What’s the most difficult part of farming? Equipment malfunctions? Weather events? Injury or illness?
The truth is that in many families, transition planning is the biggest challenge of all.
For some, discussing the farm changing hands is taboo. In others, merely broaching the subject incites conflict. Still others find that they just never get around to those talks they need to have.
Protecting Your Legacy
Transition planning is absolutely essential if a family wants to keep the farm in the family. At Encore, we provide assistance including planning, respectful communication, family dynamics and more.
Our goal is to help set up the next generation for success while still respecting the elder generation’s preferences. It’s about finding a balance—and that’s where we excel.
Viewing a farm as a business helps remove some of the sentimentality and sharpens the focus on the nuts and bolts of the transition process. We help through:
- Clarifying roles
- Facilitating effective communication
- Resolving conflict
- Navigating the complexities of shared assets
- Next generation leadership development
- Establishing goals, values, guidelines, governance and accountability
- Creating timelines
- Coordinating advisors such as CPA’s and attorneys
Our goal is to help you create and execute a succession plan. And we’re only finished when your family has passed on your farm and feels proud of your accomplishments.
Insights Succession Planning
No. But there are certain things to keep in mind. Many farms inquire if there is an easy how-to book or checklist that will guarantee a successful family farm transition? No. Well, how about an easy way you can sit down in an afternoon and complete your transition plan? No. The fact is the odds are against any family farm successfully transitioning to the next generation. So, successfully transitioning a family farm is something to be proud of! Every farm is different, and every family is unique. Every family farm has a unique history, culture, family dynamic, and business. Every farm family moves at a different pace. What is a roadblock to one farm is a speedbump for another. In short, there is no playbook, checklist, or how-to manual for...
Too much of a good thing. Posted at farmprogress.com on 5/11/21 The farm owns the homes. The farms buys the owner's personal vehicles. The farm buys gas in the bulk tank and everyone fills up their personal vehicles. The farm owns the lake home. And the boat. At first it was just good tax planning. Fast forward a couple of decades and these perks have multiplied and more generations are involved. Instead of one corporate-owned house, there are three. Instead of a couple of business-owned personal vehicles, there is a whole fleet. Speaking of homes…one of the three sons wants to live in a nice house. Nicer than the farm can afford. Another spouse would like to remodel the old farmhouse but since it is a business asset, this must...
Starting a transition plan isn't easy. It's not only hard to know where to begin, but how do you even begin the conversation? The stakes are high, and many farms don't make a successful farm transition for many reasons. Procrastinating the initial transition conversation is one of them. The younger generation doesn't want to start the conversation because they may appear greedy or ungrateful. The older generation sometimes believes the younger generation needs to "step up" and start the conversation. Unspoken stalemates are often the result. A 4 Step Plan Don't wing it! All too often, this first conversation is ad hoc and off the cuff. I call it a tailgate conversation when the two parties happen to pass each other. What happens is that someone wings it and hopes...
John was ready to start his succession plan. He was 63 and wanted to get the process done quickly. He had a plan. During our first meeting, we discussed history, core values, and culture. John's response? What does this have to do with transferring the farm to my sons? Most family businesses do not successfully transition to the next generation. It is an unfortunate fact, and family farms are no exception. Why don't they make it all the way? There is often unmanaged conflict based on incompatible values and a fuzzy vision of where the farm is headed. As we compare the older generation to the younger generation, we find differences in their core values. Taking the time to understand these differences; understanding the history, values, and culture of the...
Does working with family or transition planning seem too hard? You're not alone. Family dynamics can make it difficult, but harmony is possible with the right plan. Liz shares tips and answers questions on the PDPW Daily Signal. Listen and watch here. It aired March 2nd on PDPW's Dairy Signal Show. Ready to find out more? Give us a call
Lack of a shared vision may be one of the most significant threats to sustaining a family business through multiple generations. Roughly 83% of family farms do NOT make it to the third generation. Developing your own family's vision will greatly increase the odds in your favor. Your family farm is not the same as it was when you started it. It has evolved over time due to financials, demand, land availability, technology, and hard work. You have and will continue to feed the world in a highly competitive environment. When farming was financially sustainable many farms wanted to continue farming the way they were. Why modify if your business was making money? Today that image is different, and farmers are always looking for alternative ways of creating success for...
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...
When times are tough, and everyone is under stress all the imperfections bubble to the surface. The imperfections were there all along but aren’t visible until our backs are against the wall. This is especially true of transition planning. My latest Farm Futures article covers some of the problem areas we often see at farms of all sizes and locations. Click here to download the full article: Deal with transition planning before it's too late Common Problems -Tying compensation to ownership -How the next generation builds equity -Providing for the senior generation income while not harming the farm -Conflict among family The Solution: Don't Procrastinate. Start Working on a plan NOW. We get it, Transition Planning is a Challenge. Here at Encore we believe passing on your farm to the...