In this episode, Topcon's Dan Hendricks meets with family consultant and author, Jolene Brown, to discuss the complex and difficult conversations of farm transition, and the important steps needed to ensure the farm business and family might continue.
In this episode, Topcon's Dan Hendricks meets with family consultant and author, Jolene Brown, to discuss the complex and difficult conversations of farm transition, and the important steps needed to ensure the farm business and family might continue.
Welcome, welcome, welcome to the Top Con Talks Agriculture podcast. We have a big episode for you today and I'm thrilled that you have taken the time to listen and, uh, I know that you won't be disappointed. My name is Dan Hendricks and I am your host for today. I serve as a senior business development manager for Topcon Agriculture. I get to work with an amazing team of talented individuals who love agriculture. They enjoy technology, and they strive to help farmers and growers find solutions. I'm excited for today's podcast for a lot of reasons. It's a very applicable topic for many farm families and we have an incredible guest to share her insight with us today. In today's episode, we are talking about the importance of farm succession. And let me say this, farm succession is tricky. It's difficult, uh, maybe even stressful, but it's very, very important to farms and farm families. And we are very fortunate today to have a very special guest who I'm very excited about. Someone that many of you in the agriculture community may already be familiar with. Her name is Jolene Brown, and Jolene is a spokesperson and a champion for people in agriculture. She's a farmer in eastern Iowa, contributor to successful Farming magazine, an author of two books, one entitled, holy Crap, I Married a Farmer, which is a great, great title. And the second is sometimes you need More than a two by four. So, hello Jolene and welcome to the Topcon Podcast,
Speaker 2:The greetings to you and to those who are listening, I couldn't wait to be part of your programming.
Speaker 1:Oh, well we're excited to have you. So excited. And for our listeners, Jolene, tell us a little bit about yourself. What inspired you to become a family consultant to farmers?
Speaker 2:Well, I've been professionally speaking since the eighties. And at that time our interest rates got into 20% and we lost 63% of our net worth. So the haunting words that came down our country roads were bankruptcy, foreclosure, suicide, and even murder. So, you know, it's an eye opener. We were living through that time as well on our farm. And what I knew I had to do was to help people build an internal net worth when their external one is gone. So that put me in a lot of media, so many venues to speak, and that just continued. But as I would attend all of these agriculture meetings as their speaker mm-hmm.<affirmative>, just about every other program was about production. I mean, we are superior at production. We can go just about anywhere and learn about weeds or seeds or breeds or feeds or even money machinery marketing. But we're crappy with people<laugh>. It's the people that do all the production. It was also the people that was the roadblock that we're keeping others up at night. And so I decided that I needed to focus on the human side of agriculture.
Speaker 1:Oh, well that's fantastic. And, and Ed and I agree with what you're saying, um, as, as amazing as farmers are, you know, today we're talking about something that's near and dear to them with farm succession. And um, I do agree that that is a very tricky thing. Farmers are good at lots of things, but sometimes this, this whole topic of planning, it's very complicated. It's difficult, it's tricky. And uh, but I think as you will attest, as we hear more from you, it's very, very needed for our farm families. So let's jump into today's topic by discussing family farms, the business and the lifestyle. The family farm links the past and the present and the future. So you have children that are working for the parents. Sometimes you have parents that are working for their children. And since the farm is the outcome of their work and dedication, they have a sense of enormous pride in in their farm, which, which they should, all of which is a very good thing. But it's complicated and it comes with some potential pitfalls. And the plan for succession and handing down the farm assets to fatally members can be rather difficult. Um, so with all these family dynamics and equipment and land resources to consider and the financial position to consider the best way to transfer a family farm varies from farm to farm, I think we would all agree with that. And there is a myriad of decisions that have to be made. So, Jolene, let me start with the question. Is there a right time for family farmers to begin discussing their transition plan?
Speaker 2:Well, you know, I get all types of questions and phone calls and interactions and I had an 80 year old man say to me, you know, Jolene, someday I ought to be turning something over to my boy. His boy was 60<laugh>
Speaker 1:<laugh>.
Speaker 2:So, so is there a right time? You betcha. And one of the things you said in your comment is we have in your opening is that we have many, um, adult children working for parents mm-hmm.<affirmative>. But we forgot to then say, but it's grandma and grandpa who still may own everything. So we have to understand the transition can be multiple generations. And this does not have to be a dreaded process. If you understand that there are tools that you can put in place that will help you transition three things. Cuz we have to transition three things here, Dan. We have to transition the intelligence. In other words, they have to know about the business. They have to bring something to the business from their education. The second thing we have to transition is the experience. So this does not happen overnight. Experiences where you begin to earn another generation's trust and respect, a willingness to change and learn. Mm-hmm.<affirmative>. But the third thing is what we always think about. And that is we have to transition the hard assets, the land, the equipment, the critters, the crops, those kinds of things. But it is the first two that cause so, so many, uh, points and roadblocks that keep us from doing the last one. We also will go to professional advisors for the last one. We'll go to attorneys and accountants and we very much need them. Um, but again, unless you have the first two in place, we have a problem because the challenge with transitioning a business, it's first deciding is there a business worth transitioning?
Speaker 1:Yeah, that's very good. Yes. And, and you said the word dread in there that sometimes, uh, growers dread that. Talk a little bit more about that, unpack that. Why do you think that is? Why do growers or, or maybe grandma or grandpa, why are they dreading this whole process?
Speaker 2:Well, there's always emotion involved. And when emotion and logic collide, emotions going to win. Mm-hmm.<affirmative> in's to that emotion might be control. Um, lack of fear of not being needed or worthwhile or appreciated. Um, fear of individual needs, will they be met? Is this transition takes place and in the future. So fear always has to be addressed. And what I find some of the emotions are very, uh, dominant. There can be anger or resentment or jealousy or fear. There's always tears<laugh>. And so, right. Um, I have learned, I have got to deal with the emotions so we can get to the logic, but it takes a lot of one to one time and building trust. Uh, and I should say credibility as a, as a consultant here, so that I can figure out what's going on behind the scenes. Mm-hmm.<affirmative> and I often spend 40 hours or more one to ones with family members. Right. Uh, either by zoom or by phone, by who I would even come and work with them. Cause I have to make sure my work can be of value, first of all. And they have to be ready for me. Cuz Dan, I'm not your traditional consultant. I don't mediate. I dictate<laugh>. I see. I've been at this long enough and, and when you've learned lessons over 34 years of what works and what doesn't, and I don't let people get by with too much. And so they know that most of the people who invite me to their kitchen table have heard me speak. So they're well aware of what they're going to be in, in store for.
Speaker 1:Yes. Well, it, it's great that you, you know, help them with that. And probably being an impartial third party really helps you get to the, the core of the decisions that, uh, need to be made and maybe remove the emotion from that. Uh, before we go too deep though, into this transition, you had mentioned this earlier about the business being profitable, but why is that important to assess whether the farm is actually profitable or not?
Speaker 2:Well, I always have to start with the existing owners, which is quite often the senior generation. Mm-hmm.<affirmative>, and I must to make sure that they are financially secure. I, I remind them that their kids don't have to start where they are at today because you didn't<laugh>. Right. But neither can they start where you started. Mm-hmm.<affirmative> and the senior generation must be financially secure or they will never relinquish control. So I have to say to them, if you have put in years of blood and sweat and tears into the business and you don't have that house you want to have, by golly, you deserve it. And maybe it ought be handicap accessible.<laugh>. And I say to the senior generation, if you've not taken that holiday you want, by golly you deserve it. And I always have to ask, if you've not provided and taken care of your long-term healthcare needs, you might bring down the business that you want to continue. And so it is extremely important that they're using an advisor. It's called a certified financial planner. Mm-hmm.<affirmative>. And this is somebody who sits down, uh, individually, not as a work team, but usually beginning with the senior generation to find out what they own and what they owe, what do they need to live on, uh, do they have their legal documents in place with beneficiaries and wills, all those kinds of things. But most importantly, they're gonna help them figure out what is it that they need to live. And until we make sure they're secure, they won't relinquish because the next generation dings with their security. Oh, they wanna buy more land, but what about me? Oh, you wanna buy more, uh, machinery, but what about me? And so I have got to make sure they're financially secure first.
Speaker 1:I see. And, and I talk to a lot of friends, coworkers, people that I know, um, you know, that are in farming, that, that are more my age. And so they have parents or, or grandparents, um, that are in that senior generation. And sometimes the, the they, they see the letting go is tough for that senior generation. What would you say to someone who is not the senior generation but is more, you know, in the middle, maybe the middle age, uh, about how to help that generation or maybe to be patient with them through this process or not get so frustrated about that, that letting go, that's difficult.
Speaker 2:Well, you really have to look into the mirror at your behaviors.<laugh> mm-hmm.<affirmative>, if we don't have kindness and courtesy and respect and we don't just meet their expectations, we exceed their expectations. If we don't honor the journey, the journey where they rode to school uphill both ways on a pony for four miles,
Speaker 1:<laugh>, right?
Speaker 2:Yeah. Then, then they're never gonna transition be it I want, I want them so financially secure so that the next generation can take the risk on what they can afford to lose or grow. But the senior generation is okay, so they're what, you know, they have been your role model for a long time. Be it good or be it bad. They, and they're often the owners of the assets. So a lot of it comes with appreciation and respect. But I want you to know it. It's not always easy. Here's an example. When my father-in-law was 90, he was still driving. Now, he didn't say he should be, but he was
Speaker 1:<laugh>. Okay.
Speaker 2:Yeah. So he was an assisted living, but he would only drive from there to the farmstead. He comes into the driveway, always honking on the horn because he's not gonna get out of the car, but we all come running. Okay. So I'm the first one there. Hey dad, how are you doing today? Oh, pretty good. Pretty good. What's my hu He's, what's Keith? That's my husband. What's Keith up to today? Is he out planting corn? Oh no, dad, we had three inches of rain last night. It's too wet. Well, you better tell him it ain't gonna grow in the bag. Well, I'll do that, dad, I'll do that<laugh>. I'm just not gonna tell him today. I'm gonna wait till all the crop is in and then we'll both have a good laugh,<laugh>. So a lot of it is, is respecting and writing the rollercoaster. Uh, but it's, it's really hard to get started in agriculture unless there's somebody willing to incrementally give you an opportunity. But you better use that opportunity very carefully. You better be kind and courteous and respectful. You better not just meet the expectations. You better exceed the expectations. Mm-hmm.<affirmative>. And then you begin to learn about the personalities. If there's a senior generation that, that likes to talk and meet, you better not wanna text and tweet with them. You know? I see. It's a lot of learning what different generations need.
Speaker 1:I see. Yeah. Which is a, is a great dynamic, but, uh yeah. Is a very tricky dynamic for, for families. So let me, let me go this direction, uh, with you. If you were to create a checklist, what are some of the important first steps to take in this planning process?
Speaker 2:Well, for me, the first one needs to be an intentional decision. And for this decision, it comes down to one thing. Do you want to be a family first business or a business first family. Now here's the difference. 95% or more of the multitude of emails, phone calls, conversations I have come from people operating as a family first. Let's not rock the boat. We don't wanna get dad mad. Right? I wonder what's on mom's mind. You know, if he hadn't married her, we'd be fine. Gosh, I think there's a will I, you know, we just all get along. We'll be just fine. We love each other and they're operating their future on a habit assumption, a hope and tradition. And sometimes I, that does work out. But I call that lucky. Now, if you wanna operate as a family first, that's okay with me. As long as the business is a hobby, but you cannot count on it for good decision making, productivity and profitability. What I teach and the tools they receive, the template tools help them become a business first family. Now, some people don't like the way that that is said, but let me tell you what it means. As a business first family, it does not demean the family does not say the business is more important than you the family. But what it says is that we love and honor you, this family, so very much, we better get the business right? Mm-hmm.<affirmative>. And so my goal as I work with people in business is that the insight they gain, the tools they lead with help them increase their productivity, their profitability. But I want them to have some peace of mind so they can sit together happily at a holiday table. Mm-hmm.<affirmative>. And what I have found, Dan, is that if they don't treat it as a business, you can lose both business and family.
Speaker 1:Yeah. That boy, that is great, great wisdom. So you encourage some families, I, I guess what I'm hearing you say is that they have to, uh, remove the emotion away from it a little bit and take off the family hat and, and say this is a business and we, it has to be profitable and we have to make good wise business decisions. That's great advice.
Speaker 2:I just wanna say, I don't want moms and dads bringing in the kids. I want leader managers hiring worthy employees, earning the right for labor management leadership and an opportunity for ownership. There is a hierarchy that was a triangle that I just gave you. I want every, I want everybody to start as labor junkie equipment, scoop poop, work, all the holidays, long nights. Okay. Then you labor while you get to manage because we hired you, well you, you brought something to the team. Mm-hmm.<affirmative>, it might be mechanical skills or herdsman ship or agronomy or marketing. Uh, it might, you know, you brought something, so I'm gonna put you in charge of that. And as a manager, you know, you just don't get to do what you want. You have to have goals, make sure there's money, report to other people, get enough people to support you so the work gets done. And then since you manage that, well you now manage something else. But I always have to remind the senior generation that at the pinnacle of your career, you get to become labor again.
Speaker 1:<laugh>,
Speaker 2:We kind of forget that one. Yeah. You know, but we have worked so hard. We said to somebody, follow me, join the business. Follow me. Labor. Labor, labor. Wow, you're good at that. Yeah. Management. Management. And now I get to follow you. Yes. And yet I had a young man say to me at a national ag meeting, you know, I can't wait for my old man to die. And he absolutely meant it. And I had a father say to me, you know, I think my kids just want me outta here. I think they just want me dead. Well, what he doesn't know is that I have worked. Are you from Indiana? Dan?
Speaker 1:Yes. I'm from Indiana.
Speaker 2:So I have done the Indiana young farmer meeting a number of times, Uhhuh, and I know his next generation. And I said, dad, that is not true. They don't want you dead. But what they want is the wise master one who's ridden the roller coaster. Yes. Because the whole purpose of this marching up, the triangle of transition of intelligence and experience requires that we learn a rising generation has to learn how to lead. And the senior generation has to learn how to leave right. Now that doesn't mean we kick you off the farm. No, no. That is your soul. And oh, we need you. One of the most important things a senior generation needs to provide is their wisdom to those who are coming up. And the most important question they'll ask is this. Wow, that sounds like a great idea. How are you managing your risk? Mm-hmm.<affirmative>, you know, have you thought about this? Or I have seen this happen. Do you have a plan B in case it happens to you? In other words, we have to have people in our lives who have what I call grit. They've been tested over the long haul and the enemy of grit is ease. Here's a challenge. Sometimes we've made it way too easy for the rising generations and our children because we don't want them to fail. We don't want them to make mistakes. And so they have never developed any grit. Well, you take a look at many of these, of the senior generation right now who have been through the eighties, let me tell you, they've had grit. Or grit is transferable. Maybe they've lost a child or maybe they've lost, maybe they've had cancer. See, grit is transferable, but it is learning how to work through difficult times, whether it be through resilience and sacrifice, whether it be through faith and support. But that senior generation, if they have made it this far, they have that. And that is much needed by the rising generation.
Speaker 1:All right, Jolene, let's talk about fair and equal and, and I have four kids of my own. So I have, as I've raised kids, we've dealt with, you know what is fair, but are they the same thing when it comes to a family farm?
Speaker 2:So let me take you to a couple questions. I was asked last week, I was at a large dairy meeting and one of the next generation said to me, you know, I've been working on this dairy for 17 years. Uh, my dad believes that fair is not always equal, but mom believes that equal is equal. So if dad dies first am I screwed,<laugh>,
Speaker 1:<laugh>.
Speaker 2:And then right after he left, here comes another one. My sister and I have been working in this operation for a lot of years. And so we're wondering why should we bust our butt just so our brothers and sisters can get rich? Right? So yes, fair and equal is the number one stumbling block. I would call it an excuse of why people don't do what they need to do. So since I do so many media interviews, this is how I explain the difference between fair and equal. Here is equal. Just picture this. I have a beautiful apple pie. It smells so good. It's gonna taste so good. And I could hardly wait to share it. And so I bring 1, 2, 3, 4 of you, all of you to the table. And I have to cut that thing in 90 degree angles. Four dessert plates. You each get one fourth of the pie that is equal. Now here is fair, I have a beautiful apple pie. Oh my gosh, it smells so good. It's gonna taste so good. And I could hardly wait to share it. And then I step back and I think about the apples that went into the pie. And then I step back and think, gosh, who planted those trees? Who watered those trees? Who kept the disease in the fungus away? Who nurtured those trees? So that years down the road those buggers could finally bloom. And then I'm wondering who picked the apples? Who stored the apples? Who marketed the apples? So I could go to the store and buy the apples and make you a pie? And now I bring 1, 2, 3, 4 of you to the table. And I say, if you notice the pieces of the pie are not the same size, but neither has been the investment into the making of this pie. Had these two not been here for 20 and 18 years, this net worth in this farm would have never grown. I would've given up a long time ago with rules and regulations and and having to deal with technology. Had they not been here, the farm would not have grown had they not been here. I couldn't come and go as they want had they not been here. This legacy that means so much to me and hopefully to you could be in the wrong hands. And so that doesn't mean I have forgotten you, but please understand what they receive comes with a great deal of risk. Mm-hmm.<affirmative>, what we have set aside for you, there is no risk. Now I will address the issue. If they don't have anything to set aside, I try to encourage my families to meet with each of their adult children separately. Oh, that's good. And I want them to ask, I want the adult generation to ask the next generation some specific questions. Here's the first one. You know, we're working on our wills and our buy-sell agreement for the business and we're wondering do you have any expectations for what is in our will and inheritance? Do you have any expectations how it might affect you? What you, and then the second thing, is there something that we currently own that means a lot to you, that you would really hope comes your way when something happens to dad and I or mom and I And then I always say, you know, the land and the equipment, the farm has a lot of value. Mm-hmm.<affirmative>, we want this farm to continue, but that land and equipment is not cash. What it is is resources and tools. So those who are farming can continue the business. Right. So how do you feel about this business continuing and how do you feel about, we've got the right people doing it cuz these people have worked here a long time. Mm-hmm.<affirmative>, you call them your sisters and brothers. We call them really worthy employees who've earned the right for management and leadership and ownership along the way. Then when you, that doesn't mean the people you're talking to have any right. In your final decision, it just means you've heard their perspective. Mm-hmm.<affirmative>. Yeah. But if they don't hear it from you, then there will be fighting on the way to the funeral home and the will will be contested and you're gonna break up the family. So I'm, I'm very clear that we make sure that if you want the business to continue, there are terms mm-hmm<affirmative> of which it can continue because you're also gonna say to the other siblings who are not in the business and those who are in the business will be purchasing from us and that will be our retirement. Mm-hmm.<affirmative>. And so they are funding what it is we're going to be living on as well as what we have set aside for that. But they are continuing not getting this freehand, they're continuing this with obligations as well. It's all spelled out Now when we're all together, here's what we're gonna do. I had our attorney write a copy of my will in plain English<laugh>. Cause he can add all the where two, four and their As is later. Yeah. I have a copy of the buy sell agreement of the terms of transitioning assets of the farm business. I'm going to go through those with e with all of us together. And then each of you take a copy. You grew up in this big old house. You come on back and tell me one at a time what it is you're thinking and then you go to the attorney and get it legal, what you need to do.
Speaker 1:That's great wisdom. Yeah. That's very good stuff. I think I already know the answer to this next question, but uh, let me ask it anyway. Does a genetic relationship equal a good working relationship?
Speaker 2:Duh.
Speaker 1:<laugh>,
Speaker 2:Just because you're born to someone and raised, does it mean you can and should be working together? Now let's go back to the premise. Being a business first family, it does not demean the family. Here's what it means. I believe that acceptance in a family is unconditional. Right? If I have a son or daughter, I have a joyful job. I get to love them, I get to lead them, I get to help them grow and I must let them go. What I believe in a business first family is acceptance and a business is conditional and it is not a birthright. Mm-hmm<affirmative>, matter of fact, I have six specific questions that must be answered by the next generation before you should even be invited to be part of a family business. Then when I was down in Oklahoma working at the land grant university, juniors and seniors in farm and ranch management, one of the juniors came up to me and said, you know Jolene, when I graduate I'm going back to the ranch. I said, have you been invited<laugh>? Just cuz you want to doesn't mean you get to, we're not bringing in kids. Now let me, let me just bring up one major problem that I see happening more so in the last 10 years, we are so eager to have next generations join us in the business. Mm-hmm.<affirmative>. And so the senior generation says, oh my gosh, we've gotta rent more land. Oh my gosh, we gotta have bigger and more equipment mm-hmm.<affirmative>. And they keep the debt and all of a sudden the whole thing goes down the tube because we have not done what I call the probationary period to make sure that we can work well together. You must meet those requirements. They're based on 30 years of sitting at kitchen tables and once they meet those, we have a much higher chance to success. Do you wanna hear what they are? Yes.
Speaker 1:Yeah. Share those with me please.
Speaker 2:Okay. Very quickly, if you wanna work here, what do you bring? Mm-hmm.<affirmative>, you've got to bring something that is a value to the business. Right. Second, do we even need you? Just cuz we're really good at it. Does it mean that we need another person or we need those skills, right? So are we gonna change the business? You know, is we going to support a different type of business? And then the next one is, so what does it cost? Everybody comes with their handout. Mm-hmm.<affirmative> you, you'd be surprised, but they'd like a paycheck. Right. They'd like health insurance, maybe dental and optical. They wanna pickup to drive with all the fuel. They'd like the farm to pay for their smartphone and their iPad. They'd like the farm to give them a house to live in rent free and pay for all the utilities. Mm-hmm.<affirmative> when you add that up. And we're often butting up to$90,000 and sometimes they think so little is so little, but we are talking compensation package, not just salary. What does it cost? Then the next one is very important and oh, they just, they just don't like this one. Yeah. I want the next generation to work for a non-family boss for two to three years. There are so many lessons. Actually there's about 30 lessons you learn when you have a non-family boss. Mm-hmm.<affirmative> and parents are not the best teachers. I know you need them back on the farm and I know they wanna come back to the farm, but they come back at a whole different level. They have understood that if you, they come home and get treated like dirt, they don't have to stay there. They can work elsewhere. Right. They learn that sometimes things aren't so bad at home. Yes. They learn that respect is earned, that you must be hired and you can be fired and you're accountable. You have to show up at time. There's so, so many lessons you learn. I want them to have a non-family boss for two to three consecutive views. This is not internships, this is where you've worked for somebody else. You've had good performance reviews or promotion. Mm-hmm.<affirmative>. And then I always ask two more questions for the next generation. I want to know, are you still living at home and is your mother still doing your laundry
Speaker 1:<laugh>? And what does that tell you?
Speaker 2:Emotional intelligence. Oh yeah. If you're still living at home and mama's still doing your laundry, you're still mommy and daddy's little girl and boy and they're still your mommy and daddy. Again, please don't have parents bringing the kids. I want them bringing in worthy employees. And I need to add one more thing about a family business. It is not a place to rehabilitate a family member.
Speaker 1:Oh, that's
Speaker 2:Good. Right. That there's somebody in your family who's angry or addicted or arrogant. Mm-hmm.<affirmative> or lazy. Don't hire them, nobody else would. Yeah. Why do you give'em a paycheck so they can keep acting that way? So I'm at another meeting and I've known the president of the association and his wife, they'd been in some of my leadership training classes and they asked me to speak at their banquet of their group. So we're, I'm at their table and we're visiting and dad said, oh, Jolene, we bit the bullet. We finally brought our son into the business. Great dad. How's that working for you? Mm.
Speaker 1:That's
Speaker 2:What's going on. He just doesn't have the work ethic that we need. Mm-hmm.<affirmative> mom elbowed him and she said, you tell him like it is. He's just plain lazy. Oh. I said to dad, how long has he been working for you? Well, about a year and a half. Hmm. Have you been paying him? Mom says, Hey, listen up, I'm the bookkeeper. He gets paid big bucks. He even has more fringe benefits than we do. And then I asked dad the important question, so Dad, why exactly did you hire this employee? And he said, well, he couldn't keep a job anyplace else.
Speaker 1:Yeah.
Speaker 2:Well, lazy here. Lazy there. Right.<laugh>. So be very careful when you treat things as a business, then you can love them. You can give them resources, they can improve themselves, they can go elsewhere, but they're not working in the business.
Speaker 1:Sure, yes. That's great wisdom. But yeah, I see it. That's very difficult to apply and uh, pull off. And as much you've given us so many great steps here for families, but here's what comes into my mind. What percentage of the families that you work with actually follow through with this entire process? Do most of'em do it or is there some that are like, eh, that's just, that sounds kind of hard so we're just gonna, you know, or maybe one spouse, um, of the senior generation says, no, we're not gonna do that. You know, I'm gonna always let our son have this position. How, how many of'em actually follow through and do what you say? Take your advice.
Speaker 2:When we started this podcast, I said I'm very picky who I work with mm-hmm.<affirmative> and they have to be ready for me if there is entitlement uhhuh Or laziness or ignorance they don't want to improve their intelligence on. Right. I don't work with them. So I have a very high success rate. And I'm gonna tell you something. When I, when I do family business workshops and I, they give me a full day, I will do the entire morning and then after lunch we will do a panel of key advisors. I want them to see what an attorney, an accountant and a financial planner. And I always act as a family business coach. Mm-hmm.<affirmative> what it looks like when we have your best interest at heart and we answer questions. But the last thing, I never leave them without accountability. I don't want them going home overwhelmed, but I wanna know who is going to continue this process, write the name mm-hmm.<affirmative> and then I say, how many of you wrote a name of somebody who's not here?<laugh>. And they'd love to do that. Yeah. Because I always ask them this question to end. If you have seven birds sitting on an electrical wire, seven birds, and you answer this Dan, seven birds on the wire and 40 decide to fly away, how many are left?
Speaker 1:Yeah. You have three.
Speaker 2:Well, who knows, just because you decide to do something doesn't mean you did it.
Speaker 1:Oh, good point. I see
Speaker 2:People will make decisions, but it is the follow through. And one of one of my topics is called if we huff and puff, we blow your house down. Guess it's based on the third pig of the three little pigs who did it, right? Mm-hmm.<affirmative> putting in one brick at a time and then they used mortar to hold it together. Well, your mortar is your attorney, your accountant, your financial planner and your family business coach. Mm-hmm.<affirmative>. But there are tools that they can do and they, it it's usually a five to seven year process to get these bricks in place. Some people are so ready or sometimes it's a health issue,<laugh> or it's, it's, it's a disaster. And all of a sudden they have to build a house very quick and they try to build it a bricks and straw and it falls over. It requires intentional purpose and giving dignity to the fact that you are people who do all of the work. Mm-hmm.<affirmative>. And because you respect yourself, you want to do it right. Yeah. And so you do put those bricks in
Speaker 1:Place. Yeah. Five to seven years. Wow. That, that's really,
Speaker 2:That's a minimum. But well think about the hard assets here. Mm-hmm.<affirmative> if, and, and that might be terms which go to 10 years or 15 years to a contract. Right. Or it might be contract for deed. Mm-hmm.<affirmative> or it might be, um, I I I want people, oh my gosh, oh my gosh, I almost forgot to say this. It's so important. I want them to keep their operations in its own entity. This is anything moveable crops and critter people and machinery. And I want land in its own entity. Now land is often the security of the senior generation. Mm-hmm.<affirmative>, but they're tied together. So the land entity, the operations, rents from the owners. Mm-hmm.<affirmative> and the owners, if they don't get rent, they can rent to somebody else. You know, so they always have that security, but then they're must be, anytime you form a structure like a partnership, flp llc, CRS Corp, you must have a separate document called an exit strategy or a buy sell agreement that trumps a will.
Speaker 1:Hmm. Okay.
Speaker 2:Wills are changed on a whim. As long as somebody is deemed to be of sound mind, they can change their will. And so this buy-sell agreement has terms for death and disability and divorce and disaster and disillusionment. I wanna quit. Give me my money. I wanna get it now. You know, and if you ever go, oh, you're gonna love this. If you ever go to an attorney and they help you develop a, um, a structure like an LLC or a corporation, and the same day you sign those papers, if you're not signing a buy sell agreement, I want you to take that attorney and hang them up by the balls or boobs. I don't care what suck they are cuz they did you a disservice. Yes. You don't create a structure without a way to end it and without a way to transition assets within it. Now many people think that there are three sentences in their legal documents. The organizational or bylaws or articles cover it. No, no, no. This is a separate document. There's actually seven different parts to a buy sell agreement that must be in.
Speaker 1:So this is protection then for, for everyone.
Speaker 2:It, it allows the business to continue. It assures income if that senior generation is depending on farm income for their retirement needs or for the goals they have as they transition in other parts of their life. But it allows the business to continue and it creates terms of which it can continue. It doesn't say everything is gifted. Uh, there may be needed compensation for sweat equity, which is done every year, not at the time of death. There may be inheritance that comes that way. But if we're purchasing, these are the terms of which it is to be done. I
Speaker 1:See. Yeah. I see. So let's switch gears and go kind of a different route. As many of our listeners know, Topcon is in the technology business. So one of the huge upsides of precision agriculture is the ability to track costs and data to help farmers make wise decisions. So Jolene, how can this information be useful in a transition plan to being able to look at the data from yield to be able to look at the, the, the data of, of what the field is actually telling you the a agronomic data does, does it help in this process?
Speaker 2:Well it's certainly teaching the skills mm-hmm.<affirmative> of knowing details and accountability and results. Results.
Speaker 1:Yes.
Speaker 2:So we need the same thing when it comes to a family business. We need details, accountability, and results. So we have to start with finances. I need them accurate, I need them timely, and I need them transparent. That requires details. Now technology is something I will tell you, I, I'm glad to, um, pass that along to the next generation in her<laugh>. I don't wanna have to deal with that stuff. Right. But I am very interested in the results and I better know how they got the results. But would you please do that work? I don't want, again, production to be your excuse for not doing the human side of what needs to be done. Right. And yet I am just like everybody on this podcast. The more I have to deal with people, the more I like cows. Because if I don't like that o bitty, I'm gonna send her to market<laugh>. But you can't do that with moms or dads or sisters or brothers. Right. And yet communication is the bloodstream of the business. Communication requires insight, documentation, and details. Technology is certainly a part of that. And then the details that you are helping people gather and collect and analyze certainly becomes a part of the appraised value. Mm-hmm.<affirmative>, because it is improving the business. Right. It is increasing productivity and profitability. Mm-hmm.<affirmative>,
Speaker 1:That's great. That's good answers and, and helpful to know what, what are some of the risks involved when a transition plan is not in writing. What if they don't sit down and do all this work, but it's what if it's just in grandpa's head? What are the risks?
Speaker 2:Well, I will tell you this. A conversation's not a contract. And if it's not in writing, it does not exist. Mm. Here are the, and, and people in family business lie. They do Now they may not mean to, but they will say the same thing over and over again and don't do the work to assure it will happen. They say things like, work hard someday this will all be yours. Or you know, yeah, I'm gonna retire. And then there's that dreaded, oh, you don't have to worry about your brothers and sisters. They've got their jobs. They're not interested in the business. Now that's true. Until you're dead then everybody's very interested in the assets of the business. So you need to understand, you must have things clarified and in writing and discussed One more thing. It must be revised. I sat with a family and mom, well I, I finally said to mom and dad, you know, do you have your wills on hand? It would be really helpful if I could see actually what is in your will. I'm not an attorney but there's something I'm looking for. And the dust starts to fly and they bring them out. They had guardians for their children and their childrens were in their forties. I said, don't you think you might need to revise the wheel
Speaker 1:<laugh>? Yeah.
Speaker 2:So we need legal discussed. Discussed is key revised. I want an estate plan. Those, that's the transition plan we talked about. Yeah. I want an ownership and management transfer plan and I wanna buy sell
Speaker 1:Agreement. So what I hear you saying is for I'm most all families, I would say they need to bring in some professionals to help them in this transition. This is not something they're going to just be, there's work that to be done, but they've gotta have some outside help to come in and make it legal for the business. Correct.
Speaker 2:Yes. You know, do the best of what you can and what you know. But when you're talking laws and estate tax and you're talking transition and, um, buy sales, those are all legal and financial intelligent documents. Mm-hmm.<affirmative> that need to be clarified. And so I always encourage my families, cuz we do a lot of work to get them ready to go there so that then they go, we don't waste time and a lot of money. Uh, I say, you know, let them know this is what you want. This is what you have. Mm-hmm.<affirmative> how things are titled, what you own, what you owe. Here's my current documents that I have in place, but you're the expert here. What am I missing? Mm-hmm.<affirmative>, you know, is there another way to do this that might be more beneficial? Would you please give me two options for me to choose from? Because they have worked with hundreds of people in very similar situation. Laws have changed and there are options out there. So we very much need to have these advisors to make things legal because when I said things in writing, some things have to be notarized and signed and filed and documented. We have to make sure that the money, the taxes are paid. We have to understand stepped up basis and capital gains. There's all kinds of things. But when I, when I have workshops and I'm including an attorney, an accountant, financial planner, I hear them say some because the last question I ask them is, what do these people do that drives you absolutely nuts. Mm-hmm.<affirmative>. And the attorney will say, well, you want me to write? You will. So everybody will get along and the accountant says, oh, we weren't gonna pay a darn thing to the government. How do we save taxes? And the financial planner says, you wanna know how long you're gonna live. Do you have enough money to get there? Well, all of those are unrealistic expectations, but let me tell you how you can get clarity, peace of mind. Because the number one thing I hear after I'd finished my workshops is this, you've been sleeping under my bed. I told'em it was highly entertaining. You see all of these situations, we, IM personalize. They think they're ours and it can never happen to anybody else. Mm-hmm.<affirmative> or never has to be done by anybody else. And yet there's a lot of lessons we can learn from others that will give us that peace of mind. And I can, I want us to sit together happily at a holiday table. Right. That only happens when you treat it as a business.
Speaker 1:Yeah. All right. One, one more question for you. Uh, you've written and talked about honoring the family, but you must do the business. Right. Tell us, just to wrap things up, what does that mean to do the business? Right.
Speaker 2:Silence is the greatest destroyer of a family and a family business. This means communication. Mm-hmm.<affirmative>, whether it's your morning huddles at the busiest time of year, who's gonna do what do you have, what you need? Let's get to work. Whether it's that monthly management meeting with a planned agenda where you have an outline in your shop and people circle things that need to be brought up. Nothing circled, don't meet, only discuss the things that are circled. You don't waste time, whether it's that annual meeting, uh, that you need to have to inform people, bring people up to speed. Uh, what do in-laws and, and your advisors need to know. That is the type of communication that we're after. But part of that communication is hampered because we keep it to ourselves. And I had a family say to me, Jolene, would you go talk to Grandma<laugh>? Grandma is in her eighties. She owns 100% of the land. We don't even know what's in her will. And we've been running this business for lots of years. Yeah. Would you talk to grandma? And I said, does Grandma wanna talk to me? And they said she does. Yeah. So I went to the nursing home and I talked to grandma and she said to me, you know, Jolene, I'm not gonna tell any of my kids what's in my will because right now they all come to see me.
Speaker 1:Oh, whoops.<laugh><laugh>,<laugh>. Yeah.
Speaker 2:But she, she told me what's in her will, she's gonna break up the family, they're gonna lose the business. Wow. Now I cannot go back and tell the family what she said, but I did go back and say, you all better have a plan B,
Speaker 1:Uhhuh,<affirmative>. Yeah. Wow.
Speaker 2:So the first thing is make sure communication. The second thing is make the intentional choice to operate as a business so you can still be family. The third is get things in writing, legal, documented, make sure it's financially strong.
Speaker 1:Yeah. Because if it's not in writing, you're saying it doesn't exist. So. Wow.
Speaker 2:Exactly.
Speaker 1:Jolene, I can't thank you enough for joining us today and sharing your wisdom and your experience to help farm families on this very difficult topic.
Speaker 2:I love what I do, and I have been so blessed to see the benefits of people who actually not just decide to do it, but they actually, the birds go and they do it
Speaker 1:To learn more. I encourage all of our listeners to visit jolene brown.com where you'll find lots of helpful content on agriculture life and help for farming families. Farm transitions for families deserve time and attention. It takes wisdom and it takes thoughtfulness and even assistance from professionals. But it's very important to handle this part of the business Well, and I wanna thank each of our listeners for tuning in today. Topcon appreciates all of our farmers who work so tirelessly to put food on the tables. You guys rock. We love you. If you enjoyed today's episode, remember to like, share, subscribe to Topcon Talks Agriculture on Spotify, apple Podcasts, Amazon music, or wherever you get your podcasts. We'll see you next time. Go out and make it a great day.