Tips for succession strategy success | Talking Agribusiness
It's a confronting topic laced with fear and uncertainty for most families ...
DECISION: A succession strategy is probably one of the more important business decisions your family will make collectively
My neighbours recently mentioned they have a clear plan in place with their kids on how their farming succession will work. I'm concerned that I don't have a plan for my family but I'm struggling to understand how we can make it work?
An effective succession strategy is a smart business decision and, when done effectively, it should set the foundations for your family's legacy. But it requires your time to develop.
A succession strategy is critical to ensuring the succession process, whenever it may occur, happens in an orderly and timely manner. It also helps prevent urgent or rushed action driven by unexpected events such as death or divorce. Accordingly, a proactive approach with a succession strategy is essentially helping to minimise the risk to your business.
A key thing to remember with succession planning is it involves developing a strategy that all generations are working towards - "the sum of the whole working together is greater than the sum of the parts added together".
One of the biggest hurdles with succession in all types of business is the acknowledgement of the succession issue altogether. It's a confronting topic laced with fear and uncertainty for most families and the emotional element is quite often the stumbling block to starting the conversation. Overlay this with the potential for conflict, the time and costs involved, and the discipline required to develop a strategy, and you can start to see why many families avoid the conversation. But it's important to remember these issues are considerations with any business transaction. And when you boil it down, succession strategies are just another business decision, which can be supported and aided by your advisers working together to deliver the financial and structural elements.
With the level of emotional uncertainty involved, it's important to listen, understand and work through the emotional concerns of your family. As the head of the family, it takes courage to be able to work through this and not sweep concerns to the side. But don't forget courage is a clear strength in agribusiness - most have it in spades - and will assist in developing an effective strategy. If you have a will - great. But don't assume it's enough.
A succession strategy is probably one of the more important business decisions your family will make collectively. Allocate the time to address it.
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