Farm
Cedar Valley
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MATCHMAKER MATCHMAKER Succession Iowa connects rural business buyers and sellers MELODY PARKER
melody.parker@wcfcourier.com
In rural communities across Iowa, retirement-aged business owners are faced with the dilemma of succession. They’ve nurtured their businesses for years, whether it’s the local feed store, farm equipment sales and repair, a pharmacy or local café. Who will come after? Will
it become just another empty storefront in their community? There was a time when future generations picked up the mantle and carried on. Those days are long gone with children scattered across the country with their own careers and families, and no interest in moving back to the small town where they grew up. On the other side of the ledger is a buyer eager to purchase an established business and put their own stamp on it. But where do they look for a
business? How to they make a connection with a potential seller? Enter Succession Iowa. You could call the program a matchmaker be- Beenken tween buyers and sellers. Succession Iowa is a program offered through the Center for Business Growth and Innovation at the University of Northern Iowa. Its purpose is to address the closing of viable rural businesses due to a lack of successor or exit strategy. “The Baby
Boomer generation has been an incredibly entrepreneurial generation, and they own lots of these businesses. Now they want to retire, or they’ve been hangLuensmann ing on for long after retirement. Sellers are plentiful; buyers are fewer,” said Dan Beenken, Small Business Development Center director and senior program manager for Advance Iowa. “A lot of these business owners are getting older. Iowans are getting older in general, and we’re faced with a silver tsunami of retiring business owners in rural communities
Rural business and industry owners nearing or beyond retirement age can reach out to Succession Iowa to help connect with potential buyers. SHUTTERSTOCK PHOTO
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statewide. When you can’t guilt your kids into buying, you need to look elsewhere. We use the term ‘matchmaker,’ a farmersonly.com for pairing up sellers with interested buyers. We want rural communities to maintain strong businesses and avoid losing services and products and population, too, as well as a shrinking tax base.” Owners stand to lose wealth as well. In rural communities, Succession Iowa works predominately with ag-business, feed and grain stores, small manufacturers and other businesses that are substantial enough to entice buyers. Selling a business can be a lengthy and involved process, Beenken said. Succession Iowa’s primary goals are to establish a fair market level valuation of the business using well-document valuation techniques, develop an online business listing and a buyer screening to connect buyers and sellers. And it’s better to be proactive than reactive. Patrick Luensmann, senior program manager, said that such baseline information is vital. “A business owner needs to be able to make decisions to plan for a future beyond business. Succession Iowa can provide them a path. Often it’s the
Exit Planning Assessment What to expect when you complete the Exit Planning Assessment: A written Exit Plan based on your goals, objectives and concerns. Only after listening carefully to your answers to dozens of questions will Succession Iowa begin to create your Exit Plan. A coordinated process that draws on the expertise of other advisers. To get started, an Exit Planning Assessment form can be found at https://advanceiowa.com/succession-planning first financial information an owner gets related to what range price they can expect out of their business. That’s the first thing. The second big thing is keeping that industry in the community.” Third is about legacy. “For owners who have built their business from scratch, it will continue, maybe under a different name, but by working with us to get a
successful next buyer, that’s your legacy for the your employees, your customers, your community and yourself,” Luensmann explained. Beenken said most business owners are hesitant for news to leak out that they are considering selling their business, “It can be a long process, so will your customers leave if they know you’re selling, will employees quit? Those are justifiable fears and huge hurdles for an owner, especially in a smaller community. Not to mention that an owners’ whole identity is wrapped up in their business.” He describes it as “the monkey bars of life. If you’re holding onto for dear life to the monkey bar of your businesses, you’re not going to give it up until you know what monkey bar you need to grab onto next. The body won’t go where the mind won’t take it. That’s why we end up seeing company owners in their 70s and 80s.” After making the connection, Succession Iowa takes on the role of Switzerland – acting as a neutral party who educates both sides about financial valuations and the process of buying and selling a business. “For the business owner, you only sell your business once. Most people haven’t done it before and can’t draw on expe-
rience from previous sale. They want to know why their business is valued in a certain range.” Succession Iowa provides a valuation that gives them a range of value for the company based on the industry, location and profitability. The program partners with the Finance Department at UNI’s College of Business, working closely with Brett Olsen, assistant professor of finance. Luensmann said student teams conduct the bulk of financial analysis and build a small business valuation model for a particular business, “It’s easy to value big business because you have tons of financial information. Trying to value a small business becomes a blend of art and science, and the students who do the analysis of industry comparisons have done a masterful job,” Luensmann explained. Beenken added, “On the buyer’s side, it’s all about taste and fit. Typically, you only buy a business once, but in some cases buyers are very sophisticated and know what they’re doing and don’t need us beyond the introduction and general information,” Beenken said. For more information about Succession Iowa, visit https://cbgi.uni.edu/succession-iowa.
We are Proud to be Part of the Farm & Agriculture Industry!
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TIPPING OUR CAPS TO FARMERS EVERYWHERE Thank a farmer this spring for helping ensure we can all eat tomorrow. We’re proud to provide many local farmers with the coverage they need to keep growing. Trust in Tomorrow.®
“Trust in Tomorrow.” and “A Grinnell Mutual Member” are registered trademarks of Grinnell Mutual Reinsurance Company. © Grinnell Mutual Reinsurance Company, 2020.
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Encourage a Safe Operation In many regions, springtime opens the door to the busy farming season. Analyzing your property for potential hazards before accidents occur enhances how you operate safely and protect others who work on the farm. The Occupational Safety and Health Administration warns farm employees about the numerous safety issues that are common in the industry, including hazardous equipment and machinery; ladders and falls; respiratory diseases; and vehicle hazards. To avoid a lost-time accident and, more importantly, a significant injury to yourself or others, learn the risks associated with agriculture operations from the USDA’s National Agricultural Safety Database.
Safety Around Machinery Farms require tremendous
machines and innovative equipment to perform profitably and efficiently. However, these same components can be dangerous to the lives in charge of operations. Before opening for the season, ensure your tools are in good working order, according to the manufacturer’s instructions. Power tools should have proper grounds in place and guards and shields must be installed correctly. Don’t forget to stock your farmhouse and equipment with appropriate safety gear like gloves, safety glasses and respirators; clothing should also be tight-fitting to avoid being caught in farming machines.
Pesticides and Chemicals Employees who apply, mix or load pesticides are at risk of developing illnesses. These dangerous chemicals can cause harm when workers re-enter a
sprayed field, working without appropriate PPE equipment and eating with contaminated hands. The Environmental Protection Agency oversees the Worker Protection Standard which contains requirements for: • Safety training and restricted-entry intervals after pesticide application. • The use of personal protective equipment and notification of pesticides. • Decontamination supplies and available emergency-medical assistance. When using pesticides on the property, it’s crucial to be proactive in protecting everyone in the area.
Vehicles
Ensure the numerous vehicles used around the farm are well-maintained and operating correctly. Include tractors, trucks, combines, ATVs and UTVS. When using the equip-
ment, utilize a system of hand signals to communicate with your team when noise levels are high. Encourage peers to learn a
standardized method developed by the American Society of Agricultural Engineers so everyone is on the same page, even visitors.
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American
Farming By the Numbers
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id you know that two million farms are operated in America’s rural landscape? According to the American Farm Bureau Federation, 98% are powered by families — individuals, family partnerships and family corporations. Without their hard work and dedication, the grocery stores we’re used to would look much different. Fortunately, there are many ways to get involved with making your local farmers feel appreciated. You can strive to use more locally grown ingredients in your cooking.
This can include local grass-fed beef or locally sourced fruits and vegetables. You can also support your local farmers markets, where you can meet and greet farmers from your area to learn their story and support their businesses. Sharing your love for local ingredients, farmers markets and farmers themselves is a great way to drive more attention to the farming businesses in your region. Use your voice and your platforms to make a difference for those who feed us. If you haven’t thanked a farmer recently, check out these inspiring facts from the Farm Bureau to recognize their significance in the progression of our
country. • About 11% of United States farmers are serving or have previously served in the military. • 25% of farmers are considered beginners, in business for less than 10 years. • Only one acre of land can grow 50,000 pounds of strawberries and 2,784 pounds of wheat. In 2018, $139.6 billion worth of American agricultural products were exported across the world. Over half of America’s farm operations provide habitat for wildlife like deer, moose and fowl. • Women make up 36% of U.S. farms; 56% of all farm operations have at least
one female in charge of decision making. • One U.S. farm feeds 166 people annually. • The top three farm products in the country are cattle, corn and soybeans. • 87% of U.S. agricultural products are produced on family-operated farms or ranches. • About 1% of the U.S. gross domestic product is attributed to farming. • Approximately 8% of U.S. farm markets operate locally, through direct-to-consumer or intermediate sales. • One day of production for a quality dairy cow creates 4.8 pounds of butter, 8.7 gallons of ice cream or 10.5 pounds of cheese.
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SUPPORT SCHOOL AGRICULTURE You don’t have to own or manage a farm to be a contributor to its progression. Talk to your local schools about how you can get involved in their agricultural department or become a part of the cause to begin one if it isn’t already established. When building a platform to teach kids about the importance of farming, government assistance is available. Encourage local officials to participate in the National Farm to School Network, sponsored by the USDA. The program aims to improve awareness of farming by focusing on five principles. • Assess where you are and where you’d like to be. • Form a team and collaborate. • Establish one or two attainable goals to get started • Learn from others. • Promote farm-to-school in your community.
their actions with their peers and teachers at school, so encourage them to follow a similar course. You can also speak with the school board about incorporating conservation efforts on campus, like tree planting, composting and water conservation.
FFA Organization
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Developing lessons based on these guidelines creates a sense of community amongst students and staff. If your local school already has an efficient agriculture program in place, consider these tips from the USDA to ensure it continues to grow.
Practice Conservation
Encourage the youth to conserve resources on non-agricultural land to increase food and shelter for wildlife in the neighborhood. These practices can be performed in suburban yards, city lots and rural areas. Instruct your children to share
The National Future Farmers of American Organization was founded in 1928. Since its inception, the program has educated youths about aspects like production farming, agribusiness and forestry. Nearly 700,710 students have been impacted by FFA lessons that provide them with leadership to strengthen communities and respect American agriculture. To start an FFA chapter in a local school, there must be an
Put us on the spo spot. t. We’ll finance the family farm.
Your farm is more than just a means of income, it’s a part of the family legacy. At BankIowa, we get it. That’s why we want to be more than just a bank to you; we want to be your resource. Our ag banking team is here to help advise you on financing that best fits your needs to ensure your legacy grows and thrives for years to come. So, what are you waiting for? Get in touch with our team at: 1-800-433-0285. Let’s go!
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established agricultural education program. Before bringing your plans to the school board, the organization suggests considering these steps: • Learn about agricultural education. • Determine the philosophy of this lesson throughout your community. • Consider interest between the community and students. • Gauge specific requirements for the local area. • Create an outline and plan for action. • Create a campaign with other interested parties. • Organize a curriculum that educates about agriculture. Whether you’re a teacher or a community member with a passion for an FFA chapter, finding the right group of people to develop a plan can impact a school board’s decision.
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M
ost farms and ranches rely on electricity to operate essential equipment like pumps, lighting and electrical outlets. Removing your power hub from the grid by installing solar panels develops an efficient system that can create a return on investment in the future. According to the organization Solar United Neighbors, farmers have two options to pay for an innovative solar system. Direct ownership: Expenses are the responsibility of the farm or ranch owner, but results in ownership of all electrical output. The plan provides numerous incentives like federal tax credits and additional refunds. Third-party ownership: While only available in some states, systems are purchased by a separate entity such as a group of community investors. Farm owners are re-
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GO SOLAR
on Farm Buildings sponsible for paying the owners for the produced electricity, while also missing out on energy credits. Is solar the right option for your operation? Here are some considerations you should make before going off the grid.
Is it Worth the Cost?
According to the experts at Home Advisor, installing a solar panel system to residential homes costs between $16,467-$30,559. Of course, the size of farm buildings can vary
dramatically, reducing or increasing the national average. To gain a valuable perspective of what you should expect to pay, call a few local solar installers to offer you accurate quotes. Ask them how much energy you should expect to create and determine if the cost of installation is feasible when considering the savings. Another factor to remember is that if the system is beneficial, you can use it as a selling perk if the time comes to sell the farm.
Tax Incentives
According to the Solar Energy Industries Association, the Investment Tax Credit is a 30% federal tax credit claimed against the tax liability of both residential and commercial property. The dollar-for-dollar deduction can be significant for large-scale installations and construction. Check with a tax expert in your area to ensure you qualify for these substantial savings.
Create an Energy Bank
Going solar is not only a great way to lessen your carbon footprint that impacts the environment, but it’s also beneficial in lowering utility bills. Farm operations benefit from solar power throughout the day when the sun is high, creating a bank of stored energy to be relied on during nighttime hours.
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MANAGE YOUR TEAM
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Find a Trustworthy Banker Since the farming industry features unique tax models, incentives and regulations, finding an expert who is familiar with agriculture is crucial to maintaining a solvent operation. The stability of farms can vary due to inclement weather, machine breakdowns and changes in land values. Building a close relationship with a banker can lead to a helping hand that farmers rely on in both good and bad times. A credible banking professional provides more than financial support. Farm and ranch owners are offered knowledgeable advice, treasury management and problem-solving skills. Whether you require assistance to get an operation organized or need help with an established farm, working with a banker who is well-fluent in farming can open the doors to
new opportunities.
Conscientious Spending
An advantage of having a qualified banker in your corner is receiving financial advice before making a large investment. When a farmer’s operation is thriving, it’s common for capital to be used toward purchasing new equipment, funding construction for buildings or excavating land to extend crop space. In advance of these significant expenses, make an appointment with your financial manager and discuss your plans. They can analyze the integrity of your finances and advise you into making a beneficial decision that is advantageous to the farm or equipment.
Times of Struggle
The agriculture industry commonly faces both high
and low cycles which makes planning and saving crucial to staying afloat during troubling times. Fortunately, expert farmers and farmland banking experts understand these trends by analyzing predicted forecasts. However, if you’re new to the field, acquiring an expert with a grasp on projected price increases for machinery, land costs and crop inputs may lead to invaluable advice. During stressful times, a banker can assist in foreseeing difficult farming conditions, and set you up with an affordable loan to provide relief until the market upswings.
Building a Relationship
Working with a banker who is dedicated to serving you and protecting your most valuable assets, expect a valuable relationship to form. Discussing your financial
situation and the management of an operation can be incredibly personal so make sure you feel comfortable with the expert in charge of your ac-
count. Keeping in close contact during both high and low cycles, builds trust between both parties in a farmer-banker relationship.
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Lynn Bolin at the New Day Dairy Guest Barn near Clarksville. BRANDON POLLOCK, COURIER STAFF PHOTOGRAPHER
‘Sleep with the cows’
New Day Dairy Guest Barn accommodates guests MELODY PARKER
melody.parker@wcfcourier.com
CLARKSVILLE – Dairy cows are wonderfully, surprisingly social creatures. Some cows like to keep moving, sashaying around the New Day Dairy barn and stopping here and there to say hello, or gather in groups of three, four or five cows to exchange bovine gossip. Other cows settle down in their stalls, nap, graze and wait for callers. Several times a day, the cows saunter over for milking by Rita the Robot.
Guests can watch it all from a pair of large windows in the loft at the New Day Dairy Guest Barn, 13000 175th St., near Clarksville. The new bed-and-breakfast accommodation is where you can “sleep with the cows,” said Lynn Bolin. She and her husband Dan, known as “Dairyman Dan,” will open the guest barn in mid-December with one bedroom, a private bath, full kitchen and sitting area. Two additional bedrooms and baths will open in the coming year. “We offer the unique aspect of
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staying on a working dairy farm, a fully operational farm that has been Dan’s family farm for 125 years,” Lynn said. The European-inspired guest house that overlooks the barn is modern, bright and comfortably furnished with farmhouse chic and accessorized with just enough cow-themed tchotchkes to give it that perfect sense of place. The Bolins build the new farmstead in 2015, adjacent to the historic family farmstead. They lived in what is now the guest barn while building a home on the property. Beyond the adventure — and chance to take a great selfie with a friendly Holstein, the New Day Dairy Guest Barn is more than an Instagram moment. It’s an opportunity for guests to learn about where their food comes from, said Lynn. She grew up near Minnesota’s Twin Cities and admits her own farm experience was limited until she attended Iowa State University in Ames, where she met and married Dan. “There’s a growing curiosity for people to find out more about farms and how food is produced, and people are enjoying new, different experiences, so why not come sleep with the cows and see how cows are milked on a modern dairy farm?” New
BRANDON POLLOCK PHOTOS, COURIER STAFF PHOTOGRAPHER
A view of the cows in the barn from windows in the loft at the New Day Dairy Guest Barn. Day Dairy belongs to Prairie Farms Co-op and their milk usually goes to make cream cheese and Swiss cheese, Lynn explained. The dairy is a Silos & Smokestacks site that regularly hosts school groups and other visitors. Although Dairyman Dan knows the names of the 150 or so cows, the plan is to paint a different color stripe on six cows. Guests can learn the names of these “Super 6,” find out when they were
DON’T MISS THIS OPPORTUNITY! AgVantage FS is now offering our Advanced Field Analysis that will alert you to yield limiting factors in your field that cannot be seen by the naked eye. Advanced Field Analysis includes multiple UAV flights over your contracted acres during the growing season, with crop specialist follow-up to discuss finding and provide solutions.
born, their calves and other details on a posting in the common loft, then watch their comings and goings in the barn. And if you wake up in the middle of the night, you can always climb the stairs to the loft, sit at one of the pub tables, sip coffee or tea and check out what the cows are doing at 3 or 4 a.m. It’s also a perfect place for board games, cards or puzzles. There’s a dining table for the conti-
nental breakfast — bagels, cream cheese, yogurt, granola, milk and such, and occasionally, Dutch letter pastries prepared by a neighboring farm family. Guests also can purchase groceries and cook their own meals in the cheerful kitchen. There’s an introductory tour when guests arrive and a farewell-to-the-cows tour at the end of their stay. For folks who want a real-life dairy farm experience, up to four guests can add the “Be a Dairy Farmer” challenge to their stay and spend 1 ½ hours with Dairyman Dan feeding a bottle to a calf, moving among the cows to shovel manure, riding a tractor and stepping inside the control center that operates Rita the Robot. In the warmer months, visitors can enjoy the guest barn porch and gardens and hike or bike on the Rolling Prairie Trail just a mile away. Charles City is within easy driving distance for whitewater rafting, the Carrie Lane Chapman Catt Girlhood Home and Museum and the Charles City Art Center. Mason City and Waverly are other hubs for activities. Accommodations start at $125 per night; discounts will be offered for additional nights. The New Day Dairy Guest Barn will be listed on AirBnB and VRBO. For more information, visit www.newdaydairy.com
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YOUR LIFE’S WORK WILL BECOME YOUR LEGACY. Are you ready? Life doesn’t wait for the best time to pass along your legacy. This is why it’s crucial to develop a successful transition plan. In uncertain and stressful times like these, it becomes clear that waiting for the opportune moment just isn’t enough. Start the conversation today to strategize the success of your next generation.
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