Scary. Overwhelming. Stressful. These are the terms generally associated with succession planning.
Passing down the farm to your successor can be a long, tedious process, but it can also be an exciting one. Having the right people and tools in place to help make the transition easier will save a lot of headaches in the long run if managed correctly. In a recent presentation at the Professional Dairy Producers Business Conference, Marissa Nehlsen, a financial coach, speaker, and CEO, gave producers insight on how to undergo the succession planning process.
There are many moving parts on a farming operation that makes having a succession plan crucial, Nehlsen explained. When asked about their plan, many farmers are apprehensive and stressed to answer the question. For many, the topic of succession planning has been one that is usually put off and saved for another day, but when that day comes, many continue to avoid planning for it. “Women are four times more likely to survive their husbands, and only 40% of Americans have a will. Seventy percent of family agriculture operations expect operations to continue as a family business, but only 23% have a formal succession plan,” noted Nehlsen. Having all legalities in order will prevent further problems down the road.
When is the last time your accountant, attorney, financial adviser, banker, and insurance agent all sat in the same room and talked about your plan? Nehlsen stated that although we tend to meet with all these people individually, having a sit down with them in the same room will ensure that everyone is on the same page when it comes to the future goals of the operation.
As you navigate the succession planning process, Nehlsen provided some questions to consider:
- How much succession planning have you completed up to this point?
- Is your current succession plan written down?
- Have you communicated your current plan with the rest of your family?
- Is your plan protected from death, divorce, or disability?
- What about your current plan keeps you up at night?
Sitting down with family members can be challenging, especially if there are many opinions about long- and short-term goals of the operation. Ensure that when meeting with family, you first have an objective and an agenda. Going into a meeting with no plan will often waste valuable time and get you off track, Nehlsen noted. When identifying obstacles in the succession process, what are the biggest obstacles and how can you tackle them moving forward? After exploring options that will help you achieve your goals, make a decision and stick to it, cited Nehlsen.
While change is often deemed scary, having a hopeful and excited attitude will make the transition process much smoother. The thought of succession planning may seem overwhelming, but it can also be a positive experience to see your long-term goals come to fruition as you move toward the future.
