The Value of a Farm Family (far more than dollars and cents)
For Mark, the middle generation son in this farming family, it was a dubious beginning for what should’ve been a major step on the road to a more certain future. As he put it, “All of us want the operation to continue; we just don’t know how to start or who can help.” It wasn’t the first time I’d heard hopelessness about the difficulties of initiating the succession planning process.
When polled, many families attending my workshops claim to have had a family meeting to discuss succession. Yet, for many, that first meeting is also the last. Without the right foundation, discussion can end in disappointment and disenchantment. Even the most well-intended families often get sidetracked in petty disputes and personality conflicts.
Everything about the succession process is steeped in emotion – from creating a smooth ownership transition to preparing the next generation to lead, from eliminating the estate tax to planning for equitable distributions and from ensuring financial security to insuring for contingencies.
As a confession to his family’s frustration, Mark explained that, over the years, they had talked with various lawyers, accountants, and financial planners about their succession planning goals. “But we’ve never gotten any concrete direction; everything just seems to stall out.” He went on to exclaim, “It’s hard to find any help that isn’t as confused as we are!”
Mark and his family are not alone. Based on our research, fewer than 5% of American farm families have a written succession plan that includes provisions for the ownership transition, financial security, leadership development, the estate tax, and annual reviews.
A comprehensive plan must be based on the shared common goals of the family. No matter which generation a person represents and regardless of gender or role in the operation, each can cite attributes of succession that interest them. A family can always agree on goals that improve the integrity of the operation, enhance financial security and prepare the next generation to lead.
With only a bit of prompting on my part, Mark and his family knew exactly what they wanted to accomplish. Mark took a deep breath and detailed their list of succession planning objectives, all of which were reasonable, easily understood and very achievable. For this family, as with so many, the farm is their life’s work and comprises most of the family’s wealth. It represents everything they stand for, and must become a testament to their steadfastness and an opportunity for the next generation.
Although the family knew what they wanted to achieve and were prepared to have a formative discussion, their intentions stalled out due to a long list of other, more ‘urgent’ obligations. The difference with Mark and his family is that they didn’t give up in frustration; they’ve now achieved the goals they set out to accomplish for multigenerational success. Better yet, they continue to review and adapt annually, updating their plan to provide for opportunities in the growing operation.
Families tell us that the act of commitment changes everything. Communication among family members improves, attitudes solidify, and working together becomes more satisfying. And each person in the family begins to realize the value in being a farming family is not measured merely in dollars and cents.
What about you? Have you taken this important step on the road to achieving your heartfelt goals? It really doesn’t matter who brings it up. If you’re dependent on the farm, it’s your responsibility to initiate the process.
Make time today and commit to succession and creating a lasting legacy for you and your family.
Succession is more than deliverables. It is people, families and communities. Succession is heritage and values. It’s learning from the past to build a better future! It is the path to a stronger business today and tomorrow.
Related tool: Each decision to do something is a decision not to do something else. Every choice has consequences that ostensibly can affect you, your family, or your operation for years to come. To survive through multiple generations, your farm or agribusiness must be built on a plan that is aligned with a clear and motivating vision. Our tool, Prioritizing Your Succession Planning, can help you take those critical first steps.
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Kevin Spafford is the founder of eLegacyConnect which provides succession solutions for farm families. Members of National Sorghum Producers receive a discount for full access to eLegacyConnect (membership code sorghumgrower).
eLegacyConnect.com Info@eLegacyConnect.com 877.523.7411