Developing and implementing a business management contingency plan to overcome unexpected changes to the organizational structure and/or management leadership of a family farm is crucial for the continued success of a farming operation for future generations. Having a business management plan is an important step in preventing potential misunderstandings between farm family members which helps in avoiding possible family legal disputes especially if unexpected changes happen. Farm families must embrace a vision which insures the future of their farm and then follow through with a management plan to accomplish this purpose for future generations. The ultimate goal must be directed at being prepared with a plan.
Without proper planning and effective communications, the process of passing the family farm from one generation (parents) to the next (their adult children) can result in a lot of emotional stress and even disputes between family members. A farm family must create and then formalize a clear vision for the future of their family farm. Mapping out a succession plan to transfer farm ownership between generations can be an overwhelming task. There are no short cuts or quick fix solutions to this process. Neither are there easy to find answers. This presentation will provide a six step planning framework to help farm families in developing/implementing a successful farm ownership succession plan for the next farming generation. A check list outlining the necessary transition planning guidelines as well as risk management strategies will be discussed. Five words that spell family farming success will be utilized for individuals to determine a rating score which measures the strength of their family farming operation.
SUMMARY POINT: Farm families often question how to begin contingency planning for our farm. What is the first step? How can this ownership transition planning process ever be accomplished? Although this task may seem overwhelming, farm family members must identify a clear vision for the continued success of their family farming operation and then formulate a contingency plan for the next farming generation. This vision becomes the farm’s mission statement and provides direction for effective decision making to achieve management goals. A necessary requirement to insure the future of a farming legacy, as well as to preserve the heritage of a farm family, is being prepared with a contingency plan.