Balancing need with ability to pay

In many family agribusinesses, succession is a period not only of highly charged emotions, but of danger, for it is at this stage that the capital integrity of the operation may be put at risk. Most family businesses that progress through the classic phases of business growth (survival, stable, professional and institutional) have figured out how to transfer ownership down the generations without threatening the capital base.

A major deterrent to building and preserving an adequate capital base for a family agribusiness is the senior generation’s perception that it must somehow harvest its equity during the succession process. That perception is neither right nor wrong.

Family businesses are sold every day to facilitate such harvesting, and, for the senior generation that built the business, selling may well be a natural