Succession planning for rural business
If the impressive turnout and feedback to our recent Smartfarming Expo is anything to go by, it demonstrates just how keen our rural business owners are to embrace technology and look for efficiencies in their businesses. Our session on “Knowing your Numbers” was at full capacity and reminds us farm accountants, that although the financials are second nature to us, we must decipher them into plain speak and take you on a journey to help you to understand the numbers and what they mean – knowing your numbers is the absolute foundation to planning and making better decisions in your rural business.
If you missed the session and would like a run down, then feel free to contact me.
I attended a recent course on farm succession to gain insight into how other advisers in other parts of the country were advising their rural clients on how to approach succession.
The key message was that “Succession is a process, not an event”.
This assumes you undertake a reasonable level of planning over a period of time and develop a preferred outcome that you aim for. Business is dynamic and so the plan must be dynamic also, able to be changed to deal with the twists and turns that rural businesses throw up from time to time.
Not all business owners start early enough and so the planning element can get squashed into a short time frame. In these cases there is little time to change what you’ve got so you are stuck with it. No problem if there is a good balance of off-farm and on-farm assets with one stellar successor. A real problem if there is only one asset (being the farm) and different views within the family on their individual entitlements.
That’s where it is key to involve the right people and cover off the three essential components:
- Managing relationships – getting agreement and compromise between family members
- Managing finances – making sure the solution has a great chance of working financially
- Managing structure – involving your accountant and lawyer early to help with the plan, manage the tax costs and then make it all happen.
My impression is that often there is a lack of formality in the plan or the required team to help you through it are brought in at the last minute and it ends up a real mess.
We have years of experience in succession planning for rural business and we always want to make it a success. We manage the process from beginning to end to make sure it is well thought through.
