Air January 26, 2005

Thank you Jerry, and good morning everyone. Would anyone else mind if maybe we moved the nasty weather to the middle of the week and the good weather to the weekends?

One of the biggest challenges to the family farm, or even to a nonfarm family business, is how do you pass the business from one generation to the next. In general only 30% of all family owned businesses successfully transfer to the second generation, 15% make it to a third generation and only 5% make it to a fourth generation. Granted, sometimes the next generation wants no part of the family business and some owners would just as soon that their kids not go into the family business. But for those where the current generation and the next generation both want to see it happen, it can be a big challenge and hurdle to accomplish it. All too often too much time is spent worrying about estate planning and preparation rather than true transitional or succession planning. The two are not the same! There are a lot of things that the family farm members need to spend some time doing. But it's things like writing vision statements and mission statements and these kind of things are what we leave to the WalMart or Microsoft corporations. In farming we talk about equipment repairs and land purchases and livestock management. What it all boils down to is does everyone involved have the same goal? And until we get some communications going no one is going to know. So writing a vision statement and a mission statement, while sounding overwhelming, is simply the first step in starting the communication process that will be the first step in the business transfer. You see more times than not we spend time thinking about what resources we have and what can we do with them. When we do this, we trap ourselves in an ever-shrinking box. But if we start with the desired outcomes and then determine what it will take to get us there, the possibilities become almost endless. Yes, it may mean some scary changes and stepping way outside of tradition and what "we've always done", but that's the big difference between the companies that made it and the so many more that didn't. If this is a journey you want to start down, there's help out there. I can't do it all for you, but I can help you get the trip started!

This is Chuck Otte, Geary County Extension Agent, with Ag Outlook 2005.

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