WHEN it comes to navigating sensitive and complex issues such as succession planning, it pays to have trusted advisors in your corner that truly understand agricultural business.
William Buck’s expert team not only has decades of experience under their belt, but also deep personal roots in the farming sector. The firm’s agricultural foundations date back to 1946 with long-standing relationships forged with primary producers and regional businesses.
Several regionally focused finance and business advisory firms have joined the William Buck group over the years while the firm has continued to diversify across sectors and industries. It is now one of the strongest agri advisory firms in South Australia and one of the largest accounting and advisory firms in the state.
The firm’s unrivalled track record and personal understanding of the unique challenges facing rural and agricultural business makes William Buck the advisors of choice for family and corporate businesses across regional SA.
William Buck has helped many agri clients with their business and personal wealth requirements including assisting hundreds to successfully navigate the succession planning process.
For William Buck head of agribusiness Ben Trengove, who was born into a fifth-generation broadacre farming family at Bute, it’s the team’s personal, direct and honest approach that sets the firm apart.
“Our team makes it our business to understand the unique challenges, risks and opportunities facing each client,” Mr Trengove said.
“While the industries may differ, it’s often the same issues that continue to keep people up at night and succession planning is constantly high on that list. Handled well, it can take the business to the next level and create very favourable financial outcomes for the family.”
Navigating the future with the next generation
Managing the transition of the business to the next generation is a common cause of stress among farmers. This can become more problematic as sons and daughters pursue careers away from the farm or move interstate.
According to William Buck, most farmers acknowledge succession planning is important but view it as not urgent. It gets bumped down the to-do list as day-to-day operations take priority.
One of the main hurdles is a general misunderstanding among family business owners of when or how to start the succession planning process.
William Buck’s agri team works closely with clients to establish a clear plan as early as possible enabling more effective long-term decision making for the farming enterprise and lessening the risk of disputes or disappointment down the track.
Five tips for successful succession
1. Plan, and plan early. Ask yourself – When do you want to retire? How would you like to retire? Would you like to pass the business on to the next generation or are you considering putting it up for sale? Who within the family is most suited to running the business when you retire? Have a clear understanding of your objectives.
2. Understand and embrace family dynamics. Family dynamics are by far the most influential factor in the daily management of family owned businesses. There are differences in attitudes towards each other and towards the businesses itself and usually differences in opinion about how the business should operate. It's often these dynamics that inexperienced business advisors either fail to identify or neglect to the client’s detriment and that of the future of the business. It’s vital that families have a clear decision-making hierarchy, well understood roles and responsibilities and there is clear and regular communication.
3. Maintain fairness and equity. Tension can arise when the next generation feels that distribution of assets or responsibility has not been addressed fairly. One sibling may feel as though they work harder than the rest, or that a sibling with an affinity to the land might be ‘better off’ due to the higher value of farming assets over non-farm assets. Careful consideration is required to ensure the allocation of assets is fair and equitable, particularly when non-farm siblings are involved.
4. Ensure your plan makes financial sense. The desire might be to hand over the reins to the next generation, but the business might only be able to support one family and if multiple siblings are involved, this has the potential to put stress on family relationships. It’s also important to consider the structure of the business and the financial implications such as who will own each asset and the impact of capital gains tax or transfer costs if assets were passed on.
5. Objective independent advice. Seeking independent advice regarding future plans and operating structure is always a sensible idea. Not only will an experienced independent adviser provide guidance from a financial perspective, but regular meetings facilitated by a third party can provide an objective viewpoint. Getting all family members involved in the planning process creates a feeling of inclusion, responsibility and ownership, but can require outside assistance to ensure objectivity and control emotion.
- Contact agribusiness specialist Ben Trengove on 0419 851 008 or email Ben.Trengove@williambuck.com