As a farm family coach over the past nine months of the Great Pause, many young farmers have reached out looking for tips to get their parents to talk about what the future holds for generation one and generation two.
Procrastination and conflict avoidance are the root of the issue for many stuck farm families. Here are some strategies to help get succession planning started:
1. Act. Decide you are no longer avoiding the tough conversations. Are you willing to be the driver to call the family together to meet? The first step is to decide you will no longer accept silence from your parents or siblings. Listen to Dr. Henry Cloud’s audio book on Boundaries, and his book Necessary Endings. Both are powerful motivators.
2. Think. Talk to yourself first about what you really want. Then check out the same issues with your spouse. If everyone is not in agreement as to what they each want for future roles on the farm, then you will have to work hard to negotiate a more workable vision. Be clear about your intent and “why” this is so important for you to get talking and discovering your future now. Say: “My intention is …”
3. Ask more powerful questions to kick-start the conversation. “Do you remember what it felt like when you first owned land? I am curious if we could sit down and explore ideas on how I can get some equity before April 2021 on this farm. I want to be more than an employee.” Dates are targets to aim for; certainty of agreements and timelines is what you really want.
4. Document. COVID-19 has been a reality check for the farmer who said, “Elaine, if I get sick and die, the farm will be in chaos.” Get a will, an enduring power of attorney and guardians for your children. Make sure your executor is fully informed. As you go through the succession planning journey, you will change the estate plan (your will), but get a will now. Lawyers can work with you virtually, and witnesses can sign digitally.
5. Be curious. Stop telling yourself it is disrespectful to your parents or greedy to ask for what you need for your young family. Come from a position of “I am curious, Dad, how do you want your role to change on this farm as you age? I am seeking a way to build my own equity. What do you need?”
6. Face fears. Address the bull in the middle of the room, what I call the “undiscussabull.” Parents are afraid of failure, loss of wealth, conflict with the non-farm heirs and loss of identity or purpose as they age. Love does not read minds, so ask gently and graciously, “What is hard for you to talk about? I am here to listen and understand.”
7. Collect data. Know what you need for family living and where your income streams are coming from. Have financial transparency between the generations. Share the amount of debt you are willing to service or transfer to the next generation. Understand how much debt you are willing to sleep with and what you are willing to buy out. Some assets will be gifted, but young farmers need to be clear about how much debt they can service. Have your accountant, lender or farm business adviser confirm the viability of the operation, knowing cash flow and the number of families the farm can support.
8. Prepare your ideal business plan for the farm. What is your vision? On our farm, generation one wants to slow down but still be active in the decision-making process, and generation two wants to build more efficient systems.
9. Explore what if? What if we block time once a month for two hours to talk about our succession journey? Stress the importance and benefits to all generations. Dr. David Kohl’s research showed that farms with regular meetings were 21% more profitable.
10. Meet. If the thought of meeting scares you, then hire a third-party facilitator to prepare each person for the meeting. In 2020, these meetings are done online through video chat platforms. Advisers have seen many creative solutions; they can keep the conversation safe and respectful.
11. Buy a flipchart and find a stuffed toy. You need a visual spot to land ideas and process thoughts. The toy is your talking stick for people to speak at the meeting without interruption. As you record notes on the flipchart, use smartphones to capture the pages when the meeting ends, and you have action steps recorded for the next meeting.
12. Explore residence options. Housing is a big source of conflict. Promises are made to switch houses, then things change or a sibling comes to live close to generation one. Be really clear that you understand the timelines and expectations for the residence needs of all generations. If mom wants to move and dad wants to stay put, things will be stuck for a long time.
13. Copy success. Conflict resolution is a business risk management strategy. Share the stories of good transitions, knowing you are not alone in your current struggle, but the hard work is worth the reward of a workable succession plan to create certainty for everyone’s future.
14. Build your binder or use Google documents to organize the many plans you need to talk about: lifestyle income, legal, accounting, meeting action plans, business plans, coaching communication, estate, loans, etc. I have created a “Life” binder with passwords and Maggie Van Camp’s “Because I love you” list. The binder is a great place to jot down your dreams, thoughts and frustrations as you create solutions for the life you’ve always wanted on your farm.
Income streams, housing and fairness to non-farm heirs – getting insight on those three big questions will keep your succession planning going. Remember, it is a journey. Talking is the work.
