The Three C's of Succession Planning

What makes a good family farm transition? It is difficult to achieve a good farm transition without at least doing well in each of these "C"s.
What makes a good family farm transition? It is difficult to achieve a good farm transition without at least doing well in each of these "C"s.
(AgWeb)

I recently taped a podcast with Dave Specht who is the director of Global Family Business Institute at The Drucker School of Management and perhaps more importantly lives in Basin City, Washington (I will let you look it up on a map).

During the podcast, we discussed what makes a good family farm transition. He mentioned the three C's:

  • Contingency planning. Has the family determined what would happen if suddenly you were killed in a car wreck? Would the next generation be ready to immediately step in and take over and perhaps even do a better job?
  • Cash flow planning. Have you developed a plan that shows how much cash flow you would have in retirement and even more importantly how much cash flow the farm generates? Does the next generation understand how this cash flow is derived and what goes into making it?
  • Communication planning. Have you communicated your plans to the next generation, including any of those "in-laws?" If you only communicate your plans to your kids, they will then communicate your plans to their spouse. Will it have the same impact?  Also, have you introduced your kids to your important contacts, such as input dealers, CPAs, attorneys, insurance agents, etc.

As you can see, these three C's are very important. A successful family farm transition has likely succeeded in all three. It is difficult to achieve a good farm transition without at least doing well in each of these C's.

Listen to the podcast:

 

 

Latest News

DOE Rejects API Appeal on LNG Export Suspension, Ensures Review Continues
DOE Rejects API Appeal on LNG Export Suspension, Ensures Review Continues

The Department of Energy (DOE) has declined a request by the American Petroleum Institute (API) and others to lift the suspension on new liquefied natural gas (LNG) export approvals.

Oil Testing Offers Value: Like a Blood Test for Tractors and Combines
Oil Testing Offers Value: Like a Blood Test for Tractors and Combines

Oil and fluid testing answers both short- and long-term questions about the internal condition of engines, transmissions and hydraulic systems.

Airplane
Still Waiting on SAF Announcement

While the White House aims to boost production of SAF, it has faced challenges in defining rules for tax credits, particularly for crop-based forms of the fuel.

Corn Prices Higher After USDA's Bullish Reports, Soybeans Flat: Where Do the Markets go Now?
Corn Prices Higher After USDA's Bullish Reports, Soybeans Flat: Where Do the Markets go Now?

Grains end mixed with strong gains in corn in reaction to USDA's 90 million acre estimate and lower than expected stocks. But how much higher can corn go? Garrett Toay, AgTraderTalk, shares his thoughts.

Where Did All the Corn Acres and Principal Crop Acres Go? The Two Biggest Questions from USDA's Big Prospective Plantings Report
Where Did All the Corn Acres and Principal Crop Acres Go? The Two Biggest Questions from USDA's Big Prospective Plantings Report

USDA says farmers intend to plant 90 million acres of corn this year, which is lower than the trade expected prior to USDA's big Prospective Plantings report.

USDA Shocks the Markets with 90 Million Corn Acre Estimate:  Where do Corn and Soybean Prices Go From Here?
USDA Shocks the Markets with 90 Million Corn Acre Estimate: Where do Corn and Soybean Prices Go From Here?

USDA provides bullish reports for corn, but neutral to bearish for soybeans and wheat. Brian Splitt, AgMarket.Net, has details.