Sophie Clarke, Author at Sproutag

With an ageing population and a decrease in young people entering the workforce, many businesses are faced with a shortage of quality employees. As the baby boomers begin to retire, the comparatively smaller workforce of young workers means it is more important than ever to plan ahead when considering employment, succession and business growth.

Our purpose at SproutAg is to help our clients grow, and we do that by providing services that lay down the foundation for a successful future. In particular, SproutAg’s Ag Pro program assists clients in business growth and planned succession services to help farming businesses transition over time.

When helping clients undertake successful succession planning, one key barrier is the inability to source people in their business due to the lack of talent in the area. This lack of skilled employees greatly inhibits business owners in their ability to tap into great people who can manage or work on farm. Advertising on a singular platform for job seekers, such as in the newspaper, contributes further to limiting this pool of potential candidates.

Attracting people and talent into a farming business is often treated as an administration task with little to no strategic planning in the process. It is often the case that a single person in your farming business managing your farming operation can have a considerable impact on your overall profit and loss. Having competent and reliable people in your business allows owners to step away from the farm with confidence that it is being looked after, which is crucial to sustaining a viable long-term business. 

It can take at least twelve months of planning to be able to source the right people for your business. Obtaining good people for your business requires forethought, planning and time. It is not an overstatement to say it can be one of the most important decisions that you can make as a farm business owner.

Having good people in your business

– Allows you to scale and increase profitability.
– Allows you to get away from the farm.
– Reduces risk in your business.
– Allows you as the business owner to concentrate on growing and strengthening other areas.

Tips on sourcing people

– Plan ahead and allow a good amount of time – Start twelve months in advance (yes, twelve months).
– Involve people as part of your annual planning meeting.
– Get a professional to assist you in obtaining talent for your business.
– Start with a wide net of potential candidates.
– Take the time to get to know the best candidates before choosing someone.

Effective succession planning is like playing team sport – the better you plan, train and work with your team, the higher chance you have of winning. Similarly, the higher grade you play at, the more the intensity increases, training gets harder, commitment is more vital, and the game is more difficult. You might have noticed that teams at the peak of their sport are also supported and governed by a lot more people. When two generations come together on the farm to usher in a new era, it’s akin to stepping up and playing a higher level of sport in that the more people who are involved, the more governance is required.

Having a strong plan for the direction of the team is a crucial step towards reaching your shared goals. There is often a misconception when completing a farm succession plan that the transition will take place as soon as the plan is finalised. Eighty percent of our plans are not about immediate succession, but rather setting a defined direction for the transition of the business or land in the future when the older generation are financially independent from the farm.

When should you start transition planning?

The best time to start planning for your farm’s future is before the next generation enter the business full-time. Often this is after having completed a trade, university, farming business school or from working professionally.

What needs to be considered at this point in the game?

The first step is to carefully consider the existing policies in the business around:

– Assets – what are the policies around the farm and the off-farm assets?
– Employment – how do people enter and exit the business?
– Non-working and working family members compensation policies
– Business – how does the business support this?

Getting succession ready.

At SproutAg, one of our most important statements is ‘succession ready’. This means the current generation/owners are equipped to take charge of the transition process early, allowing them to take the front foot for a smooth and successful transition. The process enables them to articulate and lead the family as the current family leaders.

The importance of these decisions being led by the family leaders cannot be understated. The way a team looks to their coach for guidance is not coincidental in that a clear leader who is on the front foot to provide direction and clarity is essential to success. Initial transition planning is best completed at this time to formulate a strategy for the current owners and set expectations going forward.

For more information on succession planning click here.

The pitfalls of not having a plan.

Having a clear succession plan in place sets the foundation for the future of the farm. Like running onto the field without a game plan, you can’t expect a peak performance and winning results. On a farm, what often happens is the next generation grow up working on the farm, and when they get married and have children there are no guidelines or policies in place. This then causes friction between multiple generations and their families working on the farm. Taking the initiative to complete some initial family farm planning at this point can alleviate these issues and set the business and the family up for success.

Family farm leadership.

Effective leadership is very important, however unfortunately with leadership comes many challenges. At times, not every decision is liked, however the family farm requires leadership around transition.

The challenge with family leadership is that there is an inclination to coddle as a parent, and often it can be difficult to distinguish between family relations and the farming business. While a family business has very important aspects and has a strong structure, there is a risk that the focus won’t be on the business and there will be too little leadership allowing for indecision and a lack of clarity.

Key Messages:

– Two generations working together is a heightened risk and additional governance should be put in place.
– Start your transition planning early and get some work done and it will assist the business in the long term.
– Succession isn’t the traditional thinking where it happens straight away, it’s vital to set guidelines early.
– Our succession ready program is the best work we do as it is proactive.

Author: Sophie Clarke

Boost productivity through the power of people

Lift your game to peak performance with a strong succession plan.