Dealing with farm succession can often be very confronting and, for some, quite stressful
Failure to appropriately address such an important family issue is unlikely to deliver an acceptable outcome for anyone!
Whilst being a common thread of desire, weaved into the psyche of many farming families, the concept of business custodianship for future generations is often difficult to translate into reality. Personal fears and insecurities, family dynamics, economic and financial realities are often cause for procrastination that clouds commitment to the underlying desire, resulting in family disharmony and even business “gridlock”.
On a positive note, though, many farming families that proactively recognise business succession as an ongoing process continue to bathe in a glow of united achievement and satisfaction. Having armed themselves with a well-considered planning framework and a willingness to confront personal challenges and possibly uncomfortable conversations, they have achieved an almost seamless succession with minimal angst, family or business disruption.
In our series of articles, Wayne Turner highlights the elements of a successful succession planning process which he subscribes to in assisting farming families with this transition. But he emphasises that the first step must come from within.
The term ‘succession’ literally means to take over a role from someone else or succeeding someone else in that role. It is not about a revolution or a coup!
In a family business environment, it tends to mean the older generation stepping back, if not stepping out, when it comes to their level of business involvement and the role they play. With current technological advancements in farming and grazing practices there is often a very real advantage for the enterprise in encouraging multi-perspective input, fresh ideas and a renewed energy injection from the next generation. By the same token, smart successors recognise the value of experience, the need for a balance between personal autonomy and continuing connectivity for older generations and join with all in approaching the process with respect for the objectives and desires of others.
We do need to recognise, though, that some individuals, in the midst of intricate family dynamics, overlaid with competing objectives and desires, will be tempted to find personal comfort in deferring a ‘stepping back’ or a ‘stepping out’ for as long as possible. But, as we often see, by failing to commence a transition they could not only be missing out on the business advantages that can come from nurturing and developing another level of management autonomy, but also run the risk of missing out on real financial opportunities that have the potential to deliver a significantly enhanced the outcome for all.
By proactively planning for the handover of your farm business and related assets, contemplating the future needs of family group members, borrowings and appropriate entities, be prepared for the unexpected when it happens and gain certainty for the next generation wanting to take over the family business. Wayne Turner understands the difficulty in starting those conversations and can have you and your family turn those into a positive and constructive succession planning process. Call Wayne on 07 4669 9800.
Copyright 2020. Carrick Aland Rural and Small Business Specialists. Dalby, Toowoomba, Chinchilla QLD