(NC) Farming in Canada is a family affair and like other family-run operations, transitioning the business from one generation to the next isn’t always smooth. But through proper succession planning, honest dialogue, and using a business-first family approach, you can ensure a successful enterprise for years to come.
“The hard work of farming can pale in comparison to planning a farm’s transition to the next generation,” cautions Gwen Paddock, national director of agriculture at RBC. “But it can be a positive experience and being grateful for what you have in order to be worthy of what you want is the real key when it comes to family business.”
The conversation can be awkward and difficult, but these four tips will help everything go smoother and ensure your business thrives for years to come:
1. Operate as a business-first family, not family-first business. Make sure the right leader with their “skin in the game” is in place to take action and make decisions that are best for the business, not out of sympathy or based on automatic heirs.
2. Discuss goals openly and honestly. Agree up front on realistic goals that best serve the business. Draw up legal documents — don’t rely solely on wills — and ensure that the senior generation is financially secure outside the business.
3. Ask the right questions. These include: Do you really want this business to continue? Why are you (senior and younger generation) doing this? When is this going to transition?
4. Consider an outside perspective. In certain instances the advice from a neutral party like a succession coach can help implement a conflict management plan.
Contact a RBC agriculture banking specialist to discuss your succession planning needs.