Getting any succession plan right is important, but farming succession plans have complexities not seen elsewhere because of the many and varied vested interests of family members. Financial and emotional ties that bind a family together but equally can break both the family and the business if not recognized and treated properly in the family farm succession plan.
Finding the Formula
Inevitably when we are keen to resolve an important issue, we look for a quick fix. A formula to which we can apply our particular set of ingredients, stir and get the result. So we can get on with life. But any type of strategic planning is necessarily an exercise primarily in thinking and that can be a bit hit and miss can’t it? But whilst you can’t reduce this type of work to a formula, Munro’s does use a framework that is well tried, tested and understood.
So here are six key elements we use in a framework when we work with clients to help create that farm succession plan:
- The Situation Analysis: This would include a recap of how the family got to where it is now and how family business structures evolved; a look at current strengths and weaknesses, opportunities and threats in order to understand what you can capitalise on and what could be improved; and a detailed statement of all the assets and liabilities as well as legal and operating structures of the business.
- The Conversations: This could be one conversation or, more likely, it could be several. The objective is to sound out the various interested family members on what their hopes and aspirations for the present and the future might be.
- The Family Meeting: This meeting is attended by all key family members. We work through the situation and stakeholder analysis work that has been done and then we ask – so where to from here?
- Formalising the Plan: In writing up that all important blueprint for the future, Munro’s ensures that it is in accord with the family’s wishes and is technically, legally and financially possible and there are no taxation surprises. The plan also details the implementation steps needed to make it real.
- Implementation: Munro’s depth of experience with farming businesses combined with many years dealing with technical matters provides the insight to craft a plan that is practical and implementable.
- On-going Review: There is often a phased approach to implementation and of course, things change over time. On-going review of the original plan ensures that it remains a relevant and living document.
Using the Framework
You will always drive the process. It has to be that way, because this is your succession plan for your family. But using professionals to help deal with the subtleties in the framework as well as the technical intricacies you may face along the way, makes a lot of sense.
It’s your call.