JEFFERSON CITY, Mo. – Successfully transitioning a family farming business to the next generation doesn’t happen overnight. It takes planning and “communication, communication, communication,” says Wesley Tucker, agricultural business field specialist with University of Missouri Extension.
To help families with the succession planning process and initiate communication, Tucker and an MU Extension team will lead two-hour succession planning workshops across the state this summer (in-person, July 25 – August 8. Online, August 10). The Missouri Department of Agriculture and FCS Financial provided funding for the workshops.
Fear of conflict stops many families from pursuing succession plans, says Tucker, but sitting down together and communicating what everyone wants from farm succession takes a lot of the angst out of the process.
“You will make some mistakes,” he says. “There is no perfect plan to transition a family farm business to its heirs when you want the farm business to continue running, which is the goal of succession.”
Tucker says none of us enjoy conflict, so we often avoid those difficult conversations, but it’s important to engage in “intentional communication” in the form of regular family business meetings to discuss issues.
“While it might sound foreign, the more we can separate ourselves from the family roles and treat it like a business, the greater our chances of actually making this work,” he says.
Tucker says the U.S. Small Business Administration has found that businesses are more at risk of failure when transitioning to family instead of nonfamily members.
“Keeping the family in the farm and the farm in the family is the goal of nearly every Missouri producer,” says Chris Chinn, director of the Missouri Department of Agriculture. “In order to do that, producers must be intentional and focused to prepare a succession plan that takes all parties and priorities into consideration. Navigating this process can be very daunting. This workshop will help answer questions while providing a roadmap for preparing a plan that works for your operation.”
Unlike estate plans that start into motion after an event — typically, a funeral — succession plans should not depend on an event, says Tucker.
“If they do, then successors who have been involved in their family businesses risk that they won’t be adequately compensated for their efforts — if anything happens to go wrong before that event,” he said.
Succession planning’s focus on handing off business operations also makes it different from estate planning, which involves instructing how to give your land and equipment to your kids.
“That’s easy,” says Tucker, “But if the goal is to keep the farm business together, then you also need a succession plan.”
Tucker says the MU Extension “Preparing for Farm Succession Planning” workshop series will show farmers the path from where their businesses are today to where they want their businesses to be in the future when they’re gone. At each step in the process, the successor gains experience in management and has greater responsibility to make decisions, he says.
During this process, the role of parent transitions from one of chief decision-maker to chief mentor and supporter.
“Whatever you do, don’t leave it for your kids to ‘work out’ after you are gone,” Tucker says.
- July 25 – Bolivar, 6:30-8:30 p.m.
- July 26 – Owensville, 6-8 p.m.
- July 28 – Concordia, 9-11 a.m.
- July 29 – Savannah, 9-11 a.m.
- 2 – Mountain Grove, 6-8 p.m.
- 8 – Macon, noon-2 p.m.
- 10 – Online, 11 a.m. -1 p.m.
Register at muext.us/ABPevents