By Dan Cozens, Accounting Manager
Succession planning is a vital process for any agricultural business to ensure the business continues to be successful for the younger generation, whilst allowing the current owners the ability to step back. However, many farmers tend to avoid or delay discussing it as it can be too complex or challenging.
So, when is the best time to think about succession planning in farming? The answer: as soon as possible!
Succession planning is not something that can be done overnight or in a hurry. It requires careful consideration of the needs and goals of all of the individuals involved, along with those of the wider family, and the earlier these conversations begin, the more successful the outcomes are.
Allowing enough time to prepare the successor for the responsibilities and challenges of running the farm provides the opportunity to implement the necessary changes and adjustments to the business structure and operations. Planning ahead also allows for more time to test the feasibility and suitability of any changes, and to make any further changes if required.
Starting early does not mean that everything has to be decided or finalised right away. Succession planning should be an ongoing and dynamic process that should be reviewed and updated regularly, based on the changing circumstances and preferences of the family and the farm. For example, the current owner may change their mind about when or how they want to retire, the successor may now have different needs or goals based on their family situation, or the farm may face new opportunities or challenges in the market.
The key to successful succession planning is to have open and honest communication with your family, and to consult your accountant and solicitors. They can help to facilitate the discussion, provide guidance and information, and offer solutions and alternatives to the potential issues and conflicts that may arise.
By thinking about succession planning early and regularly, you can ensure that your farm business is in good hands for the future, and that your family is well prepared and supported for the transition. This can also reduce the stress and uncertainty that often come with succession and allow the family to focus their time and effort into the running of a successful business.