Legacy by Design LLC.
Cultivating Multigenerational Success in the Agricultural Community
Call Us Toll Free: (877) 523-7411
Blog
Communication Can Sustain Family Farms
How will your family transition the farm, ranch, or agribusiness to the next generation? Is each generation openly communicating about how to best work together? "Getting started to think about these questions is the most important step," according to John Becker of Penn State's College of Agricultural Sciences. In "Intergenerational Communication Can Sustain Small Family Farms Through Succession", Becker goes on to note: "Inadequate farm succession planning ...
Succession Planning: Communication + Decisions
"Paying attention to both family and business concerns is not easy. Family rules and norms about what to talk about and what to keep quiet may limit discussion of important issue. As you begin to discuss family and business concerns, you may need to use a non-family member to help you sort through the questions that come up. But, families tend to be closed groups - it's in their nature. This can affect the family's willingness to call on outside resources for help. If you're thinkin...
Timelines and Open Lines
"Develop timelines for a sequential transfer of the business that allows the younger generation to gradually build equity in the business, receive managerial training and assume managerial roles before enacting the formal transfer. Maintain open lines of communication to help families develop an integrated vision for the future of the farm (and family) that accommodates individuals' concerns and experiences. This is particularly important during times of challenging business conditions...
Triggering Farm/Ranch Transition
"The first step is to attempt to get the family to recognize that potentially serious problems may be related to business transition... the typical transition occurs after a shock to the family or business... Waiting until the occurrence of this trigger typically leads to emotional decisions that may spell financial disaster for the family." "The Challenge of Family Business Transition" Dr. David Kohl and Alex White (Virginia Tech)
Growing Your Farm
"Vertical integration may present a viable solution for growing a business. Rather than fighting the market, farmers must create an integrated means to the market by controlling more of the steps from farm gate to dinner plate. Farmers can develop a means of integration by, for example, purchasing a subsidiary, establishing a contractual relationship with an outsource company, or forming a strategic alliance. Combining resources with other farmers may offer an opportunity to modify yo...
Communicate your Succession Objectives
According to a 2005 survey conducted by the North Carolina Farm Transition Network, farmers do not talk with their families. Consider these results from the 2,099 survey respondents: ~ 67% have not discussed retirement plans with anyone ~ 43% do not have an estate plan ~ 42% do not have a will ~ 75% have not identified a farm successor ~ Of those who have named a successor, 50% of the offspring candidates currently work off the farm "Good communication is as stimulating as...
Planning Ahead
"Because of the complexity of farm transfers, they require considerable thought, discussion, and planning beforehand... Transferring the farm can be such an emotional topic for some farmers that they delay talking about it with their families until retirement is upon them, in which case the transfer can become a stressful and hurried affair. If you start to talk to your family about the transfer early, it will eventually become a common topic of discussion and you will be able to get th...
Considering a Merger?
"A (permanent) merger is not the solution to a temporary problem. A merger must be based on real and perceived expectations of gain. Be diligent in asking the tough questions. 'Extreme reluctance' may be the best frame of reference to assume before you agree to surrender your independence. - Weigh the net monetary value. As in wood working - measure twice, cut once. - Evaluate the gain in business acumen against the loss of free rein. - Calculate the increase in depth and breadth...
Advice for the College-Bound
Are you or yours in the throes of college decisions? "This is an excellent time for you to do some soul searching and decide what you want in a career. Make sure that the opportunity on the farm provides the experience necessary to achieve your long-term goals. Your expectations will be measured against the job [you anticipate]. In addition you should consider designing a leadership development plan. College is only a basic foundation for the lifetime of learning that will be necess...
Communication about the Farm Transfer
As you consider the best options for transferring your farm or agribusiness, it may be helpful to read through some communication suggestions offered by the Manitoba Agriculture, Food and Rural Initiatives. The Farm Transfer: Talking and Planning with Your Family prepared by Jill Falloon and Donna Hastings begins, "One of the most critical issues in the life of a farm business is the preparation for the transfer of the farm to the next generation -- a process that is often hard to thin...
Avoidance is not the best strategy.
An article called simply "Succession Planning" was presented in Case IH's Canadian Farming back in 2004, and remains one of best quick overviews we've seen on the topic. The piece concludes with 15 key points to "Jump-Start Your Farm Succession Planning", as proposed by Peter Coughler of Ontario's Ministry of Agriculture, Food and Rural Affairs. The points include: "Learn as much as you can about farm succession and become an active participant in the planni...
Planning for Ownership Succession
A few effective quotes from Planning for Ownership Succession, prepared by the Ohio Employee Ownership Center on the Kent State University website. "Succession planning can be the crowning achievement of a productive career, or the Achilles heel undermining a lifetime of hard work. Succession Planning...requires excellent communication, a deliberate process, and openness to objective advice." "The earlier a business owner begins planning, the more likely it is that t...
Farm Succession: The Best Case Scenario
"It's people who don't think succession is a big deal and haven't worried about it who so often find themselves dealing with some major issues they never expected," according to Melissa Dumont. Dumont is the conference organizer of the International Farm Succession Conference. It's Never Easy: Even the Best Struggle with Transfer Issues (by Glenn Cheater on FarmCentre.com, October 2007) tells the story of one farm family who hosted conference attendees during this year's event. ...
More than one 'heir to the throne'?
An Eccentric Succession by Brett Anderson (Worth Magazine, December 2004) provides a good summary of one family's succession planning discussions. With three capable sons in the second generation, the Cakebread family (Cakebread Cellars) explains the process they went through to reach their leadership decisions. As Bruce Cakebread notes in the feature: "A family business transitioning from first to second generation is one issue. The percentage of failures is huge at that stage of a b...
Communicating about the Future of the Farm
We grow up believing that it is disrespectful to ask parents certain 'personal' questions - particularly issues related to income or business. Of particular taboo would be questions regarding inheritance or plans for estate distribution. While it typically is not appropriate to meddle in these issues, when an adult child is dependent the stability of a family business, he or she has a vested interest in understanding what you have in mind for the future. As a parent of the family you may f...
Your Farm Mission and Vision...
Planning for Farm Business Transition/Succession by Rodney Jones of Kansas State University (for the Four State Beef Conference) is an excellent paper on the many elements involved in succession. It's packed with a lot of good information - the paper will likely keep this 'Coffee Shop' buzzing through several posts. Jones emphasizes how important it is for the family business to establish both a Vision Statement and a Mission Statement. Dr. Jones describes a Vision Statement as a "uni...
Four Generations and Counting
Succession Plan Keeps Farm in Family's Hands by Hannah Fletcher in Iowa Farmer Today (01/03/2007) relates the scenario of one family who has taken a proactive approach to succession planning decisions. John Baker (administrator for the Beginning Farmers Center in Ames, IA) serves as a resource for this feature and cites the following hurdles to successful succession planning: " - Urgency often takes precedence... farmers' planning horizon does not typically extend more ...
The Next Generation of Farmers
Our July 18, 2007 entry quoted a Fresno Bee story, "Growing without succeeding" by Dennis Pollock. The same article outlines some interesting (and hopeful) statistics: "There are signs that interest in farming hasn't waned. The ranks of 4-H and Future Farmers of America are increasing in California. Today, there are 130,000 members of 4-H clubs, compared with 62,000 20 years ago. Today, there are 65,000 FFA members in the state. Ten years ago, the total was 50,000. Twent...
"Growing without succeeding"
Growing without succeeding by Dennis Pollock (Fresno Bee - July 15, 2007) tells an increasingly familiar tale: "The younger generation is having difficulty taking the reins from aging farmers." As Pollock says, "Farmers sticking around longer sometimes means deferred dreams for their would-be replacements. In some cases, there's just not enough profit from the family farm to sustain partners... It means tough choices for family members sorting out how to keep an enterprise go...
Maintaining Momentum
Succession planning is about dismounting from this horse to put on a younger rider, while maintaining the momentum of a progressive operation. Photo courtesy of Oklahoma Farm Bureau
Family Businesses Thrive on Change
Keeping the Business in the Family, by Dr. Mark T. Green (Director of Austin Family Business Program at Oregon State University) represents just one of the resources available from the valuable OSU program. Dr. Green states, "If your business is in the first or second generation, you've got some work to do if you want to create a legacy for your grandchildren." He also notes that, "Savvy managers don't plan to survive. They plan to thrive on change." The AFBP Resources...
Strategy for Farm and Ranch Succession Planning
Oregon State University / Washington State University Extensions offer some great information in their "Farm and Ranch Survival Kit" publications. Issue 4, "Working Together to Create a Hopeful Future for Family Farms" includes suggestions on "What to Think About Before Joining Your Family Business", "Ten Rules of Transition Management", and more. As stated in the opening sidebar, "The authors in this issue stress open communication between gener...
Succession Planning to Preserve 300 Years of Family Business
"Three Hundred Years of Succession" on the Harvard Business School website makes some excellent points about our everchanging family business climate. In 1698, the Berry family established a business which became a premier international wine merchant. Throughout eight generations of family leadership, typically the eldest son would take the reins. Today, however, "The focus is on the health of the business, how the family fits into the company, and the abilities of each fami...
Succession Success
In his article, "Succession Success" in BusinessWeek (April 23, 2007), Timothy G. Habbershon makes excellent points about open communication among family members. Habbershon, who is director of the Institute for Family Enterprising at the Arthur M. Blank Center for Entrepreneurship at Babson College, advocates for looking at the big picture, including all involved family members in the conversation, and not shying away from a little "normal and healthy" conflict. Habbers...
AFBF President Stallman Identifies Priorities
Recommended reading: "Can't is not in Young Farmers' Vocabulary" (AFBF website, April 2007) ___________________________________________________________ In response to this article, an open letter to Bob Stallman, President of the American Farm Bureau Federation: "Dear Bob: Thank you for reminding our constituents that farming is challenged by bigger threats than the farm bill, environmental legislation, and corn production (The Ag Agenda April 2007). Agriculture can...
When the family works off the farm
Increasingly, we encounter scenarios in which a loyal employee is the strong successor candidate... particulary when the owners' children have established careers off the farm. Grooming a non-family member to take the reins of the farm or agribusiness may offer some advantages: A non-family candidate understands that employment is based upon performance, attitude, and aptitude. An outside candidate may be selected for their qualifications, rather than as a genetic righ...
A Prepared Successor is Key to Agribusiness Success
By all accounts, agribusiness is big business. Yet the emotional issues of family seem to confound many of the decisions made by the owners. One of the more delicate choices is the selection of your most qualified successor. Will you transition to a family member, to a trusted employee, or to a promising outside candidate? Regardless of your choice, a successor will need years of guidance to master the rudiments and responsibilities of management. To become an excellent manager i...