Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Managing for Today and Tomorrow
Succession PlanningSession Four
Block Two
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Succession Planning
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Objectives• Constructing a Succession Plan• Review tools• Tie together the tools used in a transition plan• Planning the transition plan• Discussion of barriers• Action plan – Your transition plan
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Constructing a Succession Plan• Planning for the gradual shift in management
from one generation to the next• Shifting ownership of the assets involved from
generation to generation• Anticipating events that could disrupt
management and ownership succession
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Building a Management Team• A team approach• Developing management skills• Cross training • Develop a functioning and effective system of
routine communications• Implementing a non-threatening evaluation
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Developing the next generation of managers?
“The final test of greatness in a CEO is how well he
chooses a successor and whether he can step aside and let the successor run
the company.”
Peter Drucker
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Turning Over Control• Start early to learn each potential successor’s
capacity• Successor may be in-law, grandchild, or neighbor• Ask yourself, “can I live with their decision”• Give control over different sectors of the business
so the next generation can master each one independently.
• Rome was not built in a day – your successor’s transition into control should be gradual (but not so gradual that they lose interest)
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Power Issues• Who controls decision making• Decision making control should be secondary
to the quality of the decisions• Decision making under alternative scenarios
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Anticipated Disruptions• The 5 D’s review– Death, Disability, Disaster, Divorce, Disagreement
• Legal risk and other liabilities
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Assuring Fair Compensation• Address compensation for labor, management
and capital contributions– Especially younger generation members with little
or no decision making power
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Valuing Ownership Interest• Ownership interest on a fair and equitable
basis • Review process for establishing ownership
interest
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Protecting Minority Owners• Minority owners should be protected from the
harshness of majority rule
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Encouraging Phased Retirement• Encourage older individuals to retire– Level of compensation– Access to retirement benefits– Reduced-responsibility positions on the
management team
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Are plans being made for retirement?• When do you wish to retire?• How much $ will I need in retirement?• How is and how will the family business help
for retirement?• What additional retirement sources are available
to each family member?
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Succession Plans• Depends heavily on the personal chemistry of the
individuals involved• The underlying success of any business agreement
depends on healthy family relationships • More two-generation family business
arrangements fail because of poor family relations than any other reason
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Tools• Succession Planning• Estate Planning• Business Planning• Retirement Planning
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Asset Transfer
Estate Plan
Farm/Ranch Transition Plan
Transition Plan
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Transition Plan
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Withdrawal
Beginning
EstablishedCommitment Testing
End
Transfer Stages
Transfer Process
Child
Pare
nt Divide IncomeTransfer Management
Transfer Ownership
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Barriers Discussion• What are some of the barriers you have
discovered in reaching a decision to transition the farm or ranch business or pass a set of assets to the next generation.
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Your Action Plan• Family Meeting Date: _________• Goal Setting Date: _________• SWOT Analysis Date: _________ • Management (Advisory Team) Date: _________• Decision point Date: _________– Transition plan _________– Asset distribution _________
• Transition Plan Date: _________
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Resource Materials
Managing for Today and TomorrowBusiness, Succession, Retirement and Estate Planning for Farm and Ranch Women
Managing for Today and Tomorrow• Presenter• Address• Phone• E-mail