Transitioning the Business to the Next Generation
Featured Guest Writer: Carrie Bomgardner, AgChoice Farm Credit Marketing Manager
For Rodney and Cathy Carson of Martinsburg, Bedford County, there was never a question of their life's dream. "We wanted to farm," said Cathy. "Rod always enjoyed farming."
The couple moved to the Morrison's Cove area, rented a farm, saved money and eventually purchased their own farm in 1990. Today, their 107-acre farm includes a 120-head Holstein herd, milked in a parlor, three times a day. Through the years, they've also added a free-stall barn, an alley scraper, a trench for silage and new equipment.
After graduating with a degree in agribusiness management from Penn State in 2011, Jake, the youngest of the Carsons' children, knew he wanted to continue in the family business. "While I earned the degree, Penn State also opened opportunities to travel in the US and even other countries," Jake noted. "I saw different styles of diaries and applied the ideas I liked to our farm."
With the addition of Jake and his wife Kim to the business, Rod said, "We wanted to develop a transition plan and someone recommended Lacey Coleman, an AgChoice accounting officer."
"We talked to a lot of people before we met Lacey," explained Jake. "It's a real jungle. There are 1,000 different ways to form an LLC. We needed someone to fill in the blanks."
From the Carsons' LLC research and experience, Jake thinks AgChoice meshed both the accounting and legal areas of expertise. "Some folks were strong on the legal aspects of LLCs and forgot about accounting and vice versa. That's where Lacey worked for us, understanding both sides," he said.
"Once we decided on the LLC, it took some time to work through the structure," Cathy explained. "Lacey was very patient with us. She was at the farm a lot to make it happen."
For Lacey, reviewing the farm's financials with both generations was a key first step. "This allowed the entire family to set realistic short- and long-term goals based on financial feasibility. It helped bridge the gap of how and why certain management decisions are made," Lacey said.
Lacey notes that every farm has its own unique set of circumstances and an LLC structure isn't for all businesses. "After taking the time to consider their options and understand the LLC structure, the Carson family made a smooth transition into operating as a family farm entity," she explained. "They are fortunate to have a second generation that loves the farm as much as the first generation."
Since Rock Ridge Dairy LLC was established in 2014, Lacey continues to help the Carson family with any tax consequences or record keeping ramifications associated with their new LLC structure. "Her expertise definitely helped us through it," noted Jake.
Lacey also prepares their monthly records and provides payroll support, tax planning and tax preparation. "Working with the Carson family is an absolute pleasure!" Lacey said.
"We like our relationship with AgChoice because everyone has a farm background," said Cathy. "They understand us."
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