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October 2013 Archive for Leave a Legacy

RSS By: Kevin Spafford, Legacy Project

Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project.  He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.

Succession is for Good Times and Bad

Oct 21, 2013

Abandoned House   Microsoft clipart photoFrom Legacy Moment (10.18.2013).
Please join us for future issues,
delivered via email each Friday.


 Succession is as much about making something better as it is about dealing with the difficult. Back when I graduated from college, the farm crisis of the 1980s was in full swing. Nobody in or around agriculture thought it was a good idea for a young person to start a career in farming. That was then. Now as we continue to enjoy farming's economic heyday, some want to believe it's never going to end. But we all know it's bound to cycle; everything does.

Are you prepared for when it does? What have you done to make sure you can weather the downturn and survive through an economic winter? If you're one of those people who's convinced that this time it's different, or you're too young to remember, think again. I don't bring this up as a soothsayer of bad news; I merely broach the topic as a point of discussion and a warning to those who might think, 'not here, not now.'

For those who did survive the '80s, what kind of advice will you pass to this current generation of agripreneurs to help them endure? How should they prepare for a downturn? And what kind of opportunities should they anticipate in the adversity of leaner times?

Recently, I received the following comments from a Legacy Moment reader: "Are there many retired farmers who remember the Depression and were born and brought up during that era?"

He then went on to share a story from his past, writing, "I have many memories, being born in 1927. My dad bought our farm in 1912 for $145/acre and almost lost it, as so many did."

He closed by offering this quote from then-Senator Robert Taft Jr. of Ohio: "As agriculture goes, so goes the nation."

So, what are you doing to prepare? Do you disagree with my concerns about the future? Let me know by writing to "Ask Kevin."

 

News & Resources for You:

Goals, action plans, business systems and more: Does your business plan provide a strong blueprint for your farming operation?

Are you growing success?

Plan now to secure your farm for future generations. Visit eLegacyConnect.

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Photo courtesy of USDA NRCS.

Return on Investment

Oct 15, 2013

Fotolia Rolls of HayFrom Legacy Moment (10.11.2013).
Please join us for future issues,
delivered via email each Friday.
 


Years of study, hundreds of columns, a multitude of presentations and numerous consultations all led me to ultimately learn that succession planning is the best way to maximize the return on your investment. As I write this, it seems rather obvious and a bit simplistic. 

But the word succession can bring to mind any number of misunderstandings or difficult and awkward thoughts. Most people associate the planning process with meetings, professional advisers, legal documents and discussions around tax ramifications—ugh!

That's not the right picture. Think about it. You've invested a lifetime of blood, sweat and tears. Most people want to get the most out of their work. They want to be paid well for their effort. They want to improve their financial position. And they want to feel good about their occupation and know they've helped others and made a difference.

We all want that; we all want a good 'return on investment.' For a family business owner, farmer and/or rancher, that return comes in three forms: income, equity and satisfaction. Income and equity are obvious. Driving revenue to some bottom line pays the bills and affords a particular lifestyle. Equity, or value appreciation, from a well-run operation is always a goal. A growing pool of financial assets provides security and opportunity.

Professional satisfaction, on the other hand—the feeling you get from a job well done and a life well lived—is a whole different kind of return. The intrinsic, non-physical return we receive from accomplishment has value. For simplicity, I refer to it as satisfaction. You may call it fulfillment, gratification or happiness.

Succession is about maximizing the return on your investment. A comprehensive plan is designed to help you preserve, promote and pass those accumulated assets—money, property and contentment—to a well-prepared next generation. Which is exactly what most of us are working for.

News & Resources for You:

The satisfaction you derive from your farm is well-expressed by Aesop's classic parable.

The ultimate satisfaction from your work: The next generation yearning to follow in your boot-steps.

Reserve space today for you and your family at the upcoming Legacy Project Workshops in Lincoln, Neb.; Peoria, Ill.; and Indianapolis, Ind. (Be sure to check out our new 201 full-day seminars.)

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"Trouble Is Opportunity in Work Clothes"

Oct 09, 2013

iStock Farmers HandshakeFrom Legacy Moment (10.04.2013).
Please join us for future issues,
delivered via email each Friday.


While reading a news article about the average age of a farmer and the need for new blood ("Aging Farmers Face Uncertain Future" by Sylvia Carignan from Gazette.Net), my mind quickly jumps to several issues and questions. The issues involve symptoms and causes which, if debated, will not bring us a single step closer to solutions. The questions might allow us to examine the problem, if it is one, and then take corrective action.

 

The article says, due to the age, suburban encroachment, regulations, costs and a lack of experienced successors, some families and owners are looking toward uncertain futures. Carignan refers to a Montgomery County business group, Farming at Metro's Edge, that reports, "Attracting new individuals into the farming profession, and training them in ever-changing local, state and federal regulations is a challenge."

Although written to highlight difficulties, the circumstance shouts of overwhelming opportunity. So consider the following questions.

  • Don't aging farmers need a retirement plan (financial security) with a well-prepared next generation (leadership development) to follow in their footsteps –succession planning 101?
  • Although not ideal for "big ag," doesn't a small farm producing local fare, adjacent to a metropolitan area, have some incredible inherent advantages – see local food movement?
  • With or without a struggling economy, isn't there a backlog of well-educated potential farmers looking for opportunities to partner with an experienced farmer for mentoring, career and ownership opportunities - see John Baker at Iowa State University?
  • Who said, "Trouble is only opportunity in work clothes"? (Henry J. Kaiser [1882-1967], the American industrialist who founded Kaiser Aluminum, Kaiser Steel and Kaiser Permanente.)

Although I don't profess to have all the answers, the right questions should help us find solutions. It's up to us to create plans and devise solutions that address real problems. All of these issues—aging, urban encroachment, consumer buying trends, increasing costs and untoward regulation—are expected. Anticipating the expected is relatively simple. What have you done about succession planning? Go to Ask Kevin and let me know.

News & Resources for You: 

Aging Farmers Face Uncertain Future (Sylvia Carignan for Maryland Community News)

The Dell family, also of Maryland, "view farming near a city as an opportunity, not an obstacle."

Is eLegacyConnect right for you? To help you determine your readiness to begin the succession planning process, take a free online assessment.Legacy 20Pioneer 20DuPont 20Attribution 202012

 

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Spectacular and Disastrous History

Oct 02, 2013

iStock Old GrapevinesFrom Legacy Moment (09.27.2013).
Please join us for future issues,
delivered via email each Friday.


During the past couple of weeks, I've been preparing for a presentation at the end of October. Since the event is in California, I want to open with a story from the Golden State. Robert Mondavi was truly a pioneer. He spearheaded the wine movement that put Napa Valley on the map. Before him, this region of oak hills and temperate climate was studded with small ethnic towns with typical family farms. Though grapes were produced in the area, wine was mostly a product for home consumption.

The Mondavis have a spectacular story with a disastrous conclusion. Business success is a hallmark for this family of vintners. But "family" might have been in name only.

Fast forward to 2007, when The House of Mondavi by Julia Flynn Siler was published. That book taught me more about the foibles of family than any single thing I've studied in the past 15 years. In the book, Siler goes to grave lengths to describe this family's history and point to situations that might have torn them apart.

At 52, Robert Mondavi struck out on his own. He started a winery, established a brand and then fashioned the Napa Valley lifestyle experience. He worked hard, building a business from scratch that eventually sold for $1.36 billion. With plenty of family scrapes along the way, he never reconciled with his kids long enough to write a succession plan. Despite plenty of money and lots of incentive, this family couldn't separate themselves from their egos long enough to plan for the future.

In the end, Robert Mondavi's family lost the winery, the label and the dignity of continuing a business founded by one of the greatest entrepreneurs of our time. Robert left a trail of tears, broken dreams and bad feelings. His legacy might be one of dissonance.

It isn't money, assets or possessions that create legacies. People do. What's your legacy, and does it square with what your children will say when you're gone? Is it by design, because of the actions you're taking? Or is it by default, due to the decisions you won't make?

Succession is the act of planning the legacy you intend to leave. Most will be happy to know that their kids are successful, the farm will live on and that they helped by creating the opportunity for future generations.

How do you measure success? Write to Ask Kevin and let me know (your responses will not be published).  

News & Resources for You: 

How the Mondavis Lost an Empire (Wall Street Journal, June 15, 2007)

Seek out the legacy you envision for your family. Start the conversation.

Registration is open now! Sign up for Legacy Project Workshops in Lincoln, Neb.; Peoria, Ill.; and Indianapolis, Ind.

Plan now to secure your farm for future generations.

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