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December 2009 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.

A Succession Plan to Achieve Your Intentions

Dec 31, 2009

As you cast your resolutions for 2010, use the motivation of the New Year and commit to take the next step (or the first step) in the succession planning process. We all know that dreams can come true, but the inspiration must be followed by commitment and supported by perspiration…

 
To thrive across the generations, a business must: 
  • Build upon and abide by a plan for success
  • Be dynamic, motivating, and progressive in nature 
  • Be flexible enough to adjust to changing conditions, shifting resources, variations in consumption, regulative initiatives, and evolving capabilities 

Start with a complete business plan. Your plan should include:
 
1.    Vision and mission statements
2.    Company history and guiding values
3.Analysis of strengths, weaknesses, opportunities, and competition
4.    Clearly defined goals and objectives
5.    Action plans to support each goal
6.    Budget to project income and expenses
7.    Review and evaluation process
 
 
I wish you all the best in the year ahead! 
Please don’t hesitate to
contact me with your questions, or concerns.

 
More on Goals for the New Year:



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Christmas Wishes

Dec 22, 2009

As impersonal as the internet can be, this blog and my columns are intended to create a dialogue between us. I am always mindful that there are real people who read, reflect and sometimes respond to my words.

As this year gives way to the next, please know that I sincerely appreciate a healthy exchange of ideas, and the opportunity we have to connect.   

 


Looking Ahead to 2010:




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Partnerships & Alliances

Dec 19, 2009

When you consider growth and development there is always a question of how best to accomplish the task. Considering a partnership or any type of strategic alliance requires more research than most people invest.  

The most important aspect of a business alliance (shared ownership, strategic alliance or dedicated supplier) is a common and clearly defined objective. What do you want to accomplish, what does the other party[ies] want, and what is primary objective for working together?  

The following are a few suggested guidelines you may review prior to forming a partnership, committing to a single supplier or formalizing a strategic alliance:    

1.    Clearly define your objective. 

What do you want to accomplish, and how will this business arrangement facilitate your goals? What are your personal, professional, business, family, self-satisfaction, and financial goals? Consider making a list and describing your objectives in writing.  

2.    Know your counterpart(s) personally. 

You should learn as much as possible in terms of organizational history, ethics, financial position, credit history, and goals of each responsible party. Just as you date prior to marriage, getting to know the true character of the other business entity is time well invested.  

3.    Know the organizational culture.

Learn the structural integrity, and the management personalities of the people with whom you will affiliate. Any organization is nothing more than a compilation of its individual members. It’s a composition of the integrity of its citizens, directed by a consensus of the leadership. You should know the managing partners, and carefully examine the opportunities you may have to influence decisions and effect change.  

4.    Pay attention to your own intuition. 

As a business owner, you’ve developed a valuable level of intuitive reasoning capability. Through years of experience, repeated trial and error, and an increasing reservoir of cultural capital, you’ve acquired some essential abilities to reason through a variety of issues. Don’t ignore your gut reactions when making important decisions.     

5.    Weigh all of your options. 

A business alliance is only one of the many development opportunities. Some gurus claim that the best action is to do the opposite of what may be natural or expected. Focus on your objective.

 Most of all, heed your own warning signals, trust your gut. You are successful because you do most things right.

 More on Planning:



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Growing Your Agribusiness

Dec 15, 2009

A growing agribusiness should generate three sources of income—profit, equity and satisfaction. The objective of every business owner must be to maximize these rewards. To do so, an owner must aspire to the five Gs:


  • Grow equity, which is the foundation for permanence, rather than income.
  • Groom tomorrow’s leaders today, rather than develop obedient managers.
  • Generate capital improvements for long-term success, rather than spend today at tomorrow’s expense.   
  • Gather assets for a retirement option, rather than drain capital assets from the business.
  • Guarantee continuance of your operation against any personal and/or financial calamity.



More for Agripreneurs:




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Building a Bridge

Dec 11, 2009
The Bridge Builder
 
by Will Allen Dromgoole
An old man, going a lone highway,
Came, at the evening, cold and gray,
To a chasm, vast, and deep, and wide,
Through which was flowing a sullen tide.

The old man crossed in the twilight dim;
The sullen stream had no fear for him;
But he turned, when safe on the other side,
And built a bridge to span the tide.

"Old man," said a fellow pilgrim, near,
"You are wasting strength with building here;
Your journey will end with the ending day;
You never again will pass this way;
You've crossed the chasm, deep and wide-
Why build you this bridge at the evening tide?"

The builder lifted his old gray head:
"Good friend, in the path I have come," he said,
"There followeth after me today,
A youth, whose feet must pass this way.

This chasm, that has been naught to me,
To that fair-haired youth may a pitfall be.
He, too, must cross in the twilight dim;
Good friend, I am building this bridge for him."
 
 Share “The Bridge Builder”  (printer-friendly version)
 

'The Bridge Builder',  by Will Allen Dromgoole, is as American as pumpkin pie and Monday Night Football.  The poem speaks of our indomitable spirit, and the care we take in preparing the way for a next generation.

As one of Tennessee’s best loved writers, Will Allen Dromgoole is credited with thirteen books, 7,500 poems and 5,000 columns. Born in Murfreesboro October 16, 1860, she graduated from the Clarksville Female Academy in 1876, and studied, in Boston, at the New England School of Expression.  


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A Light at the End of the Tunnel?

Dec 08, 2009
For the agribusiness owner, retirement should be a light at the end of the tunnel. For some it’s a sense of freedom and reward. But, for others it’s an oncoming locomotive at full speed. Regardless, any business –  be it a farm, agribusiness and large operation –  is only as valuable as the return (monetary, and beyond) a person is able to derive from ownership.
 
It’s not uncommon for an owner, after 40-some years at the helm, to suddenly realize there may not be enough money to fund a 20 to 30 year retirement. Faced with a severe money shortage and few alternatives, the idea of drawing equity from the business or asking the children to buy shares may be less than ideal.  
If you lean towards retirement, what should you do? Where do you start? And, how might you make decisions?
Use some quiet time to detail in writing the ideal situation you want to see in the future – vocationally, familially and financially. All too often people sacrifice opportunity, and falter behind self-imposed constraints, by thinking first and only of money. Take a few moments and ask yourself the following questions:
1.    How will I spend my time in retirement?
a)    Continue to work in the business, or create a new venture?
b)    Do volunteer work, or pursue hobbies?
c)    Assuming that a person can only play so much, what else will I do?
 
2.    As I prepare for retirement, how do I want to develop my business?
a)    To support expansion?
b)    Prepare for sale?
c)    Create a legacy to future generations?
 
3.    Have I considered alternatives to complete retirement?
 
4.    Are my children, grandchildren, loyal employees and/or extended family interested in continuing to grow the business?
 
5.    Do I see a financially satisfying path to retirement?
 
More on Succession Planning:
Conversation Starters  Planning Tool from Legacy by Design
Retirement Options – Previous Legacy by Design blog posts
Register for AgConnect – Orlando, January 13-15, 2010


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Affirmations: The Key to Achievement

Dec 04, 2009
Affirmations are the key to achievement and self talk is the most important conversation a person can have. Whether you ‘can’ or ‘can’t’, you’re correct. Use positive self-talk with conviction and you start down the path to success.  
One of my great passions is flying. My first airplane was a 1946 Taylorcraft. Buying the plane was a dream come true. Learning to land, however, was one of the most difficult skills I’d ever tried.  
The decision to buy the T-craft was purely emotional, fueled by a lifelong dream. Flying, I reasoned, would be a great hobby, an excellent escape, and a fun pursuit. I knew I could learn to fly. Besides, how could a lifelong aspiration be anything but fun? Any forethought of complication was immediately dismissed…
Flash forward a few weeks. During one very long and difficult lesson, reality struck: I was struggling with learning to land. It was evident to my flight instructor long before it occurred to me. In one session, I attempted eleven landings – all of which ended badly. For some reason, my mind did not reconcile with the idea of gently returning to earth. 
That day I learned four key points:
1.    Landing is an important skill to master
2.    Landing is the key to competent flying
3.    I am not the first pilot to face this challenge
4.    Confronting this challenge will test my resolve
So I decided then and there to ‘love to land.’ At least 100 times per day I said quietly to myself, out loud to no one in particular, and in hand-written notes later discarded, “I love to land.” This self-talk, repeated regularly, over and over and over, cannot be ignored by the mind. Affirmations are the key to success they serve as verbal reminders of our determination.
Master landing I did. Since then, I’ve used affirmations in the face of some very challenging situations. Give it a try the next time you face a daunting challenge.   
On Succession Planning:

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These are the Good New Days

Dec 01, 2009
Nothing sells like bad news. According to the mass media, the sky is always falling. 
 
I recently read a book set in the early 1900s; the stories and the photos of that era always bring about craving for simpler times. But the early 20th century, though simplistically appealing, was also terribly primitive compared with today.
 
The early 1900s was an era of tuberculosis, typhoid, sanitariums, child labor, child death, horses, horse manure, candles, 12 hour work days, tenements, slaughter houses and outhouses. 
 
100 years ago you would count your blessings if you lived to 50. 1 in 4 children died by age 14. Cities were polluted with black soot and smoke. Streets were smelly and garbage filled. American farmers were still using the spade and hoe. Power on the farm was by horse, and a farmer could produce only about one percent of what his counterpart is capable of today.        
 
According to the Cato Institute, “There has been more improvement in the human condition in the past 100 years than in all of the previous centuries combined.” For example:
 
  • Today, the death rate among children has improved by 95%. 
  • Man spent the last 100,000 years trying to get enough nutrition, now we are being encouraged to cut back on our caloric intake. 
  • A family living at poverty level has an income 3 times the average per capita income of the world. They own a car, color TV, DVD player and an assortment of modern conveniences. 
  • The fastest growing household expense for is recreation. We spend 3 times what was spent in the 1950s, and 10 times what was spent in the 1900s. 
  • Today about 85% of families live in their own home, compared to about 40% in the 1900s. 
  • A $350 laptop today has more computing power than was available to all nations combined during WWII. 
  • In the early 1900s only about 1 in 10 children went to high school. Today 9 in 10 do. 
 
The Cato Institute writes, “We live in the wealthiest society in the history of the planet.” Daily we allow ourselves to be bombarded with bad news. Yet, we are healthier, live longer, are richer, have better jobs under better conditions, have more time and money for recreation, bigger and better homes, breathe cleaner air, and drink healthier water. 
 
Our challenge is to appreciate the opportunities we have and enjoy life as it is, and not as the news media would like to convince us… Life isn’t necessary easy; it never has been. But satisfaction comes from rising to the challenges, using our strengths to create something better. Our goal should be to become bigger, better, stronger, and faster than our predecessors.   
 
A properly designed and judiciously implemented succession plan creates a better outcome for family business owners and their successors. The primary purpose of succession planning is to promote, preserve and protect the family’s most valuable asset. A comprehensive plan removes uncertainty, mitigates risk and allows the owner to exercise control. It encourages the family business owner to plan success and enjoy life.  
 
 
On Succession Planning:

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