Building for the Successful Transition of Your Agricultural Business-

Workshops and ResourcesDonald J. Breece

Farm Management SpecialistBarry Ward, Leader, Production Business

Management

Breece.2@osu.edu

Transitioning Your Family Farm

Thanks

Funded Grant Sponsorships

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.

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

Transitioning Your Family Farm

Host Extension Educators (Agents) helped to recruit!

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. 

WorkshopsThe 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.

 

Transitioning Your Family Farm

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.

 

Workshop Outline

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

Sessions were held from 9:00 a.m. to 4:30 p.m. 

How do we develop managers?

• Plan• Organize • Staff• Direct/Coach• Control/Monitor

Five functions of management

Resources DevelopedRevision 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.

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/

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 Strategies95 Participants in each of four workshops, another 85 in two additional day long programs (Legal, Financial and Taxes).

Average Score and Standard Deviation of Knowledge Before the Program

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

The fu

nctio

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f man

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t is tr

ansit

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The w

hole

farm

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proc

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a m

ission

stat

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Inte

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f the

bus

iness

Use o

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WOT a

nalys

is

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for t

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usine

ss

Financ

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Impo

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Impo

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Busine

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Busine

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s

Financ

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Handli

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on-b

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ss fa

mily

Trusts

Buy-s

ell a

gree

men

ts

Life

Insu

ranc

e

Retire

men

t opt

ions

Tax is

sues

Average Score and Standard Deviation of Knowledge After the Program

0

1

2

3

4

5

6

The fu

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Wha

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Tax is

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Change in Knowledge

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

The fu

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Averaged a 1 point change of a 5 point scale!

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!

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%