One thing is certain… circumstances will change.
Running a rural or agricultural business often means that family, business and personal matters are closely intertwined, and as the business transitions from one generation to the next, change is inevitable.
Things won’t always go smoothly, and change can increase the likelihood of conflict, but don’t let it stop you from having the conversations you need to have and enacting the strategies you need to take your business forward.
Successful succession planning is about making the most of your family, business and personal situation. It will take time, compromise and negotiation. While it’s easy to be distracted by everyday business priorities, it’s important to start the conversations about the future now.
Don’t put it off
Unsurprisingly, one of the biggest hurdles to succession planning is the fear of airing opinions and feedback from a range of family members who are involved (or not involved) in running the business, and what it could mean for family relationships.
But avoiding these conversations or not encouraging open communication can actually fuel resentment and frustration.
There are a number of ways to start the discussions, including a structured business review, goal setting exercises or establishing regular meetings or toolbox talks. Encouraging family members to have their say is the first step towards outlining potential solutions for the way forward.
You need to be realistic
Every family is different and will have different views, qualifications, experience working on the land, business management experience as well as varying ideas for the future of the business. And then there’s also different personality types to take into account.
The key is to weigh up the long-term goals for the family business and the needs of each family member. You want to consider the best outcomes in terms of:
• Desired business outcomes, including short term strategies and long-term goals.
• Supporting the retiring generation throughout their retirement.
• Transitioning ownership of the business including fair remuneration.
• Consideration of estate planning needs and adequate provision for all family members.
Bring in the professionals
You can’t do this on your own. You need arms-length professionals who can provide specialist advice including financial planning, lending and estate planning. Perhaps of most importance is an independent facilitator who is adept at dealing with different personalities, bringing all opinions to the fore, as well as articulating options and alternatives that balance out the needs of all parties.
A skilled negotiator Dibbo is accustomed to opening up difficult conversations and managing emotions to help maintain a productive and constructive way forward towards agreeable outcomes. With a career that spans more than 30 years, Dibbo has a deep understanding of the challenges experienced by rural families. He is well-qualified to provide rural advice and agribusiness solutions including financial planning, mortgage broking and business consulting services. Dibbo also has a special interest in developing and implementing practical and achievable succession plans. Dibbo recently qualified as an Accredited Mediator NMAS through the Australian Disputes Centre and his other extensive qualifications include: Masters of Financial Planning | Diploma of Finance and Mortgage Broking Management | Registered Tax (Financial) Adviser | SMSF Accredited (MFAA & SMSF Assoc.) | Margin Lending Accredited | Aged Care Advice Accredited | Direct Investments (Accredited) | Accredited P2P Agri Adviser | Advanced Diploma in Agriculture Management |
If you would like more information about starting the succession planning process, I invite you to contact me today on 08 8253 2906 or email info@financialservicessa.com.au.
Phillip Dibben is a financial adviser at Active Financial Management. Active Financial Management and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306 trading as Fortnum Financial Advisers.
This information does not consider your personal circumstances (including taxation) and is of a general nature only. You should not act on the information provided without first obtaining advice specific to your circumstances.