Background

Farm Business Succession Planning

COURSE CONTENT

Introduction to Succession Planning

Principal | Family Business Specialist

Marina Skinner – EMBA SAFBA is a family business consultant dedicated to servicing the needs and raising the profile of Australian family businesses. She sees her role as guiding families in business.

Expertise Summary

Marina has more than 20 years experience in family business. She is a fully qualified specialised family business advisor, consultant, facilitator and trainer. She has worked across multiple industry sectors with family business clients within Australia and Internationally. Marina has a thorough knowledge of factors that are unique to family businesses and appreciates how these factors can influence business performance and interpersonal relationships.

In addition to her training, Marina’s special insight comes from previously working in and managing family businesses for more than 12 years. Experience within the private sector ranges from manufacturing, electrical, retail and motor dealers through to the building industry adding to Marina’s broad knowledge and skill sets.

Getting Started

Where to Start

Address the Family Aspects of Your Goals

Share the Vision

Ensure that the family is on the same page while considering family values. Having a shared vision for the direction of the family business is critical during the succession planning process.

Build a Strong Foundation

Put in place strong foundations based on those family values. Identify the values gained from generations before you and the ones that are important that you want to pass on to future generations.

Develop a Family Charter

Having a family charter in place is essential for guiding future generations. A well planned family charter provides a road map as well as a set of guidelines for the future of the family business.

Establish a Forum

Set in stone a time and place to talk about the direction of the family business as well as to discuss the families business values. This ensures that the family remains up to date on the direction of the business as well as the values that it holds for the future.

Create an Action Plan

Put in place an action plan for the business and ensure that its kept up to date with the future direction of the family business. Ones completed make sure its implemented based on business values.

What the Research Shows

Family Business Research

Lets take a closer look at the research and the alarming trends when it comes to succession planning. Why is the failure rate for succession planning so high and what are the key challenges during the succession planning process.

John Wards Succession Research

Research conducted by John Ward identified that the rate of successful succession rapidly declined after the second generation.

  • 30% survive to the 2nd generation
  • 13% survive to the 3rd generation.
  • 3% survive to the 4th generation and beyond.

The Importance of Family Values

It is essential to spend the time to discuss family values and the direction of the business. This ensures that family members are equipped with the right skills to manage the business in the future.

Top Tips

Succession Planning – Top Tips

  • Stocktake – Past, Present & future
  • Clarify the Vision
  • Unify the Family – Identify the Values
  • Start the Discussion – Communication and Guidelines such as a Family Charter
  • Develop a Strategic Family Plan
  • Build Your Team – Advisor Collaboration
  • Continue to Practice Scenario Planning

Managing Risks

Managing The Risks

Start

Make sure that you start the planning process early. This will ensure that you build strong foundations for a successful plan.

Engage

Make sure that you engage and communicate with family members and key stakeholders that are pivotal to the planning process. This may include accountants or a succession planning professional.

Access

Access the help from these key stakeholders to strengthen your plan for moving forward. This may cover a diverse range of services such as business planning and succession support services.

Develop

Now its time to put pen to paper and begin to develop a written succession plan for your business.

Implement

Make sure that you begin to implement the succession plan within the business in collaboration with key business stakeholders.

Establish

Once implemented it is important that you identify potential training opportunities for the next generation. This ensures that the business manager will be equipped with the right skills to manage the business in the future.

Re-evaluate

Start to review, measure and adjust the plan to ensure that it remains relevant to the business. Too often the plan is set aside and forgotten about.

Plan

Don’t forgot to consider yourself and your future role that you can still plan in the business. This may be an active role or even perhaps a mentoring one to ensure that any skill gaps and filled in the future.

Utilise

Utilise future and scenario planning as ways to plan for the future as well as a learning opportunity for the next generation. An example may be fluctuations in the market price and how the business could potentially adapt to these changes.

Planning Process

Succession Planning Stocktake

When embarking on your succession planning journey its important that you learn from the past especially if you are running a multigenerational business. By doing a stocktake of the past and the present you can build strong foundations for the future.

Where do I Want to Be?

It is important to start planning on where you would like to be in 1,5,10 and 25 years. From here you can start to piece together the steps that you need to take to achieve your goals.

Creating The Plan

Looking into the past helps you identify things that worked and didnt work. This may include lessons learned that will help the business remain more resilient in the future.

Where are you now?

Identifying where you are now within the business will help you transition into where you would like to be within the business in the future. Do you have freedom outside of the business and have you identified the next successors?

The Next Successor

It is important to clearly clarify who the next successor is within the farm business and are they ready to take over if something happens? Are the next successors supported within the business and do they have a solid support network moving forward? Having answers to these questions will play a pivotal role in a successful succession plan.

Risk Matrix

Developing a simple risk matrix can help you identify and potential threat to your business as well as the likelyhood of those threats. This process helps new managers plan for the future while gaining a new level of understanding about the business.

Disaster Contacts

Who to Talk to?

Building Your Team

Knowing who to reach out to during the succession planning process is a skill in itself. It really does take a team of the right stakeholders and professionals to develop a successful succession plan. Succession is never a one size fits all solution. Below is a list of people that may play a pivotal role in your succession planning team.

Succession Planning Team Members

  • Accountants
  • Accredited Family Business Adviser
  • Banker
  • Family Business Australia (FBA)
  • Financial Adviser
  • Government Departments – Local, State, Federal
  • Industry Bodies such as Growcom & QFF
  • Lawyer
  • Rural Financial Councillor
  • Specialist Accredited Family Business Adviser (Family Dynamics)

RESOURCES

Climate Risk Assessment Template: Explore a framework designed for coastal climates.

Have access to the latest Forecasts & Seasonal Outlooks.

Climate Comparison Tool: Compare and contrast climates across a variety of different areas.

Bowen Climate Risk Assessment: Discover the level of climate risk for the Bowen area.

Emergency Management Plan: How to establish an emergency management plan.

Natural Disaster Information Sheets: Incredibly handy factsheets on natural disasters.