“My father always told me that the most difficult thing for him to do was to allow me to make mistakes,” says Glenn Newcomer, Ohio farmer. “It’s very difficult to hold your tongue when you see the younger generation making a mistake that you already addressed when you were younger. As I get older, that resonates with me a little more.”
He’s getting practice holding his tongue as his farm works through the next generational shift—to generation No. 6. Glenn’s son, Jason Newcomer, joined the farm in 2015 and is taking on more responsibility each year. All the while, Glen is keeping his non-farming children in the loop, communicating with Jason and working closely with lawyers and accountants to ensure the eventual transition goes as smooth as possible.
There are three basic ‘rules’ to working through a farm transition you’ll want to follow, according to accounting and law experts.
- Communicate. “If you’re not transparent you’ll have problems because stakeholders don’t know what the big picture is,” says Ryan Brinegear, lawyer who works with the Newcomers. “Transparency is always the most important process involved in legacy planning. Communication is very important generation to generation.”
- Articulate Goals. “Remember it’s not just the goals of the current management team,” says Tyson Stuckey, accountant for the Newcomers. “It’s the goals of the next generation, too.”
- Revisit the Plan. Your legacy and succession plan shouldn’t be a document that gathers dust on the shelf—it should change and evolve with the farm. When you add new ventures, those need to be accounted for. When family members make changes, the plan needs to be reviewed.
“Typically, businesses struggle going from the second to third generation—only 30% of family businesses successfully transfer from second to third,” says Amy Wirtz, family business consultant. “Beyond third it goes below 13%.”
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Plan ahead, communicate, articulate goals across all generations and stakeholders and keep your plan a living document.