Transitioning a farming business from one generation to another should be a seamless process if the matter is dealt with from the day a new person enters the business.
I still believe succession is one of the most neglected and difficult decisions on a vast number of farms across the country.
It all stems from a lack of understanding on how to go about it.
Succession can be further compounded by the fact "the pie" - meaning the business - may not be big nor profitable enough.
Very few farmers have been able to survive by farming the same-sized farm as the generation before them.
While productivity gains have been made, cost of production increases have followed suit.
Many progressive farms have doubled in size in the past 25 years yet the number of people working on them has remained the same.
On cropping farms, labour efficiency has improved mainly through improved technology so what was spent on labour is now spent on machinery.
The margins may have increased a little but it has been the multiplying of the margins that has been of greatest benefit.
Given our recent history, it would appear growing the business should be a high priority.
While diversification should always be on the drawing board, expanding the broad hectare farming has been more attractive.
Using existing skills, knowledge and machinery makes expansion much easier.
The critical components of transitioning to the next generation are the management, control and ownership of the assets.
Transferring the management responsibility should start on day one of a son or daughter returning to the family farm. A failure to do this usually leads to problems further down the track.
The older generation need to provide leadership and a good starting point is for them to have five simple plans.
Business, Personal, Succession, Retirement and Estate plans are a necessity. All of these plans are interconnected. Listing your goals, needs and concerns in each is a good starting point.
Prioritising and funding becomes the next consideration.
Having done this there will be some sacrifices required and re-prioritisation to be undertaken while some knowledge and skill gaps will become evident.
Upskilling in these areas could save the business and some relationships.
It is hugely disappointing to me when I learn of a family who will no longer speak to nor have anything to do with each other.
When you trace back to the start of any dispute, it is quite off something small that has been handled poorly.
Understanding how partnerships, companies, trusts and taxation works can be simple when compared with the people side of the situation.
Improving your communication, problem solving, negotiation and leadership skills is a must. If you are good at the latter, the former becomes much easier.
One thing we can be sure of in future years is that change will continue to challenge us.
Having the skills and preparedness to change will be key to profiting from it in both from a business and personal point of view.
Standing still in these areas is in fact going backwards. Trying to fix new problems with old tools will not "cut it" in the future.
Your ability to profit from change in the future will depend on how well prepared you are and your attitude towards it.
A fixed gun position does not shoot many ducks, if you get my drift.
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