By Angela Lovell
That’s the question brothers Bud and Ron Michel have asked themselves (and each other) many times before making decisions about any major changes to the family businesses – a grain farm and a tarp manufacturing facility they run in Saint Gregor, Saskatchewan.
“My theory was as long as I make more good decisions than bad, we’ll be okay,” Bud says. “Some things didn’t work out, but if you don’t try, you’re going to get nowhere. If the worst thing that could happen is losing your business or your farm, that’s too big a risk.”
In 1969, their father, Walter, decided to take a risk and start a manufacturing business on the family farm. He was tired of struggling to throw and strap down tarps on his grain truck, so he came up with a design for a mechanical system to roll the tarp on and off. Today, Michel’s Industries is housed in a large facility in the town and has grown from a few employees to approximately 90 people, selling its tarps (revised and reinvented many times over the years) across North America, the Netherlands and Australia.
The farm has also grown over the last 50 years into a 5,400-acre operation, providing the inspiration for many of Michel’s Industries’ new products and a place to test them out in real-world conditions.
Two ventures: one family enterprise
Bud and Ron worked in both of the family’s enterprises growing up, providing them with plenty of opportunity to figure out the roles that would suit them best when it was time to take over from their dad.
Bud, who enjoyed product development and dealing with customers, was a natural fit to manage the manufacturing business, and Ron, who had more interest in farming, took over the farm operation.
Although the farm and the business are separate companies, they run under one umbrella and remain very much a family enterprise. Today, three of Bud’s sons work in the business: Brad (44) is the general manager, Trevor (38) is the CFO and Blair (41) supervises the back shop, while Ron’s son, Jeff (38), manages the farm operation alongside his dad.
“I don’t have much to do with the day-to-day running of Michel’s Industries,” Jeff says. “But we have meetings a few times a year to go over sales, new products and share ideas.”
And it goes the same way with the farm side, says Brad. “We don’t have much to do with the farm anymore, and rely on and respect Jeff’s decisions to run it. While we look at it as two separate ventures, we are still working together.”
The two enterprises complement and support each other and both are stronger because of the other.
“Essentially, the business wouldn’t be here if it wasn’t for the farm,” Brad says. “They have always worked well together. We’re always looking for input from the farm; they do a lot of research and development and testing on the farm for the business.”
It also works well on the financial end. “There have been times where money has been lent back and forth [between the companies],” adds Jeff.
Making way for the next generation
With diverse enterprises to consider, the transition to the next generation is more complicated than an average farm succession (which is complex in its own right), but it’s going smoothly because the family took a proactive approach and started early, long before the older generation was even considering retirement.
“We started having meetings before all of us kids got too involved, and made sure everybody was on the same page about who would do what, and how things were going to get split down the road,” Brad says. “Communication really was key. We always had open discussions, we all get along. Everybody does their own job and worries about their own things and it seems to work for us.”
That’s not to say there isn’t overlap, of course. If they need Jeff’s mechanical expertise in the shop, he’s there, and if he needs extra hands at seeding or harvest, they all try to muck in as much as possible, but they’ve learned over the years that sticking to their own roles is the most productive for everyone.
“We’ve found that it’s tough to run the business if you are spending 12 hours a day on the farm during harvest time,” Jeff says.
It’s also taught them the value of building a team to support the operations for the things they can’t do themselves.
“We have good supervisors, and we leave a lot of things up to them,” Brad explains. “They look after the team very well and make our jobs a lot easier.”
That said, labour is one of the biggest, ongoing challenges they face with both the farm and the business.
“Being rural, there are less people to choose from, and there are a couple of potash mines nearby that pull a lot of people out of the workforce too,” Brad says. “And with farming being a seasonal operation, there’s been times where it’s worked out: employees come to the farm in the summer and then come back to the business in the winter; but not always because it’s hard to find people who are willing to do job sharing full time.”
Set for continued, manageable growth
The Michels have always aimed to maintain growth that is slow and manageable, and that will not change in the future as they start to think about structuring for an eventual transition to the fourth generation.
Jeff’s focus for the farm is to maximize production with the equipment they already have.
“Equipment keeps getting bigger, and we want to make sure we’re making the most of that equipment,” Jeff says. “We always have our eyes open to what’s out there, and although I’m not the guy to try new stuff first – I want to wait and see how it works out before I jump into something – I am always looking for something to improve our yields and profitability, whatever it is.”
For Brad, the challenge going forward is what it has always been: developing new product ideas.
“We have got some products that are on the decline now and we won’t be offering for much longer, so we’re always looking for different things to venture into,” he says.
Sometimes other farmers come to them with ideas for products, but more often it’s just a lot of legwork – going to trade shows, listening to their customers and trying to keep ahead of new trends in the industry.
Good examples are the company’s new camera arm for semi-trailers that allows the driver to monitor loading from the cab of the truck, and a wireless electric chute opener for grain trailers. Even today’s electric tarps have gone wireless and make it a lot easier for farmers or commercial haulers to cover their loads.
Bud, now semi-retired, has seen a lot of changes in the industry since his dad first rolled out his mechanical tarp idea. He still keeps his finger on the pulse of the business and has input into the decision-making, but he likes to spend more time on the farm these days, driving the combine or helping Ron and Jeff where he can. It’s cathartic for him to be back in the role he started out in as a young man, but his brain is always turning over ideas for new products for the business. His advice remains: “Go for it.”
“People always have ideas, and I would say don’t be scared to take a calculated chance and try it, but learn from your mistakes,” he says. “If you don’t change, you are going backwards.”
