1. Business Succession Planning Planning Business Succession Succession Business Planning Planning Succession BusinessPlanning Succession Business Buccussion Subnessc Planning Gininnalp Ssenisub NoisseccusGininnalp Ssenisub Noisseccus Busines s Succession Planning

2. Don't be afraid to ask dumb questions. They're more easily handled than dumb mistakes. William Wister Haines The great successful men of the world have used their imagination. they think ahead and create their mental picture in all it details, filling in here, adding a little there, altering this a bit and that a bit, but steadily building-steadily building. Robert Collier

3. Successor Generation  Values – What is important to me?  Vision – What does my future look like?  Mission – Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communication  Decision making  Conflict resolution Owner Generation  Values – What is important to me?  Vision – What does my future look like?  Mission - Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communication  Decision making  Conflict resolution Business Succession Planning

4. Values – What is important to me? Vision – What does my future look like? Mission – Why am I here? Goals – What do I want to do or be? Objectives – How will I measure activity? Strategies – What is my plan? Tactics – How do I implement the strategies? Self-Assessment Skills Abilities Essential Planning Skills Communication Decision making Conflict resolution

5. Successor Generation  Values – What is important to me?  Vision – What does my future look like?  Mission – Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Owner Generation  Values – What is important to me?  Vision – What does my future look like?  Mission - Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Business Succession Planning Business Resource inventory and analysis  Physical – Short, intermediate and long term property.  Financial – Income statement, balance sheet, financial ratios.  Personnel – Human assets. Essential business principles  Values - What is important to our business?  Vision - What does the future look like?  Mission - Why are we here?  Goals - What do we want to do or be?  Objectives - How will we measure activity?  Strategies - What is our plan?  Tactics - How do we implement the strategies?

6. Business inventory & analysis Physical: Short, intermediate & long term property Financial: Income statement, balance sheet, ratios Personnel: Human assets. Essential business principles Values: What is important to our business? Vision: What does the future look like? Mission: Why are we here? Goals: What do we want to do or be? Objectives: How will we measure activity? Strategies: What is our plan? Tactics: How do we implement the strategies?

7. Owner Generation  Values – What is important to me?  Vision – What does my future look like?  Mission – Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Successor Generation  Values – What is important to me?  Vision – What does my future look like?  Mission - Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making Conflict resolution  Business Succession Planning Business Resource inventory and analysis  Physical – Short, intermediate and long term property.  Financial – Income statement, balance sheet, financial ratios.  Personnel – Human assets. Essential business principles  Values - What is important to our business?  Vision - What does the future look like?  Mission - Why are we here?  Goals - What do we want to do or be?  Objectives - How will we measure activity?  Strategies - What is our plan?  Tactics - How do we implement the strategies? Business Planning Opportunities Threats Strengths Weaknesses One year Two years Five Years Ten Years

8. Business Planning Opportunities: in the our industry Threats: to our industry Strengths: what we do better than our competitors Weaknesses: what our competitors do better that we do One year: what will our business be and what will our industry be Two years: in two years Five Years: in five years Ten Years: ten years

9. Owner Generation  Values – What is important to me?  Vision – What does my future look like?  Mission – Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Successor Generation  Values – What is important to me?  Vision – What does my future look like?  Mission - Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Business Succession Planning Business Resource inventory and analysis  Physical – Short, intermediate and long term property.  Financial – Income statement, balance sheet, financial ratios.  Personnel – Human assets. Essential business principles  Values - What is important to our business?  Vision - What does the future look like?  Mission - Why are we here?  Goals - What do we want to do or be?  Objectives - How will we measure activity?  Strategies - What is our plan?  Tactics - How do we implement the strategies? Retirement Planning Timing Residence Income Source Household Budget Recreational Needs Health Care Needs Long Term Needs

10. Retirement Planning Timing: when will I retire Residence: where will we live Income Source: from where will the money come Household Budget: how much will it cost us to live in the style we want Recreational Needs: what will we do when we retire Health Care Needs: can we afford to stay healthy Long Term Needs: will we outlive our money

11. Owner Generation  Values – What is important to me?  Vision – What does my future look like?  Mission – Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Successor Generation  Values – What is important to me?  Vision – What does my future look like?  Mission - Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Business Succession Planning Business Resource inventory and analysis  Physical – Short, intermediate and long term property.  Financial – Income statement, balance sheet, financial ratios.  Personnel – Human assets. Essential business principles  Values - What is important to our business?  Vision - What does the future look like?  Mission - Why are we here?  Goals - What do we want to do or be?  Objectives - How will we measure activity?  Strategies - What is our plan?  Tactics - How do we implement the strategies? Transfer Planning Income Amount Source Method Household Budget Management Assets

12. Transfer Planning Income Amount: how much will the successor earn Source: from where will the money come Method: hourly wage, salary, bonus Household Budget: How much will it cost the successor to live Management: When will he successor take over the management and what authority will be transferred Assets: When and how well transfer the assets to the successor

13. Owner Generation  Values – What is important to me?  Vision – What does my future look like?  Mission – Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Successor Generation  Values – What is important to me?  Vision – What does my future look like?  Mission - Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Business Succession Planning Business Resource inventory and analysis  Physical – Short, intermediate and long term property.  Financial – Income statement, balance sheet, financial ratios.  Personnel – Human assets. Essential business principles  Values - What is important to our business?  Vision - What does the future look like?  Mission - Why are we here?  Goals - What do we want to do or be?  Objectives - How will we measure activity?  Strategies - What is our plan?  Tactics - How do we implement the strategies? Estate Planning Equal vs. Equitable Business Assets Personal Assets Consistency Flexibility Legal Documents Liquidity Needs Tax Consequence

14. Estate Planning Equal vs. Equitable: treating the business and non business heirs fairly Business Assets: must go the successor Personal Assets: can go to anyone Consistency: is the estate plan consistent with all other succession plans Flexibility: can the plan be changed Legal Documents: have the documents been signed Liquidity Needs: how will expenses be paid Tax Consequence: will there be estate or inheritance taxes to be paid

15. Owner Generation  Values – What is important to me?  Vision – What does my future look like?  Mission – Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Successor Generation  Values – What is important to me?  Vision – What does my future look like?  Mission - Why am I here?  Goals – What do I want to do or be?  Objectives – How will I measure activity?  Strategies – What is my plan?  Tactics – How do I implement the strategies? Self-Assessment  Skills  Abilities Essential Planning Skills  Communicating  Decision making  Conflict resolution Business Succession Planning Business Resource inventory and analysis  Physical – Short, intermediate and long term property.  Financial – Income statement, balance sheet, financial ratios.  Personnel – Human assets. Essential business principles  Values - What is important to our business?  Vision - What does the future look like?  Mission - Why are we here?  Goals - What do we want to do or be?  Objectives - How will we measure activity?  Strategies - What is our plan?  Tactics - How do we implement the strategies? Business Planning  Opportunities  Threats  Strengths  Weaknesses  One year  Two years  Five Years  Ten Years Retirement Planning  Timing  Residence  Income Source  Household Budget  Recreational Needs  Health Care Needs  Long Term Needs Transfer Planning  Income Amount Source Method  Household Budget  Management  Assets Estate Planning  Equal vs. Equitable  Business Assets  Personal Assets  Consistency  Flexibility  Legal Documents  Liquidity Needs  Tax Consequence Planning must be done simultaneously because all planning areas influence one another.

16. Presented by: John R. Baker Attorney at Law jrbaker@iastate.edu Beginning Farmer Center www.extension.iastate.edu/bfc/ 877.BFC.1999 Providing such programs as Farm On, Ag Link Seminar, educational materials, individual consultation, National Farm Transition Network