How young people can start the farm transition discussion
Three experts weigh in on the best way for the next generation to start the farm transition conversation.
Show them you mean business
Since any successful inter-generational transition must become a business transaction, I have found that young people who begin with a business approach will tend to be taken more seriously. What might this look like?
It means young people need to act like adults. It helps to have the start of a researched and credible financial proposal on the table, demonstrate you’re prepared to talk about getting some skin in the game and have a non-entitlement attitude.
You want to be taken seriously, and being able to converse more intelligently about finances makes you a more serious and interesting conversation partner to your parents. And it makes it harder for them to dismiss their next generation offspring as children, whether they’re 21 or 51 years of age.
Another catalyst for a meaningful conversation on transition occurs when the next generation independently develops its own life plan. At your own initiative, perhaps with the assistance of a mentor or coach, commit to writing a five to 10 year career trajectory.
Then invite your parents and other stakeholders over for an intentional meal in order to share your life plan. Watch the conversations flow. The important component of this strategy: young people take the initiative – both in preparing their life plan as well as preparing or paying for the intentional meal.
Do your homework
Succession should be defined as the continuation, not transfer, of a family farm business. This continuation requires a process over time of joint active roles and participation by both generations.
Words are important – do you want to be an agricultural entrepreneur and become an owner or manager of an agricultural business?
Do you have the personality, skills, and most importantly the passion to become one? Do you understand that agriculture is an equity game and not an income game?
Talk to other young farmers, discuss these challenges and then make your decision. Remember, don’t ask what the business can do for you, but rather what you can do for the business.
The senior partners must – and I mean must – propose the opportunity with distinct expectations and results. The junior generation has to then mould those guidelines of the proposal into a plan.
If you simply are involved in your parent’s plan, you will remain an employee.
How about long term clarity and security? Whatever equity remains in the business won’t form part of personal wealth on the parents’ death. Agricultural businesses can’t afford to buy a tractor twice.
Why is family farm succession sometimes so difficult? Because it’s so important!
Here are five winning strategies to facilitate discussion:
1. Identify the purpose and express it to the owners
You might say something like, “It’s important for me to take the time to discuss our mutual expectations, visions and concerns. I hope we’ll give ourselves the means to succeed. What do you think?”
2. Plan a time and place to discuss
Commit to investing time and energy. Agree on an agenda.
3. Identity and get behind common values
Everyone wants to have a profitable and sustainable business, where everyone is happy and can be fulfilled.
4. Projecting into the future
Where do you see each other in one year, five years and 10 years? How do you see your collaboration? What do you need to do to get there?
5. Accept that everything is not said and settled in one discussion
A successful transition does not happen by chance. We must choose to succeed in our collaboration.
You need to understand what drives everyone – the common values, mission, vision – and then find a way to get there.
Too many people feel anxious about these delicate but important discussions, and therefore avoid them. As these moments are often emotional, it may be important to take a trusted advisor along in this process.
From an AgriSuccess article.