the ten commandments of succession planning (final 2)
TRANSCRIPT
SUCCESS IN SUCCESSION Practical considerations for a positive
outcome
FARM SUCCESSION “Ten Easy Steps to Success”
FARM SUCCESSION “Ten Easy Steps to Success”
OVERVIEW
• MY STORY– OUR FARM– OUR FARM BUSINESS
• WHAT WE LEARNED– SOME FUNDAMENTALS– GETTING STARTED– ADVISERS– “TEN COMMANDMENTS”
JUST ANOTHER FAMILY FARM• ‘Bukalong’, Monaro region of
SE NSW • First settled in 1846 by
George Garnock• Homestead built in 1868• Six generations• Longest private rainfall
records in Australia– And some of the biggest
droughts, floods and snowfalls
JUST THE USUAL FARM DYNAMICS
• Complex ownership and management structure
• Extended family involved in local district
• Limited off-farm investment
• Low input history• ‘Active’ and ‘passive’
contributors
FARM DYNAMICS
FAMILY DYNAMICS
A SUCCESSION PLANNER’S DELIGHT!
SOME FUNDAMENTALS• Succession is a process
– A means to an end…not an end to a means
• There is no ‘formula’– No proforma– No recipe for success
• Requires commitment– Of time and money– From direct stakeholders and advisers /
facilitators • The pathway that you end up on will
(almost certainly):– Change (and/or)– Differ from your expectations
SUCCESSION IS MULTI-FACETED
• OWNERS• MANAGERS• EXPECTATIONS• ASPIRATIONS
• PAST DEBTS / LOANS• BEQUESTS AND PLEDGES• INFORMAL OR FORMAL
• ON-FARM• OFF-FARM• IMMEDIATE• FUTURE
• FARM AND OFF-FARM• AGED CARE /
ACCOMODATION• DIVIDENDS & RETURNS
FUTURE NEEDS
ASSETS & LIABILTIES
PEOPLECOMMITT-MENTS
SUCCESSION IS MULTI-FACETED
SO…WHERE TO NEXT?
GETTING STARTED
1. Make a start!
GETTING STARTED
1. Make a start!2. Gather information– Assets and liabilities– Future needs (aged
care, etc)– Loans and pledges– Plans, maps, etc– Valuations, Wills, etc
“In God we trust. Everyone else…bring
data”
W. Edwards Deming
GETTING STARTED
1. Make a start!2. Gather information3. Encourage family
participation– Concerns and fears?– Objectives and
aspirations?– Expectations?
GETTING STARTED
1. Make a start!2. Gather information3. Encourage family
participation4. Communicate the
process
GETTING STARTED
1. Make a start!2. Gather information3. Encourage family
participation4. Communicate the
process5. Seek professional
advice…but do your homework
A NOTE ON PROFESSIONAL ADVICE…
A NOTE ON PROFESSIONAL ADVICE…
PROS / OPPORTUNITIES• Independence /
impartiality• Competence • A proven process /
experience• Networks (to other
advice, advisers, etc)
CONS / THREATS
• Cost• Baggage / history• Personality /
incompatibility • Inaccessibility
A NOTE ON PROFESSIONAL ADVICE…
• Don’t leave it too late– Clean-ups take time and money
• You generally get what you pay for– “Pay peanuts - get monkeys”
• Word of mouth is often a good start• Check for “baggage”– Genuine independence is essential
• Seek someone who can commit to the process and to getting a result
THE TEN COMMANDMENTS…
TART NOWNDERSTAND & RESPECT EACH OTHERS’ FEELINGSOMMIT TO THE PROCESSOMMIT TO WHAT IS AGREEDQUITABLE IS NOT ALWAYS FAIR (AND VICE VERSA)EEK & VERIFY SOUND, PROFESSIONAL ADVICEET AND ADHERE TO “THE GROUND RULES”N-LAWS CAN BE OUTLAWSBSERVE AND FOCUS ON THE OUTCOMEEVER LOSE PERSPECTIVE
SUCCESSI
ON
THE TEN COMMANDMENTS…
TART NOWNDERSTAND & RESPECT EACH OTHERS’ FEELINGSOMMIT TO THE PROCESSOMMIT TO WHAT IS AGREEDQUITABLE IS NOT ALWAYS FAIR (AND VICE VERSA)EEK & VERIFY SOUND, PROFESSIONAL ADVICEET AND ADHERE TO “THE GROUND RULES”N-LAWS CAN BE OUTLAWSBSERVE AND FOCUS ON THE OUTCOMEEVER LOSE PERSPECTIVE
SUCCESSI
ON
Likelihood of success
1 No. ofpeople
involved
α
THE TEN COMMANDMENTS…
TART NOWNDERSTAND & RESPECT EACH OTHERS’ FEELINGSOMMIT TO THE PROCESSOMMIT TO WHAT IS AGREEDQUITABLE IS NOT ALWAYS FAIR (AND VICE VERSA)EEK & VERIFY SOUND, PROFESSIONAL ADVICEET AND ADHERE TO “THE GROUND RULES”N-LAWS CAN BE OUTLAWSBSERVE AND FOCUS ON THE OUTCOMEEVER LOSE PERSPECTIVE
SUCCESSI
ON
END