This time on GEAR UP, Co-Founder Mark Stock digs into the DIRTT Project with special guest Rena Striegel. Rena is dedicated to helping farmers navigate the complex challenges of succession planning through the DIRTT project - a comprehensive guide through the emotional, operational, and financial aspects of transitioning their ag operations. Listen in to uncover how the DIRRT project is helping agricultural families work through big life decisions.
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Transcript:
Mark Stock 00:00
Hello everybody. Mark Stock here and we're gearing up this week, brought to you by BigIron. We're gonna be talking about the dirt project here in a little bit. But before we get to that part, you know, why don't you introduce yourself to who you are and where you're from, and then we'll spell dirt. So my name is Rena strieg. I own a company in Des Moines called Transition Point business advisors. I'm an Iowa farm girl, so grew up on a dairy and hog operation in watch here, Iowa. So as if my first and last name aren't weird enough, also, the town I grew up in is also a challenge to say.
Rena Striegel 00:51
So my name is Rena Striegel. I own a company in Des Moines called Transition Point Business Advisors. I'm an Iowa farm girl, so grew up on a dairy and hog operation in What Cheer, Iowa. So as if my first and last name aren't weird enough, also, the town I grew up in is also a challenge to say. You know, traveled around a lot and ended up right back in Iowa working with farmers, which my grandmother, who was a long time, lifelong farmer. You know, she never really appreciated a lot of my choices, but the one thing that she did say to me when I came home to work with farmers is she said, Well, if you're working with farmers, you'll be happy for the rest of your life. And that has, there was never a truer thing that was said. I have have thoroughly enjoyed being back in Iowa and doing the work we do that we're going to talk about in a little bit.
Mark Stock 01:26
So you went to high school in Iowa. You went to college in?
Rena Striegel 01:30
I went to undergrad at Central in Pella, and I got my graduate degree. And I always say this like with a little fear, because I never know where I'm sitting for sure, at Iowa.
Mark Stock 01:39
Iowa. Well, everybody in Iowa loves BigIron because of our yellow color.
Rena Striegel 01:43
That's right, that's right.
Mark Stock 01:44
They love that. So that's good. But now you spell dirt with an extra "T" and tell us why?
Rena Striegel 01:49
Well, it depends on what part of the country that you're in of how you think that all works, but it actually is an acronym. It's the dedicated internal resource for training and transition, basically all of that to say is, it is a program that was developed to help farmers through a the process of succession, so to help them know all the conversations to have the the tools they need to develop, the habits they need to get built onto their farming operations, and, of course, an effective way to work with the professionals that need to support all of those things. So it's a it's a cute little name that has a lot of powerful things inside of it.
Mark Stock 02:30
So that's what we're talking about now, folks on Gear Up is the transitioning and different components of agriculture, whether it's a working family farm,
Rena Striegel 02:38
Yes
Mark Stock 02:38
Whether it's the exiting of the family farm, whether it's the distribution of the estates or the real estate within the family farm. And why don't you tell us what got you involved in helping farmers and ranchers, not only in Iowa but all across the country, in their transitioning to that next generation, transitioning out.
Rena Striegel 03:01
It's kind of a very long story. You know, a lot of farm kids think that it's time to go out and see the big, wide world, right? So I did all of that, went overseas twice, have done a lot of things in my career, but one of the things that I was always really driven to is the efficiencies and optimization of business. That's been something that I've been fascinated with for most of my working career. And I just happened to be working in India, and just really had that pull to come home as a lot of farm kids do, they just get that sense of, I want to be close to home. I miss Iowa. I miss the Midwest. And just happened, the ticket home was a job opportunity with Transition Point. So I started working with the company as an employee, as a consultant for that firm. And the firm was originally founded to help with the emotional component of succession, so the relationships, the dynamics, the dysfunction, the big decisions, the angst that comes inside of that work. And the financial planners that founded it were like, well, we love data and numbers, but this emotional stuff, this, this over here, is hard and not really what we're equipped to deal with. So, you know, I was lucky enough to be hired on as a consultant that brought me back to Iowa, and then a few years later, as a part of their succession plan, I was able to purchase the company. So I became the owner ofTransition Point in 2019 at that time, what I had noticed is that there are resources galore for businesses that are not agriculture in nature, they there's lots of ways that a business that is going to be sold can get access to information, to resources, to people that will support that on the farming side, that that creates a whole different level of conversation, because. Of the history, legacy, emotion, you know, my first pony ride, my first broken bone, my first, you know, thing I drove. There's a lot that goes on over there, and agriculture is just not well supported in terms of the resources and the expertise to be able to help families through that. So in 2019 I just made the executive decision that we are going to focus 100% of our time and energy on agriculture, and that is what we've been doing. We we were always in the ag space, but now we are 100% in the ag space, and I'm really proud of that. And so along the way, our our goal always has been to develop, create and be responsive to the changes in agriculture, so that succession planning, those resources that we're giving to them are kept up to date and are dealing with what they're dealing with on the farm. Now we first met has been what, two years or three years ago, I think three now, yeah.
Mark Stock 05:57
Three years ago at a top producer
Rena Striegel 06:01
Yes, yes.
Mark Stock 06:02
And you were putting on a short version of your normal three day
Rena Striegel 06:08
Yes
Mark Stock 06:09
Versions of how helping people transition,
Rena Striegel 06:13
Yep.
Mark Stock 06:13
And you have an upcoming event, and you and you have several events, but tell us about your the dates of your the dates of your upcoming event. We just want to get that in there, and then we'll talk more about everything else, but so they can everybody write these dates down.
Rena Striegel 06:28
Yeah. So the dates are December, two, three and four in Des Moines. It's going to be held at the Landis Innovation Center. So if you've not had a chance to go to the Landis Innovation Center, it's an amazing, amazing facility. So we're gonna be housing it there. And we're really excited that big iron is gonna be there, and Mark, you're gonna be helping to deliver some of the content. So I am incredibly excited about that piece of it.
Mark Stock 06:52
And that's what drew me to you know, this the DIRTT project was I sat in on that class, that one day short session that you put on, and you grabbed me with your conversation about the situations you've had in helping people initially start in their thinking about, how do I transition? And we're talking most of these folks are, you know, the seniors in our crowd. You know, they're the anywhere from 55 to 75 even 80 years old, that are just going, what do I how do I do this? Okay, I've got a I've got a son or a daughter, or I got a grandchild, yes, or maybe I don't have anybody or anybody, and maybe, maybe I've got a neighbor kid that I really like. And what do I need to do to help that person get a kickstart, and then you have, you know, a process and a program to help in all aspects of those.
Rena Striegel 07:47
Yes.
Mark Stock 07:48
So let's pick on one of them. What is the most common type of transition that is out there that you've seen in your career?
Rena Striegel 07:56
I wish I could say that there is this thing, because then we could just write a playbook for that thing. Hand it to everybody, and succession planning would just be not an issue, right? Like if it was, if it was a one size fits all solution, succession planning would not even be a topic. The challenge that we have is that we have so many different demographics, and we have such diversity in agriculture that it's you've got to almost look at every single farm as its own character in the story, right? So we've got the family that owns it now. We will have the families that own it in the future, and somewhere in the middle, we've got to make sure that this business stays alive and vibrant, adaptive, innovative and, most importantly, profitable. There's always a heavy focus on who's going to own it, right? So a lot of times, that's where the estate plan comes into place. Or sometimes we've got some transactions that are happening during lifetime, but oftentimes that focus that we forget that we've got to we've got to develop not only great operators, but we've got to develop leaders. We've got to develop business owners, and we've got to be able to manage these really robust, diverse, exciting, dynamic businesses alongside all of this other stuff. So when you talk about what's typical, you'd have to say, well, it is the 60 to 70 year old business owner that is ready to start to exit and transition the ownership of that company to the next generation, whoever that might be. What we are seeing now, though, is we are seeing because of some of the horrible stories that are out there right farms that are lost, families that are fractured. We're starting to see now that there's a real understanding of those business owners that are in their 30s and 40s to say, hey, we've got kids that are starting to demonstrate some interest. We want to make sure that we're setting this up early, and we want to understand what it is that we need to do, because there's a lot on the business operation side that they can be doing that sets the stage for everything that will come later, and the longer that a person allows for the plan of what they want to do with the business at the end, the easier it just becomes on everybody, including the business itself, because we've got enough time to stretch out that financial component. So there's no typical but we're certainly seeing a lot more people engaging in the discussion a lot earlier, so that we don't have that big, stressful end transaction that often causes families a lot of distress.
Mark Stock 10:30
In addition to the class or the workshops that you put on you do this year round, where you actually go to the farmers and ranchers place of business, yes, and you work with them directly, tell us how that works.
Rena Striegel 10:43
So that that's a real simple process, right? Somebody hears me speak, somebody gets a referral from somebody calls me up, says, you know, we spent two hours on the phone talking about what's happening, and that, if there's a good fit, you know, then I'll say, well, here's how we could help. And here's what I would do, and I go out to the farm for a visit, and, you know, get to do the things that I love to do, which is to strap on boots and go out and look at fields and tour facilities and talk to families, and hopefully be able to help them with some recommendations based on their unique situation that will help them go from point A to point Z.
Mark Stock 11:22
Now, you said something earlier today that I thought was interesting, because you were meeting with some folks, and a gentleman said, I'd love you to I would love for you to help me, but I can't afford for you to help me.
Rena Striegel
Yes,
Mark Stock
Why don't you tell our listeners that this is not something that's not affordable for them.
Rena Striegel 11:38
Yeah, that all came out of a conversation that I had when I was doing a workshop at a at a conference in Iowa, and a farmer came up to me and said, you know, everything that you say, I'm buying into it. I get it. It's what we need to do, but I can't afford to have you help me. And that was a real, sort of shocking statement, because, number one, there was no conversation about what the price was right, like he just was making an assumption. And I think that that is one thing that's out there, is that there is the assumption that if I have to call my CPA, if I have to call my attorney, if I have to call a mediator, there is going to be such an extraordinary cost to it that we cannot afford to get people onto the farm to help us. And you know, when you look at the asset value, the overall estate that any one of these farms may have, and you think about that very small fee in terms of the larger hole, it's a very small fraction. But that to the side, I understand fee fatigue. You know, when I have to work with my attorney, I see the bill coming, and I take a deep breath, because I know I'm not going to like it, so I get it. So what I felt really sort of convicted to do is to bridge the gap between really great resources professionals that are very passionate about helping farms to be successful, doing this work and cost and so that it was the birth of the DIRTT project, honestly, that that one challenge from that one farmer set in motion a whole new thing that has been a really exciting journey.
Mark Stock 13:19
Why don't you give us your website here real quick so we can get that snuck in?
Rena Striegel 13:23
So for the DIRTT project, it's just thedirttproject.com and that's the website that you can find out everything about upcoming events. You can see agendas. You can see instructor profiles. Because I think the one unique thing about our instructors is that they're not all lawyers and CPAs. We actually have farmers that volunteer their time to come to help other farmers. So a lot of the stories that you hear or the implementation strategies all come from farmers who have done it. And so I think that's a really cool thing about the dirt project. So that's one website, and then our transition point website is just transition point B, as in, boy a as an apple.com and that's where you can see all the things that we do on the consulting side. So we’ve got two different places that you can look for things.
Mark Stock 14:15
So in your profession now, helping all these folks transition, it's not only just a working operation. You mentioned something before you even help somebody with an organic worm farm.
Rene Streigel
Oh, yeah.
Mark Stock
So you get all gamuts.
Rena Striegel 14:30
All gamuts. We've done alligators, catfish, dairy, hog, vegetables of every kind. Spinach, I mean, you name it, apples, we've got sod, we've got it all. We've done it all. It's really fun. It's really fun.
Mark Stock 14:48
And what's unique about this. Because, you know, agriculture is so diverse, from the livestock to the grain to the fruits, the vegetables, the fuel, all of that stuff that makes up agriculture is hopefully. We always transitioned on which is why BigIron is involved with this project. Because we want farm families to continue to thrive. We want farm families to continue to pass on to the next generation. We know that farm families need equipment, need land, and that's we're here, there to support them and fill that partnership with them. But, you know, we want the transition in agriculture to pass through, but in our profession, we see so many times that it doesn't go like what I think the parents had hoped for. A lot of times we see people, well, how are you coming with turning your farm over to your kids? And a lot of the folks listening out there, maybe a lot of the youngsters listening out there, they probably need to have a conversation with their parents, because some of their parents think they're just going to die and let the kids worry about it. And what I've seen from my vantage point and what you've probably seen from your side are very similar. When the parents die, they always make the comment, well, I'll just die and let the kids fight about it. And guess what they do. They fight about it, and they fight about it. And in many cases, them, the siblings never talk to each other again. And you are trying to help alleviate a lot of that.
Rena Striegel 16:16
Yeah, you know, I think the the funny thing about having death be your plan is that it is the one thing that we really have no control of timing, right? You don't know the day, you don't know the hour, it will always be sooner than you want it to be. It's coming around the corner for everybody. And I do think that those are the stories that are, you know, they kind of they do something to you, right? When it's a farm family that calls you that says grandpa died, this is what he said he wanted. The documents don't support that we now have a mess. Or, you know, a husband passes away, and the kids aren't quite old enough. And how do we bridge the gap? And so those are, those are the sad stories honestly, and those are the, probably the most stressful, because everything in life, if you can do the planning while people are still alive and can sit around the table, you you get not only the plan, but you also understand the meaning and the rationale and the why are we doing it that way? And so when you know someone makes the decision that farmland will go to the farmer and the off farmer is going to get other assets, there could be some emotion about that, but if you understand why that decision was made, it's a little easier to pallet. It doesn't create those generational upsets that get carried into Gen two and Gen three and Gen four, because I've sat on farms where something happened to three generations in the past, but that is still clouding what that family is talking about and what they believe about what is going to happen now. So when we can work all that stuff out, even if it doesn't go exactly the way someone wants, at least there is an understanding of why, and that's real power in terms of if you want that farm to be 100 year farm, right? 100 years of doing this. And I will tell you, I brought on our first international farm a couple weeks ago. They are in Italy. They That family has owned that farm for 1500 years. Oh, my goodness. And I jokingly said, you've done more successions than I've even seen, so maybe I should be learning how to do succession planning from you. But the funny thing about that farm was it's the same issues. Sister owns farmland. Farm. Sister lives in city. They're worried about, how will we get that if she passes away? Dad and brother are on the farm unequal number of kids. Yeah, same. And I just sat there thinking, isn't that fascinating that the length of time doesn't matter? We still got to deal with the issues of people and people what they need, what they want, what they feel, and at the heart of it, no matter how long you own the farm, if you don't set up a great legacy of succession, you are going to see the same things 1500 years later.
Mark Stock 19:12
Why do you think it is the world's best kept secret? You know, when mom and dad don't want to tell the kids why they're alive, what their plans are. Why do you think they want them to find out about it at the reading of the will? Why do you think they do that?
Rena Striegel 19:29
I have, I've heard a lot of reasons, right? So I have, I've talked to a lot of people that are from the silent generation, right, which is the generation of we don't we don't talk, we don't tell we are very humble. We keep things very close to us, and I still don't really quite understand it. So it's really, really encouraging and exciting to see now we are moving into a more transparent way of dealing with our businesses, right? I mean, I can go pull anybody's tax return and see what's on them, right? I mean, there's a there's a transparency that is available whether you want it or not, yes, but I am really loving the fact that they are seeing that open communication creating clarity and certainty, which are two of my favorite words when it comes to succession planning, right? We've got clarity about what we're doing and why we're doing but we have certainty that those things will indeed happen because we've done the work that creates a sense of stability, then we can just go and run our businesses and do the right thing and acquire assets, because we know what's going to happen, and we don't have fear that if we invest our time, invest our money, we're going to lose it somehow, because there's secrecy. And so I think, I think the what we're moving into now is very exciting, but we still do have a lot of that, and we have a lot of people that were the product of that, right? They inherited farms under the cloak of secrecy. It created a lot of fear and it created a lot of heartache, and we're dealing with that now, but coming generations are going to benefit.
Mark Stock 21:12
Well, I had one instance where a gentleman told me he's not telling his kids how they're distributing anything, because he thought, if they find out what they're going to get and the value of what they're going to get, it's going to ruin them. And, you know, in reflecting on what he told me, I just thought he didn't do a good enough job of preparing and preparing him how to handle that asset. Because, you know, in my profession, our profession, when we see the reading of the will, and the kids get the ground, or it's in a trust, and, you know, ultimately, two or three years, if it, if it even survives that long, they just turn around, sell it, because they can't get along, and they're fighting all the time. And I think a lot of those instances would be avoided if you just sat around the room and talked about it, which is what kind of your program is geared up for. So when they call you and they ask about or they tell about their situation, you come see them, you start a relationship and helping them to establish some sort of communication skills that part of your program.
Rena Striegel 22:20
Yeah, there's a lot of layers to communication, right? You've got your greater family communication, which is, you know, kind of keeping everybody informed at a high level. But then you as you build down into it, there's going to be, you know, some of the family that is more informed about some things than others. And so, you know, when you start to think about a communication strategy that goes around these decisions, you know, two of the main components of that is to make sure that we have successors that are prepared, but that also we have heirs that are prepared, and whether that is heirs that are working with successors in terms of jointly held assets, whether that is the understanding about how to manage assets effectively and that, okay, yes, you might be inheriting some farmland, but it is maybe not what you think it is based upon something that you read from a non agricultural source in terms of the money you're going to kick off of it, right? So making sure that we've got all those groups of people that are appropriately educated, and then, quite frankly, there's a decision that needs to be made is, if you see that they cannot get together and work together during life, why in the world would you strap them together legally at death? Right? Like there are some decisions that need to be made around how your heirs demonstrate the ability to work together that should drive some of the decisions that you're making. And I know that that's maybe like a hard hitting thing to hear, but I think that's also the reality, and why we see so many of these relationships fail is that people get tied together with very little thought or preparation for that, and it's kind of like just going out and randomly selecting somebody off the street and saying, Hey, do you want to go into business together? And if we don't know anything about each other, except for whatever little fights we had when we were kids, we could be in for a rocky road. So part of this is making sure that you have the right conversations and the appropriate expectations set, so that everybody gets into business with each other in the right way.
Mark Stock 24:19
Now we're talking about some of the contentious and confrontational,
Rene Striegel
Oh, yeah,
Mark Stock
Your business however, there are a lot of cases where everybody's very amicable.
Rena Striegel 24:28
Yeah, we have a lot of people that just come to the table and say, Hey, we don't really have any dysfunction. Everybody's working really well. We have a lot of commonality. We've even got some of the things in place, right? We're doing business meetings. We are. We've got a really good and updated estate plan. We just want to make sure that we are looking far enough down the road that we can anticipate what some of the challenges might be. And so there's families that have done a lot of work on this already. They are functioning. Well, they're running these really lovely businesses having a great time doing it. But education is key, because just like anything, succession planning changes every year, just like tax laws do, just like a state, it what we know about it, the tools we are able to use, the little loopholes that we find that benefit. Ag, those are an every year, all the time occurrence. So you know, working on your succession plan from the second that you hit the start button till the very last day that you own an asset you're gonna, you should be working on your succession plan every year, even if you think it's already in place always and things change so much and so rapidly that if you are not continuing to be engaged in it, you you don't get the benefit of what we've learned now, you're still working off of old information. So it is kind of a process and set of activities that you've got to build into, okay, every year we're going to spend a little time on this, even if we think we've got it locked down.
Mark Stock 26:06
So the lesson for today's podcast, folks, start your communication. If you need help with that, get a hold of Rena Streigel. Yep, and she is the founder of the DIRTT project, and she has been our guest today. And in fact, we've enjoyed this so much. We're going to have a second version of the podcast to talk more about the upcoming event that we mentioned earlier on in Des Moines, that will be December, 2-4, second through the fourth. And how to register - in fact, you can register today. You can register today. And how do you do that?
Rena Striegel 26:40
Go to thedirttproject.com. Dirt is with two T's, or if, as they say in Alabama, dirt tea, in case anybody wants to throw a little way to remember it.
Mark Stock 26:52
There you go. And you can be from anywhere in the country, because everybody is open to the your workshops from no matter what the type of agricultural business they're in, and no matter where, what state they're from.
Rena Striegel 27:04
Absolutely, so whether it's agribusiness or production agriculture, we've got a seat for you if you think, well, who in the world wants to go to Des Moines, Iowa in December, which even sometimes I wonder about why we're in Des Moines, Iowa in December, we are doing a live stream. So interactive live stream, which means you can participate in the workshop right from your office at home. You'll be able to ask questions. You'll be able to participate in talking to the professionals. So we're really excited to be able to offer that this time, and it's the first time that we've done this. So we will have, not only our in class audience, we will have a whole virtual audience working right alongside of us.
Mark Stock 27:44
Sounds exciting. I'm looking forward to participating in that as well. That's going to wrap up this version of Gear Up here, brought to you by BigIron. And please, as always, if you like this information, share it with your friends. You can find these podcasts everywhere, I think wherever our podcasting team is sharing this information like it, and of course, get a hold of Rena for more specifics on how she can help you. This really caught your attention like it always catches mine. Thank you very much.