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Building for the Successful Transition of Your Agricultural Business- Workshops and Resources

Transitioning Your Family Farm. Building for the Successful Transition of Your Agricultural Business- Workshops and Resources. Donald J. Breece Farm Management Specialist Barry Ward, Leader, Production Business Management Breece.2@osu.edu. Funded Grant. Thanks . Sponsorships.

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Building for the Successful Transition of Your Agricultural Business- Workshops and Resources

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  1. Transitioning Your Family Farm Building for the Successful Transition of Your Agricultural Business-Workshops and Resources Donald J. Breece Farm Management Specialist Barry Ward, Leader, Production Business Management Breece.2@osu.edu

  2. Funded Grant Thanks Sponsorships

  3. Transitioning Your Family Farm What is transition planning? • Farm transition planning is the process by which the ownership and the management of the family business are transferred to the next generation.

  4. Transitioning Your Family Farm Why Should a Farmer Attend • You know that you need to take time for developing a transition plan for your farming business...How about a 2 day workshop retreat? Who Should Attend?  • Any family business that would like to transfer their business to the next generation.  • Several members of the family business, from different generations Host Extension Educators (Agents) helped to recruit!

  5. Now is the time to get started! To spend time away from the distractions of everyday farm life, and critically review your business. To learn farm business transfer strategies and how to implement them. To discover ways to increase family communication.

  6. Transitioning Your Family Farm Workshops The two-day workshops were designed to help farm families develop a transition plan for their family business. The sessions challenged participants to examine their business to the core and to actively plan for the future. The workshop retreats were conducted at four locations in Ohio. Two of the workshops included an overnight stay. The workshops were conducted by Ohio State University Extension and supported by a grant from the North Central Risk Management Education Center and USDA.

  7. Teaching Team Dr. Bernie Erven, Professor Emeritus of Agricultural Economics at The Ohio State University Paul Wright, attorney at Law and former OSU Extension Ag Law Specialist. Dr. Don Breece, OSU Farm Management Specialist. Barry Ward, OSU Extension Leader, Production Business Management. OSU Extension Educators: David Marrison, Ashtabula Co. Chris Zoller, Tuscarawas Co. Jeff McCutcheon, Knox Co. Chris Bruynis, Wyandot Co. Mike Gastier, Huron Co. Julia Woodruff, Ashland Co.

  8. Day 1 Overview of Transition Planning Objectives of Succession Planning Financial Considerations SWOT Assessment Goal Setting Communications Day 2 Retirement Planning & Tax Management Business Organization Treatment of Off-farm heirs Buy-Sell Agreements Trusts Legal Q & A Workshop Outline Sessions were held from 9:00 a.m. to 4:30 p.m.

  9. How do we develop managers? • Plan • Organize • Staff • Direct/Coach • Control/Monitor Five functions of management

  10. Resources Developed Revision of Extension Bulletin: “Transferring Your Farm Business to the Next Generation” Part 1 How can you tell that you business is profitable enough? Part 2 Are there enough income and assets to provide for the older generation? Part 3 How can you help the two generations get along? Part 4 What should you transfer? In what order? Part 5 How to avoid paying too much income, gift and estate tax? Developed a participant notebook of materials, case studies, and teaching outlines.

  11. More Resources Nine Fact Sheets • Farm Planning Process Model • Planning for the Successful Transition • Develop a Useful Mission Statement • Developing Goals • Developing the Next Generation of Managers • A Comparison of Business Entities • Tax Characteristics of Business Entities • Starting, Organizing and Managing on LLC for a Farm • Using Liability Limiting Entities to Manage Liability Exposure for Ohio Farms Soon to be on OSU Extension’s Ohioline: http://ohioline.osu.edu/

  12. Evaluation Questions • Plan to hold an intergenerational meeting 96% • Plan to meet with an attorney to develop… 89% • Plan to meet with an accountant… 76% • Farms with 1000 acres plus 35% • List of most important item learned: Communication, Family Business Meetings, Planning, Structure, Taxes, Transfer Strategies 95 Participants in each of four workshops, another 85 in two additional day long programs (Legal, Financial and Taxes).

  13. 2.1 - 3.5

  14. 3.4 - 4.6

  15. Averaged a 1 point change of a 5 point scale!

  16. Most Important Items Learned • Communication is King • Family Business Meetings/Goal Setting • Aware of more Dimensions, Problems, and Complications than was aware before • LLC business structure and Trusts • “That we are Businessmen as well as Farmers” • You can not start early enough!

  17. What Additional Information Would Participants Like? • Business Transfer Strategies 38% • Trusts 38% • Financial Issues in Transfers 37% • Tax Issues 32% • Buy-Sell Agreements 29% • Transition Planning 22% • Developing Skills in Next Generation 17%

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