The high turn out of fifty people for the Positive Succession Planning seminar on February 7th highlighted the importance of succession for rural businesses. The ages ranged from 90 years old to just 6 months! (The latter was well behaved while his mother learnt how to protect his future.)
Iain McVicar, of Albert Goodman, surprised the audience by stating that on average only 10% of businesses make it to the third generation. He then outlined the financial and business considerations to ensure successful succession, which in conclusion were:
- Planning is essential
- Difficult decisions have to be made – do not put them off
- The business issues are more important than the tax issues….
- But do not forget the tax issues!
John Hole, a farmer from Church Knowle, described how his family planned their succession, but that this is work in progress as the next generation start to come into the business and bring new aspirations. What they have done so far is to:
- Protect the tenancies and build good relationships with landlords
- Maintain the direction of the business despite diversification
- Made it attractive to all.
In conclusion, he recommended:
- Remember the advantages of a family business
- Talk to everyone involved, even those family members not in the business
- Talk to friends and advisers.
From the forum discussions that followed, the key learning for participants was:
- Communication is vital and you need to involve everyone
- Don’t forget to consider yourself and your needs
- Set realistic milestones and have a route planner for succession
- To do nothing might be an option – don’t get forced into something too early
- It can be difficult or more complex with larger families, but don’t avoid it – it’s about being fair rather than equal.
- Beware making assumptions or having the wrong perception of what individuals are thinking or want
- It is important to get other people involved – get an outside view
- Trusts can be a simple answer, however let children run their own lives
- It may not be easy but still start talking about it. Facilitators are available to help if necessary
- Remember no one has the absolute right to succession.
Please contact us or www.ruraladvicesw.com for more information or advice.
“I thought that the day was absolutely excellent with good organization and first class speakers who I thought were exactly right for the audience and the buzz in the room all day reflected this.” Roger Smith, Rural Advice Manager