I’m very pleased that Farming Connect in Wales have published a booklet called ‘Start the Conversation’. I was happy to be part of the contribution process and I hope it will be a very helpful tool for farming families.
I am often asked how to start the conversation on succession. In an ideal world it should be a regular topic of discussion as it is part of business planning. Ideally the older generation should start this conversation. It is for them to have planned when they wish to step back and transfer responsibilities and assets. Unfortunately this is not always the case and as time goes on that generation may become averse to change and may be resistant to discussion. It is not acceptable to brush off the younger generation with ‘don’t worry it’s all sorted’. If you expect the next generation to commit their future to the business there needs to be a clear plan that everyone knows about.
A few hints on how to start that conversation.
- Set aside a day to start your plan. Get everyone who is involved in the business to attend. It may need to be at a neutral venue so that everyone is on the same footing and you are not likely to be disturbed.
- Set time lines for what you all want to be doing in 5;10;15;20 years time.
- Clarify responsibilities.
- Separate the transfer of responsibility from the transfer of assets as they do not have to happen at the same time.
- The transfer of responsibility timetable can vary according to the ages and experience of the people involved however there should be a date set when the overall responsibility for the business passes from one generation to the next.
- Agree on your plan and then get it checked by an accountant and solicitor. Not the other way around. You need your plan to suit your needs and not have to alter your needs to suit a plan imposed on you.
- If you find it difficult to talk, use an experienced facilitator to ensure you discuss all the issues – even the awkward ones!
A succession plan is not something you set up in a day and then forget about. It is a living document and circumstances can change. Therefore setting aside time every year to discuss your plan is essential. What has changed? Does the plan have to change?
Stepping back from having overall responsibility for the business can be painful for some and this has to be handled with respect. However this has to happen in a timely manner if we want the industry to meet the challenges of tomorrow. Each generation has to have their fair turn at running the business. The danger is that if too many refuse to step back in a timely manner, compulsory retirement may be imposed on the industry and that could have difficult and unintended consequences.
I felt very privileged last week to attend a meeting at Highgrove. It was heartening to realise that there is so much concern about the welfare of farming families, especially with the challenges the industry may have to face in the near future. HRH was very well informed and had a genuine concern for farming families. We are very fortunate to have such a high profile advocate for British Farming, especially as many politicians are, at best, uninterested in our industry.