Woodbury:Farm Family Business 05/06 06:46
Invest in Your Legacy
Your family's future is uncertain, but you can shape the backstory for
generations to come.
By Lance Woodbury
DTN Farm Business Adviser
We often consider management succession and estate planning in terms of the
next few years. For example, who will take over the business for you or your
parents? How does your estate plan position asset ownership with your children?
These are important questions that provide certainty and a sense of continuity
for the family and business in the relatively near-term.
But if you start to think about your legacy, the conversation feels more
permanent. What will you be remembered for decades after you are gone? What
impact will you have on future generations, not just your children? Such
questions go beyond the current business model and legal documents; they speak
to your long-term influence on those closest to you.
In their 2010 book, "Family Legacy and Leadership," Mark Daniell and Sara
Hamilton observe that families who are able to preserve wealth contemplate an
"unknown future" and make strategic investments in family culture that will
benefit generations that haven't yet been born. Consider the following
investments you might make as you envision your legacy.
INVEST IN TELLING YOUR STORY
How many of your family know the backstory of how your business or asset
base came to be? Helping people understand your history gives them an
appreciation for the hard work and sacrifice that were made before you. Who
contributed to making the family business what it is today? What were the
crucial decisions or lessons learned? What hardships or losses did your family
face? Knowing family history can foster a sense of stewardship and recognition
that the assets or business are bigger than any one person in the operation.
INVEST IN ARTICULATING YOUR VALUES
If you've been successful -- however you define success -- it's due in part
to how you do businesses. For example, the way you treat others, approach
learning, make tough decisions, even how you handle leaner times, are all
behaviors based on a set of core values. What you believe and how you act on
those beliefs creates your unique approach to doing business. I know one
operation where the value of being transparent in business dealings has led to
significant new revenue opportunities because it elevated the trust of their
landowners and business partners. To help future generations deal with an
unknown future, take the time to identify and give voice to the values that
guide your dealings with others.
INVEST IN EXPRESSING YOUR EXPECTATIONS
Some families believe keeping wealth together is worth some discord in the
family, due to the tax and operational efficiencies, the ability to quickly
take advantage of opportunities and the potential economies of scale. Other
families believe conflict over management or ownership issues is potentially
too dangerous or volatile both for the family and the business. They will tend
to minimize the conflict, even to the extent of letting family members out of
the business. Some families believe you should distribute minimal earnings,
while others see no problems with bigger distributions that allow people to
enjoy the fruits of current success.
What are your guideposts to help future family members make decisions
together? What are your expectations for how people should handle the business,
deal with wealth, or include in-laws? While there is no guarantee that future
generations will follow your expectations, there is a good chance that
thoughtful, mature and responsible family members will look to your directives
as one set of lights that help illuminate their forward path.
Among the most important assets you have to insure a positive future is your
time; time to think, discuss and plan. The time you invest in telling your
story will cultivate appreciation. The time you invest in articulating your
values will guide behavior, and time spent expressing your expectations will
help chart a course for the future.
Editor's Note: Lance Woodbury writes columns for both DTN and our sister
publication, "The Progressive Farmer." He is a Garden City, Kansas, author,
consultant and professional mediator with more than 20 years experience
specializing in agriculture and closely-held businesses. Email ideas for this
column to Lance@agprogress.com
Copyright 2015 DTN/The Progressive Farmer. All rights reserved.
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