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3. 2018 Extension Risk Management Education National Conference

Managing Transitions through the Business Life Cycle

James Hafner and Kathyrn Ruhf

Summary

Far too few farmers adequately prepare to transfer their farms, and to transition out of farming. Many address succession too late in their farming career, often in crisis mode, resulting in family strife, financial insecurity (if not disaster) and risk to the future of the operation and the land. In fact, transition planning should happen throughout the business life cycle. Most succession planning tools and curricula target producers toward the end stage of their career. Timely and focused attention to planned as well as unexpected transitions from the operation's start-up is a risk management practice that is not sufficiently emphasized.

This presentation centers on business life cycle transition planning as conceived by Land For Good, a nonprofit specializing in farm access, tenure and transfer. We will share our framework to help farmers plan well for their exit from farming due to age or other circumstances. This framework provides a guide for farmers, and the service providers that work with them, based on the operator's age and stage of farming. It offers a new way to integrate standard risk management recommendations with other business practices, from starting retirement savings to grooming a successor, from job descriptions to insurance to asset transfer, all with the goal of nurturing a proactive, integrated orientation toward transition planning from the beginning of, and throughout a farmer's career. The presenter welcomes discussion about this creative and innovative risk management tool.

Details

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