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3 steps to succession success

Take it from DAD: Define goals, align finances and develop next leaders.

Pam Caraway, Farm Futures executive editor

June 6, 2024

3 Min Read
Aerial view of Midwest farm
Getty Images/iStockPhoto

“For every complex problem, there is an answer that is clear, simple and wrong.”

American journalist H.L. Mencken could have been talking about farm succession — which, for farmers, has to be their most emotionally weighted business decision. And it’s likely why taking the first step is so difficult.

“Sometimes it’s easier to defer that conversation. Unfortunately, time and appreciated farm values may pass some people by,” says Mike Downey, farm business coach and transition consultant with UnCommon Farms. “If we don’t have a good structure in place, things can get away from us.”

To go from a blank document to a full-on, multifaceted transition plan, think of the acronym DA D :

D. Define farm goals for off-farm and farming heirs.

A. Align financial structure to support the farm, define fairness and forgo as much tax as possible.

D. Develop leadership so those running the show have the experience and corporate knowledge needed to be successful.

Calling it “DAD” reminds everyone of the complexity involved in a family business transition.

In defining goals, owners must ask themselves if the farm will continue. “It’s a good question to identify what the long-term intentions and goals are,” Downey says. “I don’t think I’ve met a farmer yet who doesn’t say they’d like to see their farm continue and stay in the family.”

Related:Customize your farm succession plan

Deciding what will happen to the farm and “your worldly goods” after you die is one thing, says Nebraska farmer Scott McPheeters. But he adds, “I’d like to know what’s going to happen while I’m here. A life goal of mine is to not be needed.”

Scott McPheeters

Start conversation

Setting goals must involve all stakeholders. While it’s a hard conversation to start, each party may have been waiting for the other to begin.

“We often see the senior generation waiting for the next generation to ‘step up’ and tell them how they want the transition to work,” says Tim Schaefer, an executive management coach and succession planner for ag operations. “At the same time, the next generation doesn’t want to be seen as disrespectful and step on their parents’ toes.”

That’s why Schaefer often sees communication as the missing ingredient in transition plans.

“We have found transition plans are most successful when there is good communication about the business of farming,” he says.

Setting goals involves listening to the others invested in the process. Who wants to lead the farm? Who doesn’t but wants the farm to continue? Who just wants a check?

If one goal is for the farm to continue, the next question is how to continue the farm into the next generation while being fair to both farming and non-farming heirs.

Answers that serve both groups can be found. The question is which solution is the right choice for the business and the family.

Davon Cook, a family business consultant at Pinion, offers two fill-in-the-blank sentences: “Five years from now, if we’re successful, I’ll be saying, “I am so glad we were able to do ________ because _______. That led to _____ happening in our business/family.”

If the main goal is to transition the farm, it’s important to separate estate planning from succession planning. Cook recommends enlisting an estate planner and assembling a transition planning team that includes mentors on the leadership side.

“I like to broaden the concept a bit to say you generally need to plan for transitions in ownership and transitions in leadership,” Cook says.

About the Author(s)

Pam Caraway

Farm Futures executive editor

Pam Caraway became executive editor of Farm Futures in 2024. She has amassed a career in ag communications, including leadership roles in editorial, marketing and public relations. No stranger to the Farm Progress editorial team, she has served as editor of former publications Florida Farmer and Southern Farmer, and as a senior staff writer at Delta Farm Press.

She started her writing career at Northwest Florida Daily News in Fort Walton Beach. She also worked on agrochemical accounts at agencies Bader Rutter and Rhea + Kaiser.

Caraway says working as an ag communications professional is the closest she can get to farming – and still earn a paycheck. She’s been rewarded for that passion and drive with multiple writing and marketing awards, most notably: master writer from the Agricultural Communicators Network, a Plant Pathology Journalism Award from the American Phytopathological Society, and the Reuben Brigham Award from the Association for Communication Excellence.

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