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Farm succession planning: 'It is better to face difficult issues and manage them'

Pre-mortem is a term which is used in business circles.

It involves imagining at the start of a project that it has failed, allowing those involved to visualise why, so revealing the potential pitfalls and allowing them to be avoided.

 

It is a way of anticipating issues before they cause problems and, let us be honest, when it comes to succession planning it is not hard to imagine failure.

 

When will Dad hand over the chequebook? When will Mum and Dad retire and what money will they need from the business?

 

Who gets to make the decisions? What happens to siblings who do not work in the business? These are just four of the issues which can put families at loggerheads.

 

Given more than 60 per cent of farm businesses do not have a succession plan, we know the industry’s current approach to this fraught topic is not working. A new approach is required.

 

So instead of telling people to have family meetings to agree on all the things they can agree about, we should start the process with a family meeting to agree on all the things people are going to fall out over.

 

Difficult

 

That may sound counterintuitive, but talking about such issues can actually take the fear out of these difficult conversations. No more of the ‘elephant-in-the-room’ topics which no-one dares mention.


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Instead, an upfront acknowledgement the conversations will be uncomfortable and some people may be disappointed, but everybody will know why the discussion needs to be had and that compromises have to be reached.

 

When you have talked about the areas you are going to fall out over, it should then be an easier conversation to find the subjects you agree on.

 

There are probably quite a few of these. In an uncertain world, we know some things. Mum and Dad will die at some point. You want them to enjoy their retirement.

 

We all want to pay as little tax as possible. Basically, we want our family to be happy. We would like to keep the farm as a farm, or perhaps we do not, maybe it has simply been assumed that certain people really want to farm?

 

When it comes to succession planning, it is understandable why people can be tempted to avoid the issue – they are scared of upsetting their loved ones through the decisions they make. But a lack of action ultimately upsets everyone.

 

It is far better to face the issue head on and, like so many issues in agriculture, try to break complex issues into more manageable chunks.

 

Agreeing what you are going to disagree about may seem an unconventional approach, but at least you are agreeing on something, and it will begin this vital process.

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