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  Family Business Matters 03/25 05:01 New Frontiers of Family Business Consider new ideas and choices today that may represent new frontiers for your farm-based company as you contemplate the future of your family business. Lance Woodbury DTN Farm Business Adviser Owners of family farms and ranches often have a long and storied business history. When the land was first acquired, or when a family set out to homestead or move to a different location, that purchase or physical move represented a new frontier for the family. It was the initiation of a new direction. It represented a new strategy. It involved changing where they were or what they did in hope of a better future. Similar to those defining points of family business history, there are choices today that represent new frontiers for the company. These frontiers represent changes to your business and to your thinking. Consider the following ideas as you contemplate the future. -- DIVERSIFICATION. The idea of business diversification is not new, and when I mention the idea, the common argument I hear is, "Stay with what you know." I remind the family members, however, that what they know stretches far beyond simply farming and ranching in their particular geography. Land management, real estate analysis, crop production, animal care and nutrition, organizing people and equipment, financial acumen and risk management are all skills that can be utilized beyond your current application. For example, some families have purchased farms or ranches in other geographic areas to mitigate weather risk, while others do so to utilize the skills of great employees, keeping them committed to the family. Some have used their negotiation skills to purchase or develop commercial or residential real estate. Other families have started or bought a business they know something about because of a long vendor relationship, like a grain elevator, seed dealership, tire shop, sprinkler business, construction company or input supplier. Through diversification, these families have generated a new stream of business income, provided an opportunity to bring a family member back to the operation or lessened their concentration of risk in a particular place or commodity. And, they often started with a small purchase or small investment, something they could afford to lose if it didn't work out. -- NON-FAMILY OWNERSHIP. As fewer family members return to the farm, passing the farm to the next generation becomes more challenging. Even when there are family members present, they are not always qualified to lead the company. In response, some families begin exploring the involvement of non-family members as owners in, and successors to, the traditional family-owned business. Non-family members might buy into the operating company, purchase equipment in the business or lease land from the family. In some cases, non-family employees have been sold company shares at a discount, or they have earned ownership through sweat equity. The

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