Family Business Matters       02/12 12:50

   New Year, New Investments in Your Family Business

   This year, commit to a range of investments in key people, financial 
knowledge and future transitions. Here are some suggestions on what to think 
about regarding those investments.

Lance Woodbury
DTN Farm Business Adviser

   The end of the year offers a chance to reflect on what went well over the 
last 12 months. It also brings opportunities to make your family business 
measurably better. This year, commit to a range of investments in key people, 
financial knowledge and future transitions. Specifically, think about those 
investments in terms of mental or emotional energy, conversations and planning 
efforts.

   Invest in People. "People" in this case means your family members or key 
staff, and two types of investments warrant your consideration. The first is 
developing others, including coaching, mentoring or teaching them. It involves 
sharing your wisdom, encouraging them to grow or bringing them along in 
understanding some of your daily activities. Identify a person close to you, 
and invest in making them better in some way.

   The second kind of investment in people is repairing or improving 
relationships. We all have places in our lives where the connection we have 
with a family or team member is not as good as it could be. Perhaps a past 
conflict or misunderstanding damaged your relationship. Maybe you find their 
personality, communication or work style frustrating. But, if you can improve 
the bond, even a little, it will improve your perspective on life and your 
feelings about the workplace. It will have a noticeable and positive impact on 
your day, and improve the morale of those around you, as others often feel the 
tension between two people.

   Invest in Financial Knowledge. My nonagricultural friends marvel at all the 
subjects a farmer or rancher must know to run a successful business. Animal 
science, agronomy, equipment repair, engineering and construction, human 
resources, commodity marketing, finance, Farm Service Agency programs -- the 
list goes on. Improving your knowledge in any of these areas will be helpful to 
the business, but one specific topic in which all agriculture business owners 
can improve is their financial knowledge.

   Between cash and accrual accounting, grain or livestock raised and sold over 
multiple years, deferred income and prepaid expenses to manage taxes, multiple 
entities and complex ownership structures for liability protection and estate 
planning, knowing where you stand financially is no small chore. Spend some 
time and mental energy developing a clearer picture of your financial 
performance. Meet with your lender and accountant, perhaps together, to walk 
through their observations and set clear financial goals for the coming year. 
You will gain a clearer idea of how to make your business stronger.

   Invest in Future Transitions. Almost all farms and ranches face an impending 
generational transition. If the younger generations return, the management of 
the company will need to be handed off. Even if they don't return, ownership of 
land will likely be passed on to them. If neither management nor ownership 
transition will occur, then a different set of plans around retirement and 
asset sales is relevant.

   This year, take a step toward clarifying future transitions. Talk with your 
spouse, your adult children or your sibling business partners about your 
future. Identify tasks you should hand off. Update your last will and 
testament, or have your attorney review your estate plan. You and your family 
members will have more peace of mind knowing you've done what you can to smooth 
the succession of activities or assets.

   Most New Year's resolutions are never accomplished. Instead, commit to 
investments in areas you know will produce a return for your family and 
business. If you invest in people, invest in financial knowledge and invest in 
future transitions, you will look back a year from now and be proud of all you 
achieved.

   Lance Woodbury can be reached at lance.woodbury@pinionglobal.com 




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