As I work with families wanting to build a legacy business, I
have many questions. It's paramount to clarify the intent and
commitment of the asset owners. It's paramount they train and
choose wisely who would respectfully and passionately continue the
business. It's paramount the owners do the legal and financial work
to assure the integrity of the business.
So, following are five key questions…and please know there are
Is your business worthy of transitioning?
Records are accurate, timely and transparent, utilizing
computerized systems. Key financial data, reports and up-to-date
expenses and income are available.
Sufficient net income needed to support all increases in
expenses of a growing payroll. (Increase in expenses is covered in
the projected cash flow, not in the net worth value of the
Financial security of the senior generation with assets separate
from the risk of the business allows for an easier transfer of
business responsibilities and assets. (Seek the advice of a
Certified Financial Planner to understand the needs and assure the
living and lifestyle deserved. Senior generation may need to keep
some business assets under their control for independent
Business structure is in place for liability protection and for
incremental ownership transition.
Buy-sell agreement is in place to assure the integrity of the
business so it might continue.
Risk management tools are in place for protection of assets and
Meetings are held and documented to fulfill compliance.
Personal wills and powers of attorney are completed. Shared if
the assets of the personal estate effect the continuation of the
Current leader models team leadership, confidently carrying out
responsibilities for both the farm business and for interpersonal
Leader positively communicates, coaches, praises, promotes,
hires and fires…and addresses and resolves conflict.
Leader has earned the respect and trust of family, work team and
Do you really want this business to continue as a viable
If yes, this clear decision directs the
transition of labor to new management, leadership and ownership. It
involves letting go of autonomous authority. It directs your
actions and the actions of others.
If no, this clear decision directs your actions
and others involved in the business. There will be no false
assumptions of the transition of leadership or ownership during
Have you mentored/trained the next generation for management
Who has the education, experience, talent, skills, character and
personality to lead?
Do you want that person to be the leader (organizational and
Does that person want to be the leader of the business
(organizational and relationship)?
Will others follow that leader?
Do those leading/managing the business have the assurance of
control so that they might manage and grow this business?
(Buy-sell) Or will they be reporting to the governance of
How will you lead and manage the transition so that you are
no longer the leader or manager?
Are you using a Farm Overview and Managing People Chart so that
you can document the different areas of the farm and make sure the
management of each is incrementally transitioned?
The "#1 Job" of a senior leader is to replace himself or
How will you transition ownership of the assets of the
Key advisors, including an estate attorney and CPA, are a must
and can offer you several options. They'll discuss structure,
valuation of assets, estate taxes, buy-sell agreements, fair and
equal, ownership transition and timeframe.
So, it's time for you to answer these 5 Key Questions. Then get
busy. Do the work of a legacy business.
Jolene Brown is a farmer, professional speaker, author and
champion for the family owned business. She's from West Branch,
Iowa, USA, and travels worldwide sharing leading-edge best
practices that have the power to increase productivity,
profitability and peace of mind. Her passion combined with her
fun-filled spirit and valuable information brings humor, hope and
helpful ideas to the people of agriculture. For more information
and to check out her speaking availability, contact her at Jolene@JoleneBrown.com, www.JoleneBrown.com
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