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When the subject of succession planning is mentioned, some people go into their bubble, hoping the discussion will be swift and that no questions will be directed at them. It seems to be a difficult conversation to have, however it is likely to face every business owner in one way or another.
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Think about this. The owner of a lone engineering business in a rural town decides to retire. A decision like this, if not planned, can affect his personal financial future and that of his dependents, the future of his workers, and the services provided to his community. How might he prepare those around him in making this transition? What steps could he take to ensure his business can continue?
Whether the business is a ‘current generation’ or a multi-generational one, determining what to do to safeguard business continuity can be daunting, but it must be done. The trick is not to leave it until retirement age.
There will be more questions than answers for this phase of the business: who wants to buy it, what equity is needed to support the next generation, and where customers will go if the business shuts its door. All these questions require some form of transition and can take years.
Research shows that about 90% of businesses do not have a formal succession plan, or had discussions with their family, accountant or lawyer. It’s never too late to make plans. Don’t assume the kids will come back to run the farm, but be assured they will probably want to have a say in what happens to it.
Whanganui & Partners recognises the need for discussions on succession planning and business continuity and will be holding a workshops for farming families in a couple of months and for other business owners later in the year. The series of four workshops starting 16 May 2020, will be held once every two weeks and will walk farmers through the myriad of family discussions and step-by-step decisions needed to transition through to succession, and keep the business intact.
For more information about the upcoming workshops, visit the Whanganui & Partners website or phone Colleen Sheldon at 06 349 3139 and leave a name and phone number to ensure a return call.