And the Failure when there is none.
Bob, a dairy farmer college of mine, operated a successful 600 cow dairy. Like most of us, he thought he had a lot more time left in this world. Unfortunately, Bob was diagnosed with cancer on a Monday and died just two weeks later. The biggest business obstacle to his wife and daughter was the absence of the paperwork that allowed his business to continue.
As leaders of successful dairy operations, you understand the importance of developing and using documents. My guess is your farm office is full of manure maps, dairy comp sheets, milking protocols, and employee handbooks, to name a few.
Those tools help you navigate the daily events, but what about the rare occasions that affect your health or even life? What tools are in place to make certain the business runs as usual without key people?
The first part of that plan should be strong communication with the key players regarding how to continue operating the business if an owner/leader is incapacitated or deceased. Essentially, how will they take over?
You have spent too long building your business to have it fall apart simply because you didn’t take the time to create the documents. The documents you need for a smooth transition that also shares the information with the key players.
The first focus should always be continuing daily farm operations. The question needs answered, "Who has the authority to do what?”
Document and Share the Following Information
- Name trustees or directors: Make it clear who should do what if you’re not there.
- Power of Attorney- Create this legal document naming someone to be in charge of making decisions on your behalf if you can’t due to disability or illness.
- Health care directive
- Log-in info for banking and software access. Ensure someone can write checks for bill paying.
- Contact info for your attorney, banker, commodity broker, etc.
- Federal ID numbers for the business
- Location of property deeds, vehicle titles, birth and marriage certificates
- Information about the financial structure and debt
This is a "simple" checklist. Business owners must also consider a sound succession and transition plan to prepare for the future. Planning today for a catastrophic event will smooth the transition if it’s needed.
When a business owner prepares and shares the necessary documents, there is peace of mind. The dairy will continue without a pause.
Bob’s widow and daughter are getting by (barely) without planning and documents. But it’s been tough. Bob was a good guy, and I believe that he would do it differently if he had another chance.