The taboo surrounding succession planning is seemingly due for revision with an increasing number of farming families beginning to see the benefits of investing in the future.
A presentation by the National Australia Bank and Next Rural specialist Mark Scanlon in Taroom last week outlined the problems associated with placing succession planning in the too hard basket.
Mr Scanlon said he preferred transition planning as a descriptive device to avoid negative connotations linked to the term succession.
“Succession has become a dirty word lately, people think it means they’re selling their property but it’s not about that at all,” Mr Scanlon said.
“Transition planning is what you want it to be. Every family is different and the chance to make decisions based on what suits individual circumstances is best taken while owners are still in a position of control.
“Too many people rely on wills as the last document to call on but they’re often outdated and can be contested, whereas transition plans can manage the changing aspects of your life such as debt, illness and growth within families- they’re not to be feared.”
Mr Scanlon said Australia was seeing a return of the younger generation into farming despite the average age of a male farmer being 57.
“Too often all the time and energy goes into the business and is taken away from the owners and family,” he said.
“A transition plan aims to let mums and dads win out eventually by turning day to day operators into business owners and increasing the roles and responsibilities of the next generation.”
Mr Scanlon encouraged removing emotion from the family business, where set agendas and regular business meetings “put out spot fires rather than bushfires.”
“It takes two to three years for newcomers to learn the books alone so we need to be giving them the skill sets when they start showing interest,” he said.
“They can be involved in bank and accountancy meetings early on- forget whose nose may be put out of joint and focus on what’s best for business success.”
Newly married and with her first child on the way, Emily Blackley, Bridge Creek, Taroom, said her family’s extensive beef breeding and finishing operation warranted a detailed succession plan.
“There are various components of the family business- cropping, breeding, lotfeeding and trucking- so that gives us various dimensions to consider,” Mrs Blackley said.
“Not only that, all three of us kids are home working on the property and that makes it difficult because unlike many families, I’m the sister who stayed.”
Mrs Blackley said her family’s home property, Brig-O-Doon, Taroom, and subsequent properties were the major source of income.
“There’s no off-farm income for us which may present issues for succession, which is why we need to plan now while we’re still young,” she said.
“Succession plans put everyone on the same page and they allow you to adjust to what everyone else is planning and doing- without a plan there’s bound to be a conflict of interest at some point.”
In the opinions of both Mr Scanlon and Mrs Blackley, the age old taboo concerning succession planning continues to exist among some families where future direction is simply not discussed.
Mr Scanlon said many families delayed succession planning due to feeling a need to reduce debt before handing the business over.
“Bank debts are always going to exist but we can get the timing right for a business ownership transition with sufficient planning,” he said.
“Business transition is often referred to as a form of child abuse because we see handovers happening when businesses are at their decline.
“Various conversations need to be had with all parties to get it right- you’ll see a far better outcome than sweeping it under the carpet.”
Linking her own situation to those outlined by Mr Scanlon, Mrs Blackley affectionately said her father would be “one to retire on the property and only leave in a box,” and a succession plan accommodated for that.
“In some families succession planning is hard because people don’t want to let go. It’s not a case of letting go, it’s planning for the future but some people can’t differentiate between the two,” she said.
“I believe the next five years will be the biggest for us. Our family is growing and it will continue to grow so investing the money in a solid plan now may save angst down the track.”
