Starting Farm Succession Planning
Farm succession planning is focused on the why, what and when with little emphasis on getting the discussion started. It’s not surprising given the sensitivity around succession planning, but it doesn’t need to be a bad experience if you start in the best possible position.
From our starting point, Sprout Agribusiness thinks of farm succession planning as a transition recognising it’s not a process that happens overnight. Succession planning can take years as challenges, goals, and aspirations change over time, and the family needs to acknowledge and evolve.
A succession plan should not start as an argument between siblings who expect farm assets to be split overnight. This is a plan for failure, so before any family begins planning, it should be done in a calm and thought out way.
Everyone should have a clear understanding of what they want their role to be on the farm. Roles are essential for the older generation handing over the farm as they need to establish what they will do before and after retirement and what their lifestyle expectations are.
Getting succession planning, or transition planning as we like to call it, relies heavily on defining the older generation’s role. Another essential foundation is determining your family culture so you can line up everyone’s thinking with a shared set of values.
With everyone on the same page with family values, we ask everyone to think about their role in the farm business and what their goals are – this includes those who are not working in the business. With these written down, the next step is to look for common ground and where people disagree and why. It is also essential to look at the business’s health at the same time and flag if a goal is just not possible.
It helps to write down the family culture, roles and goals onto a one-page document. This forces the family to be very clear and concise about what these are. We suggest an independent person or expert who can facilitate the process to provide an objective ear.
In meetings, from the beginning, define an agenda that gives everyone a say to talk about their aspirations and roles. Throughout the process, keep an open mind and listen and speak up and talk about your expectations so that everyone feels ownership over the plan. Like a board meeting, the agenda should include time allocated to keep the conversation focussed and on track. Expect there will be times of conflict; that’s ok; succession planning is personal. You might consider conflict resolution training, so discussions don’t stop with arguments.
Lastly, take the view that transition planning is a live process, so don’t think that the plan is packed away once it is done. Instead, get the family together regularly to discuss and revise the plan as circumstances change.
If you want to talk about succession planning, contact your local Sprout Agribusiness representative.