Succession planning is often viewed like going to the doctor, (necessary but not always pleasant). It can actually be a great opportunity to ensure a family farm business thrives into the future and that the legacy of previous generations is preserved and built on.
It is an opportunity to keep families functioning, to create clear direction for the farm business and it can be quite exciting and rewarding.
Just like not going to the doctor when you have a potentially life threatening illness, the unpleasantness lies in not doing it. A poorly executed succession is a far greater threat to the growth of your farm and business and family than poor grain prices or Donald Trump’s Presidency.
The generational legacy can be diminished and families torn apart if the untamed Elephant’s trunk swings around the antique filled dining room of the family farm homestead.
It’s a tricky subject because it’s part of a change system and it involves family systems.
Succession planning is a process, it may take months or years not weeks. It involves humans and emotions and can be stressful. There will be an outcome eventually and if done well, it will be fair and equitable, but it may not be equal.
I recently facilitated a family discussion to get the succession process started. Their feedback: “money can’t buy what you’ve just done Kate”.
So, when should you start? An old Chinese proverb says “The best time to plant a tree was twenty years ago. The second-best time is now”. Kids grow up fast and the prospect of what to do with the farm can sneak up quickly. It can seem all too hard, but once you start to unpack it, particularly with some outside expertise, it’s not as hard as it seems.
Some tips to ensure succession planning achieves the desired outcome include:
- Consider hiring a facilitator if communicating with family members is difficult.
- Have your business accounts in order, knowing how the business has performed in recent times and knowing your net position also makes finding the solutions a lot easier. Sometimes that’s a good place to start.
- Separating land ownership from business ownership is one starting point that works well in the grains industry. That said, there is not a one size fits all strategy for business and/or land succession.
- Every family and every business has a different set of circumstances and your trusted advisors will have good business and legal solutions that suit you.
- Most importantly, it helps to have patience and be respectful to those involved in the process with you.
Good luck and don’t let the elephant destroy that farm built up over generations or your family.
(Apologies to all the elephants out there.-I actually quite like elephants).