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- 🗞️41 | Take a snapshot of farm financial health
🗞️41 | Take a snapshot of farm financial health
An explanation (and template) of a balance sheet; job opportunity; transition & succession planning thoughts; first gen farmer inspiration
Edition #41
July 15, 2024
Good evening and welcome to the Braintrust Ag newsletter. Where we guide the masses to the mud puddle that is ag business & transitions.
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A couple notes to begin:
If you haven’t already done so, check out the investment made in the new website… and let me know if it was worth it:
We’ve added a few new Pro Providers (maybe you ought to consider becoming one to boost your business) and an exciting new way to connect with other members: Sunrise Sessions
We had 18 members join our first (intro) week and a bunch of folks join us these past Wednesdays. I’m excited about this small group…
Alright, let’s get to the topics that will help you build a strong, sustainable ag operation.
-Clint
Here’s what we have this week:
⚖️ The Balance Sheet
🥛 Transition Plan TOC
đź“… Happenings
đź’˛ Side Gig Opportunity!
🤗 First Gen Farmers
👨‍👩‍👧‍👦 Succession thoughts
and more…
THE BIG IDEA
BA Pro Manager Series
#8: The Balance Sheet
We all need to check in from time to time with a doctor and get a snapshot of our health on any given day. It’s no different with the financial health of your farm/ranch.
The balance sheet provides that report of what you own and what you owe and is one of the primary financial statements used by pro managers, lenders, investors, and other stakeholders to make strategic decisions.
Click below to read more about the importance of, and how to use, a balance sheet. Plus, there’s a downloadable template if you want to create your own.
Don’t want to read the post but still want to download the Braintrust Ag Balance Sheet Template? Click the button below.
COMPREHENSIVE TRANSITION PLAN
An example of why an estate plan is not a comprehensive farm transition/succession plan…
As seen in this sample Table Of Contents, an estate plan is just one part of a comprehensive transition plan.
I use this list, and you sure can too, as a roadmap when putting a written plan together.
Become a member today for access to everything.
PEER GROUP HAPPENINGS
A couple mentions on what Braintrust Ag members are up to:
1) 1031 Exchanges: Learn & Get Your Questions Answered
Capital gains taxes are a big issue…why not defer them? Tomorrow morning, members will get to learn and ask about 1031 Like-Kind Exchanges from someone who eats, breathes, and sleeps this stuff: Joe Vesey.
Sure hope you’ll join us Tues. 7/16 at 8:00 AM CST!
2) Crop Insurance Recording
Last week, Billy Moore engaged in an awesome discussion on all things Crop Insurance at his Expert Q&A. You can check out the recording here:
3) Sunrise Sessions
Sunrise Sessions continue to be a meaningful way for members to connect on spiritual and personal development each Wednesday morning.
Here’s more info: Sunrise Sessions
Here’s the Event Calendar link to save the calendar invites so you don’t miss an upcoming session.
SIDE GIG OPPORTUNITY
Who says you can’t just create jobs from scratch? Check out this opportunity to help forge the future of Braintrust Ag ⤵️
FIRST GEN FARM COUPLE
I recently met a young couple with three toddlers who bought 40 acres in 2021. He works in the poultry industry. They started a layer flock & are now selling eggs locally. Officially first generation farmer status now.
Thanks to his line of work & interests, they're set to take over some laying barn leases from older producers with no successors. They're working towards growing the layer operation so he can scale back/quit his day job.
"Pulling the boat closer to the dock" so he can easily step from full-time work (dock) to full-time self-employed farmer (boat).
Yet another example proving it is possible to be a first gen farmer. And this couple has a detailed, long term plan to make it feasible. I hope examples like this are viewed as encouragement to someone out there.
If you get value from these newsletters, consider joining 250+ other ag people and become a member of Braintrust Ag. Your support makes this content possible.
SUCCESSION THOUGHTS
Farm transition scenario:
Husband has the hard & fast mentality that: Son helps on the farm so he should get everything.
Wife takes the approach of "let's be equal/fair" regarding $$ value.
→ 2 kids; one Son and one Daughter
We're talking $15 million in land, equipment, & livestock going to the on-farm Son.
And $500,000 in retirement & $500,000 in life insurance going to the off-farm Daughter.
That $14 million imbalance is what the wife is concerned about.
There's a solution that may make both H & W satisfied:
Property into a trust
Machinery & livestock left to on-farm Son
Retirement & life insurance left to off-farm Daughter
Trust grants right of first refusal (ROFR) to rent & ROFR + option to buy land at a discount to on-farm Son.
Until both H & W pass away, all income goes to them. When either H or W passes away, the other spouse gets all income. When the last spouse passes away...
Son gets the machinery & livestock
Daughter gets the IRA & life insurance
Both are beneficiaries of the land income, but Son has ROFR & option protections to keep the farm going
Instead of $15 million to Son and $1 million to Daughter, it's more evenly distributed with safeguards in place to keep the farm operation in the family & financially viable.
Without prior planning, exactly zero of this would happen. In fact, the farm may be sold at auction to the highest bidder. So, it begs the question... Have you started tackling this succession, transition, estate issue?
MEME OF THE WEEK
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Farmer ingenuity at its finest.
That’s a wrap, folks.
Until next week, thank you to everyone involved in ag.
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DISCLAIMER: All content, communications, and resources provided by Braintrust Ag, its principals, operators, or members is intended to merely be educational and entertaining. Nothing published by Braintrust Ag should be relied on as legal, financial, investment, or other professional advice. Investments and legal matters involve substantial risk and are not suitable for all individuals. It is recommended to enter into a client relationship with an ESP for obtaining professional advice.
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