Apr 23, 2014
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January 2014 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.

7 Questions to Start Discussions

Jan 09, 2014

Nevada   NRCSFrom Legacy Moment (01.03.2014).
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The following seven simple questions should allow for constructive conversation. Not one is steeped in emotion or detached from reality; rather each is meant to encourage dialogue. Using the questions to structure discussion will help family business owners define their succession intent. Even if you have an existing succession plan, it's important to revisit the topic and refine your objectives, making sure your actions align with your goals.

1. Does the owner have sufficient resources to fund retirement if the business is transferred during his or her lifetime?

  • If not, the owner should retain the land or receive some consideration in return for ownership.
     

2. Does the owner want the active children to receive the business if he or she dies prematurely and/or the children are not ready to assume a leadership position?

  • If so, are there adequate resources to ensure the family's financial security and pay for interim management?
  • If not, is the owner preparing for a sale or redemption of the operation in case of death before a successor is ready?


3. Will an immediate (and/or gradual) transfer of the business to the active children create conflict among the family if the inactive children do not receive an equitable distribution until a time when the family settles the owner's estate?

  • If so, has the owner considered transferring voting stock to the active children and nonvoting stock to the inactive children?
  • An owner might also consider allowing the active children to purchase ownership under favorable terms and conditions.


4. If there are multiple children active in the operation, are they capable of working harmoniously with each other, dividing duties and respecting each other's positions?

  • An owner could consider appointing one leader, assigning respective roles in the operation and/or establishing a board of directors to help make decisions.


5. Do the active children have the skills and abilities necessary to run the operation, or should the owner consider a transitional management plan until a family member is prepared to lead?

  • Transitional management can fill a multitude of roles including mentoring, advisory board and business leadership, if the owner has minor children who have not yet made a career commitment.


6. Has the owner made provisions for premature death, disability, dissolution and divorce?

  • A well-crafted buy/sell agreement will help maintain the integrity of the operation and ensure the family's financial security.


7. Are the active children currently participating in a professional development program, including experiential learning, education and mentor-protégée relationships?

  • Each leader in the organization should be responsible for, and accountable to, a written leadership development program. A well-designed program will increase the organization's capabilities and improve bench strength.


Remember, succession is a process, not an event. Have questions about your next steps?  You can always Ask Kevin.

News & Resources for You:

 

Minimize conflict. A Family Employment Policy helps instill a business-like environment for all family members participating in the operation.

And never underestimate the Value of Teamwork.

Access a bountiful library of succession planning resources at eLegacyConnect 

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Photo courtesy of USDA NRCS
 

 

Don't Make Another New Year's Resolution

Jan 02, 2014

Snowy Trail   Bing free to share and use commerciallyFrom Legacy Moment (12.27.2013).
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for future issues,
delivered via email each Friday.

 

 


Why bother making yet another resolution unless you fulfilled last year's promise to do, change or alter a behavior? Most resolutions are forgotten as quickly as they're made. It takes a ramrod commitment to change behavior, especially if it involves something you don't inherently treat as a vice.

Behaviors are a funny thing. Most people see the actions of another and jump to conclusions regarding what's good and bad. Yet those same people won't stop or change a behavior that may be detrimental to themselves.

So, this year don't say you'll try. Don't say you'll stop. Don't say you'll change. Just do it! And, if you're determined to get something done (i.e., improve your health by eating better, exercising regularly, spending more quality time with your family or engaging in the succession planning process), just do it. Get it done.

You don't have to do it all at once. The greatest journeys start with a single step. The same applies to any other great achievement, and succession planning certainly fits that bill. So schedule the next family meeting. Use meetings in January, February and March to convene with the family and write specific goals for your succession plan.

And then take the next step, and the next one after that. It isn't a resolution that gets the job done. It's commitment and caring—about your family, the farm and the future—that motivate action and encourage you to continue. My best to you in 2014, and please let me know how I can help at Ask Kevin.

News & Resources for You:

Our FAQs will help you get started.

Move in the right direction. What drives you to success in 2014?

Is your plan complete?  Make sure with this eLegacyConnect self-assessment.

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