I’ve been on the road a fair bit in recent weeks, helping farming and pastoral families develop business plans for their property and business. This is actually a very privileged position for a consultant to be in; you get to see how different businesses tick, you learn a hell of a lot and get to help people and their businesses along the way.

A decent business plan should cover all aspects of the property and business; the finances, the enterprises, the natural resources and infrastructure and the people. One of the most interesting aspects for me as I have moved around is the people side of things; in particular how different families have dealt with (or not dealt with) the succession issue.

While there’s a whole range of factors that contribute to a successful family business succession (defined as being where the needs of both generations are provided for fairly and adequately, the continuing business is still viable and good  family relationships are maintained), there are two that stood out during my recent travels. They are not new; they are not rocket science but it’s amazing how often they are forgotten or neglected.

The first is clear, honest and timely communication between the family members concerned; including any non – farming family members who may rightly or wrongly have some expectations of some sort of share or financial benefit from the business. People need to firstly express what their wants and needs and aspirations for the future are, then discuss what is possible and alternatives for achieving what is decided.

Sometimes this can be too hard to do on your own; particularly if there has been conflict between family members. Consider brining in an independent facilitator to handle the meeting; they can create a safe environment for discussion to occur and help your family find solutions to issues that everyone can live with. They will often charge for this service but are a darn sight cheaper than going through the courts.

The second factor is good professional advice. Things like business structure and off property investment can make a large difference as to whether a family’s preferred succession plan is achievable or not. Again, good, early advice from your accountant, financial planner, lawyer etc. can help you get the right arrangements in place to suit your situation well in advance of the succession occurring. Don’t leave this too late; the best advice in the world never works as well if it needed to be carried out yesterday; avoid waiting till things are in crisis mode.

AUTHOR:  Paul Erkelenz, Program Leader- Training and Facilitation Services, Rural Solutions SA

CONTACT: Paul Erkelenz, Rural Solutions SA Clare Office, Telephone 8842 6262.