation for the advisor.  As part of your negotiations, determine the nature of the compensation the advisor is seeking. Will they charge you by the hour, by the acre, or will it be a lump sum payment?  Will the compensation paid be partly contingency based (a certain outcome is required for payment) and will there be retainer fees (payments required to ensure the services of an advisor before the work is started)?  Also important to know is when the payments are required and if there will be any holdbacks on payments until a portion or all of the work is completed.  Ask for an estimate for the cost of your work. Then compare the estimate with your budget to make sure you have adequate funds to complete the task.  Most importantly, have this all stated in writing in a contract or an engagement letter.
5.     Create a written advisor contract or engagement letter.  With your advisor, create a contract or engagement letter that describes the scope of work, along with the objectives for the project.  It is important that you outline your expectations of the consultant, and a list of deliverables.  Any assumptions need to be listed, along with compensation and timelines for the work.  As the client, your expectations will also be stated, so make sure these are accurate and attainable.  Make sure termination clauses are adequate and ensure the contract or engagement letter is clear regarding penalties for termination.
6.     Measure the performance of the advisor.  Conduct a periodic review of the work your advisor is performing to ensure you are getting the work done according to the written agreement.  If there are any problems or if the project is off track, be sure to address these deficiencies with your advisor sooner rather than later.  Finally, if you can’t seek a resolution to correct any problems, you may have to release the advisor from the contract or  or engagement letter.  Just make sure you do so in the manner described in the your written agreement and keep any financial penalties in mind.
By following the steps listed above, you can set yourself up for the best chance of success in choosing your next advisor for your farm.