In the last article, our discussion centered on a question posed to Dr. Ron Hanson, Professor Emeritus at the University of Nebraska, and advice to young producers. We discussed education, farm and ranch economics, and the older generation holding the decision-making cards too long. Let's continue exploring this advice.

(Check out Kohl's column on young producers here.)

The younger generation should be careful not to enter a rusted out, worn-out, and faded out business. This type of business is one where the machinery and equipment lines are fully depreciated. The livestock and land are not productive, and management lacks proactive, effective practices.

The older generation will sometimes indicate that they were not handed the business on a silver platter and that you cannot start out on top. However, this is a business decision and overpaying for depleted or underperforming assets can be a slow financial death sentence in today's world of low economic margins and extreme volatility. In these situations, a third-party business assessment is advised. It can also be a wake-up call for the older generation or for the children who are not involved in the business and are inheriting or receiving some compensation. Step back from the family situation and be objective. If you were purchasing a non-family business, you would seek candor and the same should apply for a farm and ranch business.

Related:Advice for young farmers and ranchers: Part 1

As one retiring CEO stated young producers should invest in productive assets or the components that make you money. One positive aspect of the new generation is that they are multitaskers with a wide variety of talents. They utilize their talents and skills to generate “side gig” revenue or dimensional income. This can be threatening to the older generation who often think inside the box and linear. Skill and revenue assessment and potential are a very necessary part of a young member entering the business. Along that note, time management assessment is crucial. Side gigs can take the focus away from the core business, family, or personal time and lead to burnout over an extended period of time.

Finally, being financially skillful is imperative. You must be knowledgeable of your own, your spouse’s, and your business partner’s credit reports. Having a gauge on business and personal budgets and knowing one’s breakeven points is critical for success. Betting on the next big thing or waiting for a homerun can lead to a strike out.

A shout out to the FFA members that attended our meeting and for asking questions. Dr. Hanson and I would both enjoy lecturing to a class full of these engaged FFA members.

Source: Dr. ,David Kohl, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.