Succession planning for farming families can be quite daunting and there certainly are some horror stories on how it can spiral out of control. The flip side is succession planning can be a very rewarding process for all involved if tackled with goodwill and respect.
Three tips to help get your succession plan moving in the right direction are:
- Be proactive and start early
- Focus on the big picture, initially
- Engage a professional adviser to assist
The biggest obstacle to succession planning is often a lack of trust between family members. It can be quite difficult to reach an agreement if the succession planning process is reactive due to a catalyst, such as a breakdown in family relationships, unexpected death, injury or loss of mental capacity.
A family that has been proactive, started early and been transparent about its succession planning is much better placed to handle difficult situations that may arise. The need to start early is important as it provides clarity to all family members and will create a greater understanding and alignment of family members to the overall succession planning goals.
Farming families should try not to get bogged down in the detail of a succession plan. The initial focus should be on the “big picture” and trying to reach an agreement on the overall goals and timeline for the implementation of those goals.
Often a business planning tool such a “Now-Where-How” can be used to develop a succession plan by focusing on the following aspects:
- Now- Understand the current situation
- Where – Where do we want to be in three, five, ten, twenty years?
- How- What needs to be done to get there?
A professional adviser can assist in the succession planning process by:
- Making sure everybody is involved in the process and has a chance to express their views and what they would like to see happen.
- Managing expectations -sometimes the best outcome we can achieve is where everybody is not necessarily completely happy but can live with the outcome and move on.
- Asking the hard or difficult questions of family members – this would be better if the family accountant, for example, loses a bit of skin in the process rather than have family members in conflict with each other.
- Making the family accountable for decisions made and keeping the process on track.
- Providing advice or sourcing solutions on the “how” part of the process.
- Assisting in the documentation of the succession plan.
Engaging in the succession planning process can be an immensely rewarding experience for all and should be a priority if farming families are serious about protecting their farming and family legacy in the future.
HOW CAN RSM HELP?
If you have any questions regarding succession planning for the agribusiness industry, get in touch with your local RSM expert.