Blog Series: Part 1 of Farm Succession Planning
PASSING YOUR FARM TO THE NEXT GENERATION
This is the first part of a 3 part blog series full of valuable information pertaining to farm succession planning.
The United States depends heavily on family farms to provide much of the meat, dairy, and produce that makes its way to our tables. According to the US government, 98% of farms in our country qualify as family farms, and very few of those have succession plans in place. Whether your family business started with you or has been around for generations, you’ve likely dreamed of seeing your children and grandchildren continue your legacy. A successful generational transfer takes careful planning and a long-term commitment.
Today, 70% of the hundreds of thousands of family farms in America are set to transfer hands within the next few decades. Without clear succession plans, those farms face an uncertain future. To keep your business running smoothly through the transition from one generation to another, preparations should start much earlier than you think. You want the next generation of people who farm your land to be motivated and passionate about keeping up your family legacy, and that doesn’t happen overnight.
The first step
We know what you’re thinking. How do you instill in your children the years of wisdom and knowledge you’ve gained over a lifetime on the farm? Our answer: the same way you learned it. You didn't learn the ins and outs of your business from a textbook or a youtube video, you learned it from first-hand exposure. From hard work and getting your hands dirty. There is a lot of good that comes with a formal education in farming, but the passion and commitment it takes to keep a family business running for decades or even centuries comes from first-hand experience.
The more experience, the better
Invite your children into a deeper understanding of your business. From manual labor to sales and marketing, involve them in the inner workings of your farm and allow them to work their way up. Just like you, they should know every step of your processes and be able to execute them properly. This may take years of training, but in that time you and your child will understand more clearly whether this is the right path for them.
Farm businesses aren’t for everyone, and that’s ok
You know better than anyone that not everyone is cut out for this business. Establishing honest communication between you and your children about their interest in your family business is critical to sustaining it. Passing a generations-old family farm to an adult-aged child who is not interested in or prepared for ownership could cost you time, money and more importantly, family relationships.
Gain outside experience
Once your child expresses interest in becoming an owner in your family farming business, encourage them to gain as much outside experience as possible. Conferences, seminars or even working at another farm for a period of time can all be beneficial. Growing up in a business can give you a narrow view of how it works and how it ought to work. This is how the “we’ve always done it like that” predicament comes into play. Don’t get us wrong, there are aspects of your business that have been honed over generations that work just as they are. But, as trends in farming and business evolve, exposure to new ideas and opportunities will help your business thrive in ever-changing times.
We often hear from family farmers who feel the pressure of sustaining their business for the sake of their family legacy. We know how important that is to you, and we also know that proper succession planning doesn’t happen overnight. If you desire to see your family farm persist for years to come, it’s never too early to start training up the next generation for leadership.
Farm Credit of Central Florida provides financing for Farms, Homes, and Land. Call us today at 863-682-4117!