RHASS Blog: Sian Bushell on Succession Planning
Succession Planning is a key issue facing farmers – we asked Sian Bushell to give her advice on this often difficult subject.
Managing a farming, or rural, businesses can be challenging however, there are some factors that can be successfully controlled to minimise future uncertainly. RHASS talks to Sian Bushell, an experienced facilitator, to hear her views and thoughts on the often-difficult subject of succession.
“None of us get out alive and succession will happen,” says Sian, “And for the best outcome, its necessary to look at the issues, discuss and plan accordingly.
“There are serious repercussions to decisions you make now and in the future and I want to stress the importance of communication; the biggest problem in the equation. I appreciate these are often not easy or comfortable conversations, but for the future of your business, they are essential.
“I want to encourage you, and that relates to everyone involved, to be persistent; especially if a family member is hesitant or refuses to join the conversation. I believe the older generation should be the ones to start the discussion, but failing that the younger members need to suggest that the subject is addressed.
“I also recommend a neutral venue. And if necessary, involve a 3rd party; one that can ask the awkward questions but is respected by all parties.
“Utilise other sources of information. You can gain some great ideas and insight into the issues with research. This can result in some very useful and constructive discussions.
“Knowledge helps the conversation. But ultimately, the decisions have to be made by the people who will live with it; the family. It’s really important to acknowledge everyone’s worth in this process – if people feel undervalued or not recognised, it can affect their willingness to cooperate.
“If the business cannot afford certain options, then discuss how shortfalls can be made. This is extremely important as it can reduce potential frustration and is good for self-esteem of the individual.
“Try and understand everyone’s point of view and what they want from the situation, and talk often around the kitchen table to make it less of a taboo subject.
“Despite the complexities, I believe it is possible to have a plan that all agree on, but start early and involve everyone. And revisit as circumstances change. Its vital the plan is relevant for it to be implemented successfully.
SIAN’S TOP TIPS
• Plan for succession as soon as your children are born. This means that there is time to ensure that all children are treated fairly without endangering the core business.
• It is good business governance to review succession at least once every year to ensure everything is on track and consider any changes that may have happened.
• Talk about succession with the family frequently and openly so that it does not become a taboo subject. Include all family members who are linked to the business including in-laws.
• Have a proper plan for retirement. What does it mean to you? Put a date on when you will be stepping back from the responsibility of running the business. Where will you live? Have you enough pension? If not, where will the extra come from? If it is from the family business, calculate exactly how much will be needed each year so it can be part of the business budget.
• Everyone should have a will – NO EXCUSES. The contents of the will should be discussed with the beneficiaries.
• If a young family member is coming back to the business, have a proper plan of integration. This will include where they will live, what hours they will work, payment, responsibilities and how to include them in the decision making.
• Consider Power of Attorney for those in the business.
• Have proper, regular, business meetings to ensure effective communication between everyone working within the business
• When considering succession, the assets and the business should be thought of separately.
• Use good professions at every step. Always check with a tax expert before taking any course of action. Always have a proper partnership agreement. Having a clear idea of what you want to achieve means the professional can work to what you want far easier. However, succession is not just about tax. Any plan has to work for the family.