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What happens next: succession planning

<p><strong>By Perrie Croshaw</strong></p> <p>Undoubtedly one of the toughest issues facing farming families, or in fact any business, is succession planning &ndash; making the transition between generations with the farm business by deciding who in the family inherits what, how and when.</p> <p>Succession planning is an ongoing process and should involve all family members &ndash; both men and women &ndash; who will be affected, according to Rural Law online (<a href=""></a>), a service from the Victorian Law Foundation.</p> <p>Communication is essential. All business succession planning begins with determining what is important to the individuals and how they see their future. The same is true for farm succession planning.</p> <p>In the same way a business plan is a dynamic document, once made it is regularly referred to and readjusted to accommodate market changes, discussions about succession planning shouldn&rsquo;t happen just once. Conversations about taboo subjects such as money and especially death can be very confronting for most people and this is why succession planning is often put off. But these conversations need to take place regularly and all members of the family need to feel included in developing a workable, equitable, succession plan.</p> <p>Considering what the family unit might do, emotionally and financially, if the farm owner unexpectedly dies can make the reality (if it ever occurs) a bit easier to deal with. Each member of the family may have a different view of what the deceased would have wanted, unless that person makes it clear while they are still alive.</p> <p>&ldquo;Asset protection and business succession planning go hand in hand,&rdquo; says Rod Cunich, principal of Access Business Lawyers and a specialist in business succession planning.</p> <p>Not only is it important to protect assets today for future generations, but it&rsquo;s important to have the right business structure in place to enable a smooth and tax effective transfer of assets from one generation to the next.</p> <p>Timing is everything, says Cunich. &ldquo;It&rsquo;s never too early in the life of a business to get the right structures in place. The key to successful planning is to get in early.&rdquo;</p> <p>A no-nonsense publication, A Guide to Succession, by the Grains Research and Development Corporation is available for $10 to help farming businesses through succession. Call 1800 11 00 44, pay by credit card over the phone and they will post it to you.</p> <p><strong>Steps to Succession</strong></p> <p>Essentially you need to gather information about the business&rsquo;s assets and liabilities and what the people involved want to do (sell or inherit); develop recommendations; implement the plan. Start planning now to ensure a smooth transition.</p> <ol> <li>Look at the competency of the next generation to identify a possible successor. Assess their skills and identify any weaknesses. Many family businesses fail when the next generation is given responsibilities beyond their capabilities.</li> <li>Develop a risk management plan that covers who in the organisation will take over senior roles in the event of a disaster (illness, death or disability).</li> <li>Ensure the team can work together, identify any gaps in skills and expertise and arrange training where necessary.</li> <li>Do not assume that the business will work as effectively without a strong leader. Inappropriate leadership can quickly destroy even the most successful business.</li> </ol>

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