Major changes in your business are never an easy thing to discuss, especially when it comes to your family farm or business's eventual succession, many owners may be hesitant to prepare for this essential piece of business planning. 

There may be mixed feelings about having to step back or pass on control of something you have helped build. For others, there may be excitement at the opportunity to step up, have more ownership and take on more responsibilities.

Succession is something that all businesses must consider. Even if you aren’t planning on handing your business over to family, it is often the image we think of when talking about succession, there should always be an exit strategy you are working towards for when the time comes. It could be a plan around simply selling up, or getting investors in, rather than handing on.

Unsure where to start? In this post, we will be going over the basics of what this means for you and your business, as well as the importance of practicing early preparation.

What is Succession Planning?

At its core, succession planning aims to identify or develop future owners or managers for your business. Regardless of its size or turnover, every business must take the time to develop a succession plan in the event of retirement, death or illness of a business owner.

 

Tips for Creating a Successful Succession Plan

Planning for future changes regarding your business is never a simple process, but you can ensure its future success by following these key guidelines.

 

Start Early

Fail to Plan, Plan to Fail, the same holds true when it comes to succession planning. Whether you only run a small farm or a rapidly expanding family enterprise, these conversations can’t be pushed aside. Therefore, before anything else, ensure you have dedicated actual meeting times to discuss these topics that aren’t centered around the kitchen table at dinner time.

 

 Understand Your Goals for Growth

Your business’s succession plan is not separate from your overall growth objectives; rather, they are intertwined — what impacts one should affect the other.

For this reason, centering your succession plan around growth is a foolproof way to encourage success. For instance, if your small farm is proving too limited for your agribusiness’s needs, you can take the initiative to purchase more property. Or, if a particular employee requires more experience before moving up a position, you can implement a new training program to bolster their skills and improve their job proficiency. No matter what your succession plan involves, there will always be a way to include it within your overall growth strategy.

 

Involve professionals

We understand that succession is often a private and very emotional matter, which is why having the support and outlook from an external advisor and facilitator can be beneficial. If you would like support around your succession planning, feel free to contact our team at The Money Edge.

Allow yourself time

Successful succession takes time and commitment by everyone. In very simple terms, succession is fundamentally about having a structured and orderly conversation over time. Set the expectations early that this process will take a while, and that it is important for all participants to be open to starting and continuing the conversation for as long as it takes.

Allow for inevitable delays due to workload and day-to-day demands, breathing room for when participants need space, and for open communication (including time to reflect and to ensure everyone is engaged).

Short-term gain can often lead to long-term pain, as rushing through the process may lead to irretrievable family breakdowns or business partner breakdowns. When starting the succession conversation, let everyone know that this isn’t a fast process, and that it is important to take the time to “get it right” for everyone involved.

 

Conclusion

It’s crucial for businesses to plan for the future, which makes succession planning such an integral part of its operations. Whether you own a small family farm or a large business, you can ensure your legacy remains prepared for anything by early planning and effective communication with all parties involved.

The Money Edge | Bundaberg | Grace Campbell