5 keys to succession planning

The initial steps in planning for succession in farm families can be difficult. The path is not always direct. And, though the process is based on generating specific results, the exact outcome cannot be known at the outset.

Five years ago, a farm couple contacted me intent on bringing their son into the farming operation as an owner. He had the desire, education and experience. They had a need. The operation was growing, demand was increasing, and a neighbor wanted to sell some land.

“So why not?” Dad asked enthusiastically. Besides, “isn’t that why they call it a family farm?” chimed in Mom, obviously motivated by the thought of them all working together.

After some preliminary work, family meetings and cursory assessments, my team and I advised against the move. We saw things the family chose to ignore. There was a collection of reasons why, but it really came down to a lack of respect and an outsized ego that wouldn’t allow their young prodigy to work with his father.

Though not all the son’s fault, these well-intended parents were willing to overlook the obvious. They wouldn’t acknowledge the undercurrent of animosity. They knew in their hearts that, over time, he would come around and recognize the opportunity.

But that was then. They called recently to confess it wasn’t going to happen. After years of trying, they finally realized the concerns we shared back then were real and, to Dad’s credit, he acknowledged, “Problems don’t just go away….” Beyond recognizing that our systems work, as aging agripreneurs with a growing operation, they wanted to know, “Where do we go from here?”

It’s a process

The initial steps in planning for succession can be difficult. The path is not always direct. And, though the process is based on generating specific results, the exact outcome cannot be known at the outset. You can set specific and measurable goals, but if you don’t have the foundation for a productive relationship, it’s probably not going to work. In spite of evidence to the contrary, this family plowed headlong into fulfilling a want, without first analyzing the undercurrents of an already tense situation.

It’s cliché to dismiss a lesson as hard-learned. However, those oft repeated statements are borne of bad experiences. Succession planning works. The process will help you achieve your goals and allow the farm to continue to endow the generations to come. By design, a viable solution is based on the common goals of the family. The keys to planning success are to:

• Follow a proven planning model and a defined process – this is the road map that leads you on the journey to your goals.

• Acknowledge and overcome the obstacles that all families face – the list is long. But there are solutions if you’re willing to talk about equal versus fair, in-laws, control, conflict, etc.

• Focus on common goals – all agree to first do no harm, make the operation stronger, ensure financial security and prepare the next generation to lead.

• Practice good communication and learn to listen. We’re all good at waiting to talk, but learning to listen, acknowledging others and reacting appropriately is a skill that must be practiced.

• Commit – because it is difficult and the path is not always clear, you must be willing to continue no matter what. With everything on the line, succession may be the most important commitment you’ll make.

Planning is never once and done. For this family, we’ve fortified the operation, created options to begin stepping away, and we’re now in the process of transitioning ownership to loyal employees. Their son will still be their son; he’s stepping back into the corporate world where he belongs. Someday he may inherit the land and collaborate with the tenants as they continue to grow the operation forward. And, due to what his parents started and the nature of succession, he’ll have a renewed appreciation for the farming profession and gratitude for the efforts of those who came before him.

Kevin Spafford and his firm Legacy by Design (Legacy-by-Design.com) exclusively serve the succession planning needs of farmers, ranchers, and agribusiness owners. Reach Kevin at [email protected] or (877) 523-7411.

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