People often approach me about our farm succession plan and ask a simple question: who is helping us through this process?
Yes, this is a very good question and an important one for anyone who is looking to have a farm succession plan that will stand the test of time. Since I get this question so much, I decided to write about the people who are part of our succession plan.
What does our farm succession plan have to do with a bus? You would understand if you have read the book, Good to Great by Jim Collins. He discusses having the right people on your bus so you can reach your business goals. Some people may even need to get off the bus, which has been evident in our situation. Our goal is a successful business transition to the next generation, and here are the people we need with us:
I started having uncomfortable transition conversations with my parents over 10 years ago. The conversations typically began with the question of what was going to happen to the farm and ended with worry, confusion, and sometimes tears. The talks became more concrete when I moved back to farm full-time. The succession discussion is no longer the obvious situation going unaddressed within the family.
I wrote about finding the right accountant in my first planning blog. We had our accountant of 15-plus years step off the bus. Why? Good question.
In 2012, I started asking the previous accountant questions about new entities, transitioning the business, and for general advice on our future. We also found some general accounting problems within our account. I soon got tired of the dead end conversations and sought advice from our lender. The accountant search process took several months, but today we work with an accountant firm specializing in succession plans. The firm also works with our family attorney on legal documentation.
What is more difficult than moving the accounting business of 15-plus years? The answer is moving business from a banker/lender of 30-plus years. My mom lost sleep over changing lenders. Changing financing is on a difficultly level close to changing the color of the paint on our tractors.
Our previous lender worked with my parents when other banks shooed them away during the 1980s. I appreciate that commitment, but I could also see problems and poor service in 2012 that would hinder our succession plan. Our new lender works with us and our accountant on strategy, financial statements, and balance sheets. As a bonus, our loan terms are better and lower operating money interest saves tens of thousands of dollars each year.
We cannot go on this trip alone. The people on our bus include the accountant, lender, and lawyer. The important note is that we are all headed in a clear direction.
I'm not an expert and am keen to learn from your experience. Who else should be on our bus?
The opinions of Maria Cox are not necessarily those of Farm Futures or the Penton Farm Progress Group.
Investing in a knowledgeable advisor and thinking about answers to key questions before putting pen to paper can make creating a farm estate plan much less complicated. Use the Penton Agriculture free report, Farm succession planning: Customizing a farm estate plan to get started on your own plan.