the ten commandments of succession planning (final 2)
TRANSCRIPT
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SUCCESS IN SUCCESSION Practical considerations for a positive
outcome
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FARM SUCCESSION “Ten Easy Steps to Success”
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FARM SUCCESSION “Ten Easy Steps to Success”
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OVERVIEW
• MY STORY– OUR FARM– OUR FARM BUSINESS
• WHAT WE LEARNED– SOME FUNDAMENTALS– GETTING STARTED– ADVISERS– “TEN COMMANDMENTS”
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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
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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
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FARM DYNAMICS
FAMILY DYNAMICS
A SUCCESSION PLANNER’S DELIGHT!
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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
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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
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SUCCESSION IS MULTI-FACETED
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SO…WHERE TO NEXT?
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GETTING STARTED
1. Make a start!
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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
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GETTING STARTED
1. Make a start!2. Gather information3. Encourage family
participation– Concerns and fears?– Objectives and
aspirations?– Expectations?
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GETTING STARTED
1. Make a start!2. Gather information3. Encourage family
participation4. Communicate the
process
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GETTING STARTED
1. Make a start!2. Gather information3. Encourage family
participation4. Communicate the
process5. Seek professional
advice…but do your homework
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A NOTE ON PROFESSIONAL ADVICE…
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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
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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
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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
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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
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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
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