Transcript Building for the Successful Transition of Your Agricultural Business- Workshops and Resources

Building for the Successful Transition
of Your Agricultural BusinessWorkshops and Resources
Donald J. Breece
Farm Management Specialist
Barry Ward, Leader, Production Business Management
[email protected]
Transitioning Your Family Farm
Thanks
Funded Grant
Sponsorships
What is transition planning?
• Farm transition planning is the
process by which the ownership
and the management of the family
business are transferred to the
next generation.
Transitioning Your Family Farm
Why Should a Farmer Attend
• You know that you need to take time for
developing a transition plan for your farming
business...How about a 2 day workshop retreat?
Who Should Attend?
• Any family business that would like to transfer
their business to the next generation.
• Several members of the family business, from
different generations
Host Extension Educators (Agents)
helped to recruit!
Transitioning Your Family Farm
Now is the time to get started!
To spend time away from the distractions of everyday farm life,
and critically review your business.
To learn farm business transfer strategies and how to
implement them.
To discover ways to increase family communication.
Workshops
The two-day workshops were designed to help farm
families develop a transition plan for their family
business. The sessions challenged participants to
examine their business to the core and to actively plan for
the future.
The workshop retreats were conducted at four locations
in Ohio. Two of the workshops included an overnight stay.
The workshops were conducted by Ohio State University
Extension and supported by a grant from the North
Central Risk Management Education Center and USDA.
Transitioning Your Family Farm
Teaching Team
Dr. Bernie Erven, Professor Emeritus of Agricultural Economics at The
Ohio State University
Paul Wright, attorney at Law and former OSU Extension Ag Law
Specialist.
Dr. Don Breece, OSU Farm Management Specialist.
Barry Ward, OSU Extension Leader, Production Business Management.
OSU Extension Educators:
David Marrison, Ashtabula Co.
Chris Zoller, Tuscarawas Co.
Jeff McCutcheon, Knox Co.
Chris Bruynis, Wyandot Co.
Mike Gastier, Huron Co.
Julia Woodruff, Ashland Co.
Workshop Outline
Day 1
• Overview of
Transition Planning
• Objectives of
Succession Planning
• Financial
Considerations
• SWOT Assessment
• Goal Setting
• Communications
Day 2
• Retirement Planning
& Tax Management
• Business
Organization
• Treatment of Off-farm
heirs
• Buy-Sell Agreements
• Trusts
• Legal Q & A
Sessions were held from 9:00 a.m. to 4:30 p.m.
How do we develop managers?
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Plan
Organize
Staff
Direct/Coach
Control/Monitor
Five functions of
management
Resources Developed
Revision of Extension Bulletin:
“Transferring Your Farm Business to the Next
Generation”
Part 1 How can you tell that you business is profitable
enough?
Part 2 Are there enough income and assets to provide for
the older generation?
Part 3 How can you help the two generations get along?
Part 4 What should you transfer? In what order?
Part 5 How to avoid paying too much income, gift and estate
tax?
Developed a participant notebook of materials,
case studies, and teaching outlines.
More Resources
Nine Fact Sheets
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Farm Planning Process Model
Planning for the Successful Transition
Develop a Useful Mission Statement
Developing Goals
Developing the Next Generation of Managers
A Comparison of Business Entities
Tax Characteristics of Business Entities
Starting, Organizing and Managing on LLC for a Farm
Using Liability Limiting Entities to Manage Liability
Exposure for Ohio Farms
Soon to be on OSU Extension’s Ohioline:
http://ohioline.osu.edu/
Evaluation Questions
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Plan to hold an intergenerational meeting 96%
Plan to meet with an attorney to develop… 89%
Plan to meet with an accountant… 76%
Farms with 1000 acres plus 35%
• List of most important item learned:
Communication, Family Business Meetings,
Planning, Structure, Taxes, Transfer Strategies
95 Participants in each of four workshops, another 85 in two
additional day long programs (Legal, Financial and Taxes).
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Averaged a 1 point change
of a 5 point scale!
Change in Knowledge
1.6
1.4
1.2
1
0.8
0.6
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Most Important Items Learned
• Communication is King
• Family Business Meetings/Goal Setting
• Aware of more Dimensions, Problems,
and Complications than was aware before
• LLC business structure and Trusts
• “That we are Businessmen as well as
Farmers”
• You can not start early enough!
What Additional Information Would
Participants Like?
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Business Transfer Strategies
38%
Trusts
38%
Financial Issues in Transfers
37%
Tax Issues
32%
Buy-Sell Agreements
29%
Transition Planning
22%
Developing Skills in Next Generation 17%