Scare Yourself into Action

 

 

THE FACT

A Statistics Canada publication revealed that according to the 2011 General Social Survey on Families, approximately five million Canadians had separated or divorced within the last 20 years. About half (49%) of these Canadians ended a common-law relationship, 44% a legal marriage and 7% both a common-law union and a legal marriage.

 

THE EMOTION

These statistics prove that divorce is real. You hear about it through various news channels. Your sister shares a story about her friend’s recent separation.  You receive a firsthand account of a co-worker’s experience.  You witness someone in your community seated alone in a restaurant.  Your heart sinks as story after story is revealed.  You wonder, “If it can happen to someone else, can it happen in our family?”

 

THE RESULT

It’s not only divorce between couples which affects a family business.  Fallouts in relationships between parents, children or siblings can create chaos and confusion. In some situations, the devastating financial damage is permanent resulting in the demise of the business.    

Wearing blinders and fooling yourself into believing that “nothing” will happen to your family business is not the best approach. Believing that you get along great as long as Dad’s in charge or as long as your son or daughter have their way is a sure sign that the situation will change when the circumstances change. The events likely to change the circumstances are often sited as the 5 D’s: Death, Disability, Divorce, Disaster, and Disagreements. Filling in the blank for your own situation is helpful in examining the way your business operates today. We get along great as long as _________.  What are your underlying conditions or circumstances?

At a 2017 Ag in Motion event, Jolene Brown, Agriculture Professional Speaker and Family Business Consultant, shared her list of The Top Ten Mistakes That Break Up a Family Business.

“Presuming a conversation is a contract” stood out from her list.  Jolene clearly emphasized, “If it’s not in writing, it doesn’t exist…”  There was a time when someone’s word and a handshake would constitute an agreement. This is no longer the case.  An agreement like this cannot be validated. With no written confirmation, there’s no evidence to prove the actual intention of the farm owner.    

Jolene Brown made reference to a common message relayed from a farming father to his farming child, “This will all be yours one day!”  Because the intentions were not put in writing, this never occurred.  The dream of the family farm died when the founder died. 

This leads to the next “Top Ten” mistake, “Having no legal and discussed estate plan, management and ownership transfer plan, buy/sell agreement, or an exit plan.”

I believe we know all the importance of having our intentions put into writing but there are “obstacles” that stop us from taking action.  One of the biggest obstacles is procrastination which we attribute to our lack of time.  We use this excuse rather than dealing with the tough issues. Some “thing” always takes precedence over the important “thing”. 

THE SAFEGUARD

 

As difficult as divorce is, the aspect I appreciated the most was having an Inter-Spousal Agreement.  When my former marriage was going south, my counsellor insisted that we speak to a lawyer about drafting an Inter-Spousal Agreement.  The process was like putting in place an insurance clause.  The document didn’t suggest the likelihood of a pending divorce but rather implemented leverage “just in case the marriage doesn’t work”.  The mutual agreement was the follow-up plan.  In fact, this document safeguarded and preserved our relationship when evidence showed our marriage would not survive.  Our current property, pension plans, and child responsibilities were written into the Inter-spousal Agreement.  When the time came to finalize our divorce two years later, no further discussions were required and no disputes occurred. Everything that was decided earlier made the final step easier.  Our Inter-Spousal Agreement avoided hashing over property and child support which would have created additional legal fees.  From the time of the initial separation to the finalization of the divorce, the most prominent and disturbing factor was interference from outsiders who suggested how things should be handled.  The Inter-Spousal Agreement stopped this.    

The valuable lesson is to make decisions when conversations are friendly and the atmosphere is favorable in reaching a mutual consensus on matters of great importance. The written document is a glimpse of what you want to see occur both in the present and future.  It’s a reflection of your best intentions for your family and you.

 

FORWARD THINKING

Fear causes us to be overprotective. In specific cases, fear drives us to try and control the outcome, not necessarily in positive ways.  Identifying your fears, roping them, dealing with them, and discussing them with family members helps you face your major concerns related to your family business. 

Fear should not stop you from signing your name to well-drafted agreements when you have had your “say”.  Avoiding the creation of agreements is by far worse than not having one.  An agreement, even a prenuptial agreement, proves your willingness to work towards a favorable outcome. It sincerely proves that love and respect trumps greed over family-owned assets. Having Partnership and Unanimous Shareholders’ Agreements are part of a sound business plan to adequately deal with possible situations.

Transfer this information into action.  Put your intentions into well-drafted documents with advice from a lawyer as well as input from your accountant. To learn “How to Have Better Communication with Your Farm Lawyer”, click here.  Elaine Froese provides a list of questions to ask yourself.  Reading, learning, asking questions are about doing the right things to protect your interest, farm property, and family farm business.  If specific concerns keep you from having a good night’s sleep, perhaps other family members have the same concerns and difficulties.  Put your concerns to rest once and for all.

Let’s Talk About Depression

 

Been Down That Road

Because I have been there, I can speak sincerely about the effects of depression.  Feelings of helplessness, fear, and lack of confidence consume our abilities to think clearly.  A depressed state of mind is not a happy place to visit and certainly not a happy place to live.  Admitting our need for help takes great strength.  In our weakness, we can be made strong.

During my encounter with depression, I discovered an interesting fact. My depression wasn’t triggered by one major event but sneaked up on me in a series of events, big and small.  The responsibilities, the unfortunate incidents, and the conflicts were likened to bricks being laid on my shoulders. The weight from the combined lot was overbearing and overpowering.  Tears of helplessness overtook me without any warning.  Like Jell-O, which wiggles and jiggles on a plate, I too had no backbone, no strength, no form. 

I was reluctant to take prescribed anti-depressants until a dear friend and pharmacist shared with me a different perspective, “If you had a headache, wouldn’t you take an aspirin?”   Medication alone didn’t fix the depression.  Talking to a counsellor to sort through the debris, the problems in my life, helped pull me through to recovery, allowing me to be freed from dependency on any medications. 

Life challenges are just that … “Challenges”.  Challenges come in all shapes and sizes and mean different things to different people.  Regardless who you are, what your occupation is, or where you live, depression can sneak up on you. Our ability to face and deal with life challenges will depend on our own resourcefulness and support networks.

 

Recognize the Symptoms

The Canadian Association of Farm Advisors (CAFA), Parkland Chapter, invited David Dyste, a Master Practitioner of Clinical Counselling, to share his presentation about the Warning Signs of Depression and Suicidality in Farmers and Farming Families.   Next to family members, we as farm advisors are often the farmer’s first point of contact.  Knowing the warning signs is valuable knowledge for an advisor because often a farming client doesn’t recognize or is unwilling to confront their reality. They are consumed by their circumstances, assigning blame to a list of other factors, rather than willingly addressing their need for professional help. 

In his presentation, David adequately described the symptoms of depression for our benefit.

 

The 2016 harvest was a devastating one, filled with high expectations and predicted record yields. For many farmers, the challenge was getting the grain from the field to the bin.  The task was impossible when cloudy and rainy skies consumed the month of October.  In November, when the combines made their way into the fields, their efforts were limited to only a number of adequate harvest days. Convincing oneself that weather conditions are out of our control is difficult.  Last year was challenging beyond words when farm income and sweat equity laid in the fields over winter.   Circumstances like this can leave many feeling helpless, hopeless, and trapped.

Depression is sneaky, robbing you of your ability to think clearly. Logical reasoning is compromised and clouded.  I have witnessed inappropriate business decisions made which resulted in irreparable financial consequences.  It’s reasonable to assume that the triggering causes of depression may be financial conditions or disastrous events like death or divorce. Yet the true cause could be a series of episodes in our lives.   Dealing effectively with them may require professional help.  Depression cannot be left unattended, believing that you will “get over it”.  More and more people are stepping forth to ask for help because they realize dealing with life’s circumstances on their own is too difficult.

 

Seek And You Will Find

 

When we recognize our disheartening circumstances, we can effectively put action steps into place to turn them into favorable ones. There is hope because there is help. Dealing with our circumstances restores our ability to control them. Rather than feeling helpless, we can see options leading to our recovery.  I know because I have been there.     

Knowing that help is only a phone call away can bring “relief” to a person’s stressful circumstances.  The Farm Stress Line is available if you want to speak to a counsellor. Call 1.800.667.4442 or visit Mobile Crisis Services.

Always Room for Improvement

"We make a living by what we get; we make a life by what we give."

Winston Churchill

 

Imagine an ideal world where everyone cooperates and lives in perfect harmony.

I sense a long pause.  This dream seems impossible, doesn’t it?   Our self-centered egos are the problem. We allow our ideals to interfere without giving any thought to others’ ideals.  As self-seeking and goal-achieving individuals, we need to stop for one minute to evaluate what is important in our lives.  We need to take stock of our inventory, the people involved in our lives and businesses.  Winston Churchill’s quote shifts our paradigm to see the reality.  We may be profitable in the business sense but are we profitable in our relationships?

Strong, deep-meaningful relationships are desired by everyone; however, attaining that depth requires mutual work and commitment between us. People are emotional beings seeking love and respect.  Relationships don’t just happen. A quick method for the ideal relationship only magically appears in fiction books.  

For the most part, our willingness to cooperate may occur only when situations are in our favor on our terms.  Our reluctance to compromise can stir up embedded emotions and resentments which are counteractive to building sound relationships.   We are quick to point fingers at the perceived flaws of others.  They are stubborn, easily angered, and manipulative but we fail to look closely at our own flaws.  We assume we are right in our thinking.  What we may think is our greatest strength might very well be seen as our greatest weakness by others.  I could be the most goal-focused determined individual but taken to an extreme, I can be seen as very controlling.

 

That’s why John C. Maxwell’s book, Winning with People, is so helpful.  His teaching based on twenty-five principles helps to examine our motives in five different areas:

q The Readiness Question: Are We Prepared for Relationships?

q The Connection Question:  Are We Willing to Focus on Others?

q The Trust Question:  Can We Build Mutual Trust?

q The Investment Question:  Are We Willing to Invest in Others?

q The Synergy Question:  Can We Create A Win-Win Relationship?

I think you would agree that our desire and attempts to “fix” others never works in our favor. Study after study, quote after quote, says we must first “focus and fix” ourselves.   Whether we are dealing with our own perception of any given situation, our attitude towards another person, or our own action and reaction, looking at our behavior provides us with beneficial insight for growth and change.

Let’s learn how by taking a peek at one of John’s principles, The Hammer Principle. This one got my attention. John writes, “Never Use a Hammer to Swat a Fly Off Someone’s Head.”

John’s willingness to share his inappropriate approach to dealing with conflict early in his marriage helps us learn from him and reflect on our own behavior.  He claimed he always made sure he won every argument with his wife, Margaret, until Margaret finally sat him down, shared her feelings and explained what his approach was doing to their relationship.    

John wrote: 

From that day I decided to change. Realizing that having the right attitude was more important than having the right answers, I softened my approach, listened more, and stopped making a big deal out of little things.  In time, the wall that had begun to form came down, and we began building bridges.  And since that time, I’ve made a conscious effort to initiate connection anytime I’m in conflict with someone I care about.

Our words have the ability to either build people up or to tear them down.  You can see the effects a hammer can have on any relationship.  If you see the other person or the situation as the nail, you will use a hammer to strike a solution.  A hammer approach is harsh and domineering, an inappropriate method to build a relationship.  The choice is ours to evaluate our preferred approach:  one which creates a peaceful harmonious conversation or a hostile one. 

The best part about the book, Winning with People, is that we are not left stranded.  John is quick to share the principles, point out the problems, provide plausible solutions, and offer self-assessment questions.  In this chapter on the Hammer Principle, he delivers six different approaches to trading in your hammer for a velvet glove. His wisdom is a gift we can give to ourselves and our loved ones.

If your family business is having various challenges, you can choose to discuss one principle at your weekly business meetings until all twenty-five principles have been reviewed.  Once you have gone through the book, you can repeat the process. Because new situations keep occurring, reading, sharing and discussing allows the principles to become part of your everyday interaction with others.  The principles help us learn from our mistakes, utilize the ongoing training with everyday challenges, and develop stronger family relationships.    

If you are constantly confronting people and facing strong resistance, Winning with People provides insightful knowledge and skills to create the change in us and in our relationships with others. When we make a conscious effort to improve our relationships with family and friends, then we make a life by what we give as Winston Churchill so wisely proclaimed.

 

Draw “It” Out

Every day decisions are made. Some decisions are simple while others are complicated. Nevertheless, making the “right” decision can be crucial.  This is especially true when developing our shared goals.  The task can be daunting.  Using an effective technique can be helpful to ensure our final decision is the best one for our purposes. That’s why I recommend, “Draw it out.”   

As children, we would draw and share pictures before we learned to write. In our mind’s eye we captured and created images on paper when we didn’t have the words.  This informal mode of communication gave clarity and meaning to others so they could share in the events of our life.

When faced with decisions today as adults, using a flowchart or decision tree can be extremely beneficial in seeing at a glance the options available.  Like a roadmap you can decipher which is the best route to travel once you examine all the advantages and disadvantages of each option.  Having a visual aid, like a flowchart or a decision tree, allows you to preview your decision the same way you preview a movie before you decide to watch the entire movie.       

 

Four Reasons to Draw “It” Out

We all have an “it”.  The word “it” appears abstract on paper while standing alone in print.  However, in real life, “it” represents “something” in your life.  You are confronted with a decision or problem which requires action.  How you proceed is often tricky.  Whether we are talking about an expansion for your business, an appropriate succession plan, or tax-planning strategy, there are consequences for every move.  Drawing “it” out allows you to…  

1. LET IT OUT. Our minds are so crowded and clouded by different perspectives and processes that our thoughts have a tendency to clash.  Different views and facts dominate logical reasoning, leaving us utterly confused.  The dialogue in our heads may go something like this: “We could do it this way.” “They suggested doing it that way!” “Now we don’t know which way is best.”  Drawing the various options on paper allows your ideas and thoughts to get out of “your head”.  

2. TALK ABOUT IT. Making decisions can affect many individuals in a family business.  When the options are drawn out in colour rather than “black and white”, then everyone who needs to be involved in the decision-making process can add insight and reasons why one decision is preferred over another.  Since no one can read your mind, putting your ideas and thoughts on paper is the next best thing.  

3. DEAL WITH IT. My Dad always used to say, “Don’t worry. Let the horse worry.  He has a bigger head.”  My Dad was right. The horse does have a bigger head.  However, this bit of advice didn’t stop people from worrying.  When you handle any problem, you are freeing yourself from worry. It’s your action that conquers the problem.  When you use a flowchart or decision tree, you are discovering possible solutions to your present day dilemma.  This strategy creates action steps to kill the worry and the problem.         

4. FIGURE IT OUT.  Quite often we can become so focused on using only one approach that we don’t allow other possibilities to enter our mind.   When you map out possible options you may be surprised to uncover others you never considered.  This brainstorming technique allows light to shine on other strategies to help with making a decision to proceed or not, solving a problem, or determining the best strategy.    

                             

Your “Decision Tree” doesn’t have to be “pretty” to be effective.  I believe the process of getting the job done is far more important than how the diagram looks.   If any tool or gadget can bring clarity to your situation and work to make your life easier, then you will be extremely happy and content in using it.  In my world, I find this is the case with these tools.  Consider MindTools® resources for Decision Trees or Flow Charts.  Get excited and pumped about working with these. If you are interested in other related resources, Mr. or Mrs. Google can provide value references.   

11 Considerations for Developing Shared Goals

David Bach wrote in his book, Smart Couples Finish Rich, that “a couple’s financial plan is a lot like a plane with two engines.  If both engines aren’t pointed in the same direction or working at roughly equal power, you are going to have problems.  Without teamwork, financial planning for most couples becomes a battle, not a victory.”

Similarly if the engines aren’t pointed towards mutually shared goals, you are going to have problems.  For a family business with multiple individuals, you can imagine the dilemma if business goals are not predetermined.   There are more than two engines with the capacity to help a business soar or crash into the ground.   Having shared goals is important to maximize the collective strength of the family to ensure not only their business goals are achieved but their personal and family goals as well.

Here are some thoughts to consider when creating your list of shared goals.      

(1) Working together towards a common goal is often achieved with commitment and collaboration to create a favorable outcome. Special projects and events bind a family together rather than tear them apart.  A good example is harvest when everyone is on board to get the crop in the bins.

(2) Understanding why a goal is important to the operation of the business is critical.  Family members are likely to take a shared interest in the goal if they see the value in the proposal.  “Why should we buy a new combine when the old one works just fine?” When everyone has a stake in the decision-making process, unity towards the shared goal is achieved.  

(3) Showing respect preserves your relationship even when opposing a person’s proposed goal.  You are not saying “No” to the person rather to the proposal. The proposal is not a shared goal if it doesn’t fit the overall plan of the operation.  Cultivating relationships built on honesty, trust, and respect are the nuts and bolts of a family business.  When family members understand the decision is turned down for business reasons, not personal, they are receptive.

(4) Making logical and rational points for a proposal based on the facts is helpful in the decision-making process.    Compromise meets in the middle.  A well thought-out project might not happen this year. “No” doesn’t entirely mean “No”. “No” may mean “Not now” but rather “Let’s plan for next year.”

(5) Keeping the business family informed helps everyone understand the present financial status of the operation. There’s a time to be frugal and a time to splurge. The key is knowing when the time is right to do neither.  When they are allowed to ask questions, like “Can we afford this tractor?” they have both an interest and a willingness to understand the practicality of the shared goal.  Their presence gives them a voice in the shared goals; otherwise they may feel excluded, resentful, and unwilling to show their support.    

(6) Understanding the commitment to the shared goal, both in terms of labour and finances, needs to be addressed.  “Do we have the resources to undertake a special project this year?”  “Can we adequately farm another section of land?”

(7) Having too many proposed goals creates confusion.   Setting time lines and establishing priorities are favorable for accomplishing goals in an agreed upon order.  Shared goals should never be seen as “your idea” or “my idea” but rather converted and renamed as "our ideas”.

(8) Seeking help from other advisors will provide clarity and direction on how and when to proceed with unique projects.  The logistics, both the pros and cons, are best analyzed by a professional.  A “second opinion” can also serve as a buffer when the discussions about shared goals are stalled. 

(9) Agreeing to disagree and stepping away may be the best solution if a shared goal cannot be established. Relationships are important. Keep a clear perspective on your expectations and your current reality.  These could be miles apart and play havoc with your emotions.  You can’t make someone do what you want done.  A good read is the book, Why Don’t You Want What I Want, by Rick Maurer.     

(10) Learning and understanding your family’s unique personality type and communication style will serve you well in negotiating your shared goals.  Reference to these need-to-know-and-understand traits was made in the blogs, What Colours Build You and How Did We Get It So Wrong.   Tweaking your listening skills will be an added benefit.  Read How Good are Your Listening Skills.

(11)  Hosting meaningful open meetings about shared goals begins with well-established rules. Jolene Brown, farmer, professional speaker, author and champion of family owned businesses, has a Code of Conduct for Your Farm Business.  She would gladly share a copy when you email her.  Your Code of Conduct identifies your values and expectations and sets the foundation for a strong and thriving business.

I wished I could say “communication is easy”. I would be fooling myself and you if I did. Communication becomes complicated when our emotions kick in. Emotions tend to get in the way of logic.  There’s a lot at stake when working with family members especially when establishing business goals.  I believe if you are sincere and trustworthy in your communication, loyalty, and love will prevail.   Setting aside egos and giving up control will open the doors to better cooperation. Then a sincere desire will emerge to create a soaring family business built on mutually-agreed-upon goals.

Please share what works the best for you to create "A Dozen Considerations for Developing Shared Goals."   

Lifestyle Costs “Missing in Action”

 



Are you like me? Do you cringe when you go shopping, wondering how much money you will spend?  You name it: food, gifts, laundry detergent, garden seeds, gas, or clothes.  We always need something and we always need money to pay for these things.  

The truth is that our purchases add up to a grand sum. Yet when people are asked how much money they need for their lifestyle, they are clueless.  This information always remains missing in action because we don’t track and tally up these expenditures. To further complicate matters, these small everyday items only make up a portion of our total lifestyle costs.  We haven’t begun to add into the equation the big ticket items, like vacations, appliances, furniture, or home renovations, to name a few.

When you operate a business, you are aware that business income is required for operating expenses, unexpected emergencies, and loan payments for land, buildings and machinery. You then need to consider the portion drawn from the business for personal lifestyle expenses.   Answering the critical question, “How much is enough?” can be tricky when aligning your lifestyle and income. 

At a recent Farm Succession Planning Seminar, Kim Gerencser, President of K.Ag Growing Farm Profits Inc., posed the obvious question:  How does your total lifestyle relate in proportion to your income?  Kim’s illustration below indicates that when your income is on the positive side and your lifestyle matches, you are a reflection of a “Rock Star”.  When your income is on the negative side but you choose a high maintenance lifestyle, then you’re obviously “Going Broke”.  When your income gravitates to the positive but you choose a low maintenance lifestyle, you’re perceived to be “Scrooge”. When your income remains on the negative side, matching your low maintenance lifestyle, then you are a “Martyr”. 

 

When looking at Kim’s descriptive chart, it is obvious that striking a balance between “Income” and “Lifestyle” is critical for everyone. It’s even more significant when you’re in business. In order for a farm business to thrive and survive, it’s a must to know the amount of your personal lifestyle costs.  In essence, you’re being asked, “How much can the farm afford to pay you?”  

Taking one step further, when the farm is transitioned to the next generation, the question is “How much do Dad and Mom need for their lifestyle?”  They are looking to be fairly compensated for their farm investment so they can live their dream retirement.  Reaching a compromise may seem like a “tug of war” in the negotiation process between the two parties, the retirees and successors. The starting point is knowing the parents’ lifestyle needs to quantify the amount of retirement income.        

Needless to say, some people are confused by an Estate Plan and a Succession Plan.  An Estate Plan details your wishes to allow for a smooth transition of your assets when you die. A Succession Plan primarily focuses on a smooth transition of leadership, management, and ownership of assets while the retirees are alive. The purpose of a Succession Plan is to determine how the owners will access the value they poured into the farm while their farm still remains viable for the next generation.   

To help with the creation of a successful succession plan, a set of guidelines was developed by the governments of Canada and Saskatchewan under the Farm Business Development Initiative (FBDI) program.  Discovering the answers to specific questions ensures a number of critical areas are addressed.     

 

 

One important component in a Succession Plan is “The Retirement Plan, a when, where, and how plan for the retiring couple”.  These questions must be considered:

A.    Can they fund their retirement?

B.    Describe the retiree’s future lifestyle.

C.    What housing is required? What is the capital cost? Where will this money come from to purchase/rent housing?

D.    What is the retiree’s projected annual cost of living including such things as food, shelter, utilities, medical, travel, taxes, etc.?

E.    Does this retirement plan address life expectancy?

F.    What are the tax consequences for this retirement plan?

 

This question keeps appearing, “What is the retiree’s projected annual cost of living?”  It’s evident we need “cash” to pay for our purchases, both our “needs” and “wants”.  The next question which begs an answer is “You can have anything you want in life, you just can’t have everything you want” so what do you really want?

 

Farmers are business people. Analyzing spending costs, both business and personal, is important to define your limits and whether inbounds or out of bounds.  Lifestyle costs can no longer be missing in action. We need to find the number. One simple tally of the personal debit transactions on your bank statement will tell the story so you can know for certain.       



Achieving Clarity with the Right Tool

If you believe Succession Planning is complicated, perhaps you do not have the right tool in your toolbox?  Working through the intricacies of your plan can be frustrating and complex.  The last thing you want to do is “quit”.     This tool, The Succession Map, might prevent you from doing just that.  Does this sound like a commercial?  You might be right but if it works and gets the job done … why not learn more about how it can apply to your situation.  

 

I learned about this effective tool from the course, Advising Family Businesses. Douglas Nelson, Senior Financial Planner, with Nelson Financial Advisory Service Corp, created this unique visual to navigate through the six-step process of creating a successful succession/transition plan.  I don’t believe this tool was meant to be a secret but judging by the few who know about its existence I wonder why it isn’t well known.

I like “clarity” every time I try to make a decision.  For me, “seeing a situation play out on paper” creates clarity.  Farmers understand that in order to get the grain, the wheat must be separated from the chaff.  When you are creating your succession plan, you need to sift through information to get to the heart of the matter (the wheat), the important issues. To do this, understanding your business begins with implementing the “Three-Circle Model”.

 

 

The Three-Circle Model refers to the three unique groups or systems which comprise your business:  the owners (or shareholders), the family, and the business. Identifying individuals with a vested interest in your business determines their respective roles and categories.  The stakeholders in a typical farming business may include Dad and Mom, farming and non-farming children, and hired farm employees.   Obviously, Dad and Mom will fall in all three categories while the non-farming child is only part of “The Family Group”.  

Once you know who’s who, the stakeholders, you will also have clarity in understanding who should be involved in making decisions in the respective groups.  Non-farming children would not partake in farm business decisions (The Business Group) but they certainly may be included in the discussions (The Family Group) clarifying the rules or standards for entering the business or owning shares. Dad and Mom (The Owner Group) may be the only owners but they are contemplating who else might be brought into the business as an owner and whether they are gifted shares or required to purchase them.

Each unique category in the Three-Circle Model has its list of values, objectives, and priorities. Once these are clearly defined, everyone will have a clearer understanding of the expectations of them and the business. Using a tool like The Succession Map allows open and honest conversations to take the emotions and stress out of awkward situations. The interesting paradigm about the circles is the fact that each group influences its counterpart.  Before they effectively operate in unison, you examine their components. What makes the family tick?  What are their family values? What are the family’s objectives?  Normally, it’s the family values which will coordinate and complement the business values.  

Farm businesses have been built on the hard work and sacrifices of their owners.  I know this from watching my parents.  Their farm was built as a result of hard work. They picked stones and roots by hand to have more cultivated acres.  They milked cows and raised pigs and chickens to create cash flow for their farm and modest lifestyle.  Their mixed farm operation pales in comparison to today’s large farm operations with their modern equipment and technology.  The bottom line is a farm business is a business regardless of its size.  Passing on the family farm business to the next generation is a tough transition because of its emotional connection.  Growing a business is like raising a child for the business owners.  True “sweat” equity in the farm comes about through hard work.  As an owner, you want to preserve the sweat equity which is why working through this succession plan is so critical.

 

The Succession Map’s step-by-step guide works through any conflicts, irons out details, develops ideal planning time lines, and outlines a specific action plan. When you have an easy roadmap to follow, you can’t get lost.  You might be stuck on some steps longer than you are on others.  The benefit of using this type of tool is that you can easily identify where you are stuck so you can get “unstuck”.

Now it’s your turn.  Can you see value in this tool? Can you see how this type of worksheet might benefit you?  Please share.