When it comes to having a family-run farm operation remain that way, succession planning can be an uncomfortable, sensitive, but at the same time necessary step.
People can’t, or don’t want to run the farms forever and having a plan in place focusing on how to move forward once the time comes can make things a little easier during transition periods.
One of, if not the most important element of succession planning is communication. Communicating the intentions, timeline, questions and concerns will help keep the transition period transparent and allow for everyone involved to be on the same page.
Here are some things to consider when succession planning is on the horizon.
Start early, involve everyone and review
Beginning the succession planning process early allows for more time to consider every element of the plan itself. The plan may not come into effect for an extended period of time, but it doesn’t hurt to be prepared.
By including everyone involved with the farm in the process, it allows for more avenues of communication and for roles to be defined. Some people may not want to be involved with the farm, whereas others want to be heavily involved in the daily operations. Bringing everyone to the table can make it easier to decide where people stand on the succession plan and the future of the farm.
Reviewing the succession plan on a regular basis can allow for the plan to be fresh in the minds of those involved. In the event of someone changing their minds and wanting a different part in the plan, the issues can be tackled in a timely manner and the succession plan can move forward.
Identify successor(s), goals and objectives
Throughout the succession planning process, someone should be chosen or volunteer to be the successor of the farm.
Without goals and objectives in mind, the succession plan may not be very viable. Coming up with a list of them can help the succession plan get off the ground and gain momentum. Some objectives can include meeting a certain profit margin, introducing new crops or equipment and deciding to sell or lease some of the land.
Leave no stone unturned
Consider every “what if” option. What if someone gets sick and can’t help out as much? What if someone decides to leave the farm? What if members of the family go through a divorce? Or a natural disaster? Having these conversations, regardless of how uncomfortable they can be, can help ensure that there are no surprises in the future.
Introduce an outside source
Having conversations with anyone about money, assets and business can be a difficult task. When the conversations are taking place between family members, it can be even more difficult trying to separate personal feelings from what’s best for the business and the farm.
Consulting an outside source like a lawyer or financial advisor that specialize in succession planning can help the tough conversations take place while separating personal and business interests.
Again, succession planning can be a sensitive issue but it is a necessary issue that needs to be discussed. Communicating every aspect of the plan to all parties involved can help the process go along smoothly.