Succession planning: the time to talk is now

In this first article in a new series on how to run a family farm successfully, Trevor Dickinson, CEO of specialist consultancy Family Legacies, writes that the key to a profitable, long-lasting business is to start a family conversation about succession planning. And this needs to happen sooner rather than later.

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Succession planning is crucial to the long-term success of a farming business, and should therefore be a major component of the operation’s strategic plans. Yet all too often it is not. One reason for this is that it can be overwhelming to get started, so many farmers end up failing to clearly identify a successor or create a properly thoughtout handover to the next generation.

LOGICAL STEPS

Think of succession planning like producing a crop: it does not happen overnight and requires many small steps from seed to sale. Here’s a plan of action to get you going:

• Schedule a family meeting

Succession planning requires input from the entire family, including current farm partners, as well as your children and their spouses. The process should get under way with a series of conversations, and during these you should talk about your target retirement date (even if it is a decade or more down the road), as well as your goals for the future of the farm.

Understanding how each stakeholder feels about passing the farm on to the next generation is an essential first step in succession planning.

• Assemble your team

It is always best to use experts to facilitate the process. They will also offer advice on the legal and tax implications of various decisions. One of the many advantages of having such a team is that you will gain access to the different options available and the best ideas. Make sure to choose advisers you like and respect, and who work well together, and prepare to have them involved throughout the process.