Presentation on theme: "Building for the Successful Transition of Your Agricultural Business EMPOWERMENT THROUGH EDUCATION David Marrison, Extension Educator, Ashtabula County."— Presentation transcript:
Building for the Successful Transition of Your Agricultural Business EMPOWERMENT THROUGH EDUCATION David Marrison, Extension Educator, Ashtabula County Donald J. Breece, OSU Extension Farm Management Specialist Barry Ward, OSU Extension, Leader for Production Business Management Chris Bruynis, Extension Educator, Wyandot County Transitioning Your Family Farm
Building for Ohio’s Farm Future Age of Ohio farm operators is increasing. Ohio Ag Manager Team began in 2004 to provide farm management outreach for Ohio farms and agribusinesses. Requests made for transition planning assistance from clientele to Ohio Ag Manager Team and State Dairy Team.
A Question for Ohio Farm Families “Do I want to pass my farm operations on to my heirs as an ongoing business or do I want to pass it on as a group of assets?”
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.
North Central Risk Management Education Center gives a boost to Ohio’s transition planning team
OSU Extension Transition Project Team David Marrison, OSU Extension - Ashtabula Co. Chris Zoller, OSU Extension - Tuscarawas Co. Dr. Don Breece, OSU Farm Management Specialist. Barry Ward, OSU Extension Leader, Production Business Management. Jeff McCutcheon, OSU Extension - Knox Co. Chris Bruynis, OSU Extension - Wyandot Co. Mike Gastier, OSU Extension - Huron Co. Julia Woodruff, OSU Extension - Ashland Co. 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.. Transitioning Your Family Farm
Resources Developed Participant notebook of materials, case studies, and teaching outlines Teaching Power-points OSU Extension Fact sheets Revised “Transferring Your Farm Business to the Next Generation” Bulletin
OSU Fact Sheets Developed 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:
Revised in 2007
Bulletin Chapters Part 1 How can you tell that your 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 ?
Workshop Collaborators 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. Robert Moore, Attorney at Law, Wright Law Co.
Workshop Outline Day 1 An overview of transition planning Assessing the foundation of your business Financial considerations in transition planning Assessing the strengths, weaknesses, opportunities & threats to your business Developing business & personal goal setting Family business communication Management transfer to the next generation Sessions were held from 9:00 a.m. to 4:30 p.m.
Workshop Outline Day 2 Order of transition for tangible assets Organization structures & strategies Retirement Planning & Tax Management Treatment of on and off-farm heirs Buy/Sell Agreements Trusts Life Insurance Legal Q&A Sessions were held from 9:00 a.m. to 4:30 p.m.
Workshop Results 35 participants in the “practice” workshop in Ashtabula County (far northeast Ohio). 105 participants in the four regional workshops. 22 Extension Educators attended the workshops (train the trainer). Another 150 farmers participated in mini- sessions held across the state in Will offer two regional workshops in 2008.
Evaluation Questions Plan to hold an intergenerational meeting…96% Plan to meet with an attorney... ………..….89% Plan to meet with an accountant…………...76% Farms with 1,000 acres plus………………..35% List of most important items learned: Communication, Family Business Meetings, Planning, Structure, Taxes, Transfer Strategies
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? Trusts 38% Business Transfer Strategies 38% Financial Issues in Transfers 37% Tax Issues in Transfers 32% Buy-Sell Agreements 29% Transition Planning 22% Developing Skills in Next Generation 17%
For More Information David Marrison OSU Extension-Ashtabula County 39 Wall Street Jefferson, Ohio