Over 80% of family farms fail to plan for generational transitions. A sad fact when you consider that most farmers or ranchers spend an average of 50 years or more on their farms.
While the dynamics of on-farm living are a little different on the California coast than what you would see in the midwest, the statistics of generational business transitions don’t lie:
- Only 30% of businesses make it from the first generation to the second;
- Only 10% of those make it from the second generation to the third;
- And of those, less than 4% make it to a fourth generation.
A survey by Farm Journal found that 80% of respondents planned to transfer control of their operation to the next generation, but only 20% of them were confident in their succession plan. Further, a study by Iowa State University found that 70% of retiring farmers had not identified a successor.
According to the USDA, over 60% of the value of all products sold come from large or very large family farms, often operated by two or more generations. It is expected that an estimated 70% of all U.S. farmland will change hands in the next two decades, which means only a fraction of those family farms will survive.
Farm owners who do put a succession plan in place often do so with the sole intent to ease tax burdens. However, it is not taxation that leads these businesses to fail; it’s misalignment over core values and lack of agreement on business operations. Since money conversations are typically emotionally charged in any family, we often put off communicating on such important topics until it’s too late.
In today’s dynamic business environment, survival requires proactive strategic planning, robust succession strategies, effective leadership development, and tailored management coaching. Our integrated approach empowers your team to anticipate challenges, seize opportunities, and drive sustainable growth.
We know that all of this can feel overwhelming, but it doesn’t have to be. Let us help you start the conversations.