BOYCE CHARTERED ACCOUNTANTS
FARM succession is a topic of conversation that can be overwhelming and is often put in the ‘too hard basket’. However, ignoring ‘the elephant in the room’ creates a lack of confidence and uncertainty for all involved. Without a succession plan in effect – for both planned and unplanned events – how will family farm businesses transition successfully? With the festive season upon us, and families coming together, perhaps it is the perfect opportunity to start a few conversations.
Many people have a mis-conception of what succession and transition is all about. People have the tendency to look over the fence and make judgements about what they perceive has worked and what hasn’t worked for others, rather than focusing on their own situation.
Every business is different, as are the individual families and farming properties involved. Family members have to take ownership of the process and outcomes, while professionals, such as Boyce, can help in facilitating and navigating families through the important steps that need to be considered.
I won’t by any means pretend that it’s easy, because it’s not, but it is an extremely valuable and important consideration for any business.
We are often asked, “When is the right time?” and whilst there is no ‘right time’, planning should start early. However, this will depend upon the individual circumstances.
It is a challenging process. Often family members have different expectations in regard to future ownership, assets and aspirations within the business. I believe that families should not focus solely on family members when it comes to succession and transition.
There is not always a family member to ‘come home’ and run the family business, but that doesn’t mean that the farm assets have to be sold.
There are various options to consider when transition occurs; such as leasing, employing managers and contract help which can provide the opportunity for someone to remain living on the farm, while someone else takes greater responsibility for the day-to-day operations. Farm land is an investment and can be held by families for multiple generations, even though there’s not a family member looking after the daily business.
Succession issues will never go away. It is extremely important for any business and that’s why Boyce have a well thought out structure and plan for the transition of our business owners. If this is something you haven’t considered in the past, then there’s no time like the present to start taking some action!
