Lentsch: Make succession planning a priorityHave we planned for the future beyond next year’s crop? Notably, do we have a strategy to transition the family business to the next generation?
By: Lucas Lentsch, Agweek
Another South Dakota autumn is drawing to an end with farmers and ranchers taking inventory of the year’s harvest. Agriculture folks know that sometimes fall brings an abundant harvest — and other times that crop of calves or corn comes short of our goals.
With our crops just out of the field, we’ll begin planning for next year — choosing inputs to achieve yield goals and genetics that will produce pounds of gain. During this planning time, we should also take inventory of our lives. Have we planned for the future beyond next year’s crop? Notably, do we have a strategy to transition the family business to the next generation?
Earlier this year, a friend of mine passed away after months of battling illness. In his lifetime, this friend had built a very successful agricultural enterprise, and yet during these months, there was hardly a word of worry spoken about his diverse and productive business.
I wondered at the calmness about him and his family. Were they not concerned about the future? Then I discovered they had already made a plan that transitioned the business. Although my friend was young — just in his early sixties — several years ago with his family at the table and professional expertise beside him, he had taken action on the task of succession planning. Now, his family has comfort in knowing his wishes and activating a transition plan.
If your family has done this challenging work already, congratulations to you for making it a priority. If succession planning has been on the “to do list” for some time — make it a priority. Don’t wait any longer. Now is the time to plan.
Recently, I heard from a number of agricultural lenders who shared their concern regarding customers who hadn’t done the planning for one reason or another. Unfortunately, untimely deaths happen in families, which make the task feel unbearable.
If you feel that succession planning does not need to be a priority, ask yourself this. For the youth, do you want to be your dad’s 50-year old hired man? For the parents, do you want your children to work with you — or for you? What will happen to your business — your decades of work, sacrifice and success — if you don’t plan for “what if” situations in the future?
I recently facilitated panel discussions at our Beginning Farmer/ Rancher Symposium on the campus of South Dakota State University. Several times, the next generation producers asked for suggestions on succession planning.
Take the first step. Ask your lender, accountant, and lawyer for recommendations of whom to work with. There are a number of professionals that do this sort of work; however, it is most important that you find the one that works for you and your family. I encourage you to plan now. Do not wait.
Editor’s note: Lentsch is the South Dakota secretary of agriculture.