Many small business owners are providing for their family’s income needs which are long term, and do not consider viewing their personal and business financial planning differently. Whether you farm row crops, livestock, or own an orchard, you will need to identify a successor in order to leave a legacy for future generations to come.

No matter the type of small business, there are a four strategies that you should be aware of that will be key to the financial future of your business.

1) Succession Strategies

Have you chosen a predecessor, a family member, or a younger partner who can carry on your business? Succession transitions should be anticipated just like retirement. Sudden life events are unpredictable and without a formalized succession plan, the chances for success decreases significantly with each transition. It is important to ask yourself the following questions:

• Have you designated a purchase price?
• Does the successor you have chosen have the ability to afford the purchase price?
• Have you determined outcomes for sudden death, disability, divorce, bankruptcy, or retirement?
• Do you have an established continuation plan for the business for the next generation?

2) Estate Planning

Unfortunately, without a proper estate plan, many small businesses fall victim to conflict or litigation. As a result many others are sold to pay the estate or inheritance taxes. At the end of the day, it is you as the business owner who determines what is fair. It is important to have an established estate plan to avoid or minimize the following:

• Federal estate and state inheritance tax
• Probate
• Selling land or assets

3) Business Strategies

Many often ask the question: What will my business look like now, in the future, or even when I’m gone? The truth is, without a formal business strategy an unexpected disaster could put your business or personal financial status in jeopardy. Choosing a formal entity such as an LLC or corporation could be a key factor to your agribusiness strategy. By establishing a business strategy you can:

• Protect your personal assets from business liabilities
• Lower your income taxes
• Ease ownership or transitions

4) Retirement Income

In many cases, small businesses are multigenerational businesses. As the business provides income for multiple generations many ask the questions, how will I provide for my family or leave a legacy once I retire? When a retirement plan is established it is important to consider the transition period. Does your retirement plan for your small business include the following:

• Maintain your current level of income
• Avoid selling assets
• Support the next generation
• Cover healthcare or long term care facility expenses

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes.