“Having a whole-farm business plan in place helps you stay true to your vision and the mission of the operation,” he says.“It helps you stay on course and not get lost in the weeds of not having a plan, especially when you’re facing big stressors like crop failures or tractor engines going down.” A whole-farm plan encompasses the breadth and width of your farm family’s business.
“It also helps develop plans for the financial, marketing, personnel, and risk-management sectors of the business.” This analysis could also examine the strengths, weaknesses, opportunities, and threats in each of these areas.
This plan identifies retirees’ needs and the role the farm plays in meeting these.
It encompasses both the transfer of assets and the transfer of managerial control.
It describes how the retiring generation will transfer their knowledge to the younger generation, and how and when managerial responsibilities will be transferred.
“Farm estate planning determines how your farm’s assets will be distributed upon the death of the principal operators,” he says.
Investments vary widely by family and farm, typically comprising land, machinery, and livestock. Determine how these investments affect future needs.A business analysis takes stock of available land, labor, capital, management resources, profitability, business structure, operating procedures, and employee management.“After taking a snapshot of where the farm business is currently, the family business team should develop key goals for the future,” says Marrison.At monthly family meetings, you can look back at the goals you set in each major area of planning.Reviewing goals keeps them in focus, even though you might not be able to act on them until a future date.” In each planning area, work into the plan a what-if scenario.“You might say it gives a perspective of the operation from a distance of 30,000 feet, as opposed to a view from 10 feet away,” says Marrison.A whole-farm plan addresses a broad spectrum of components, such as family values and goals, a business analysis and business goals, a business plan, retirement plan, transition plan, estate plan, and investment plan.“Setting goals establishes a plan of action for each area of business activity,” says Marrison.“Set measurable goals that are short, mid, and long term.“Retirement plans should be established early for all members of the business,” says Marrison.“The profitability of your farm should be such that a family member can retire and not adversely affect the financial position of the business.” This describes how your farm will be transferred to the next generation.