Farm Succession – Do’s and Don’ts

Ontario Ministry of Agriculture, Food and Rural Affairs - Nick Betts - Business Management Specialist

Type: Webpage
Knowledge level: Intermediate

Farm Table says:

Handy list to keep beside you to get you on track and focused during the long succession process.

This article from the Ontario Ministry of Agriculture, Food and Rural Affairs outlines a list of Do’s and Don’t’s of Succession Planning.

They include:

Do’s:

  • Do think of succession planning as a process rather than an event
  • Do start planning now.
  • Do keep the big picture — the long-term direction of the farm business — in mind.
  • Do complete a financial analysis of the past and present farm business along with some financial projections not making money now, what can be done to make it profitable?
  • Do become educated on the subject.
  • Do consider using a “family business meeting” as a way to open the lines of communication among family members.
  • Do determine the most important things (values and their priorities) to each individual family member as a starting point.
  • Do figure out each individual’s personal, family and business goals, which should be based on their values and priorities.
  • Do ensure good communication among family members about plans, strategies, and issues.
  • Do address the issue of fair (equitable) vs. equal division of the farm early in the process — especially if there are off-farm family members involved.
  • Do prepare a legal will early.
  • Do develop a “successor development plan” for any family member(s) who is (are) planning to take over the business.
  • Do generate and discuss various options — be creative.
  • Do assemble a “team” of professional advisors.
  • Do take responsibility for development and implementation of the plan with help from the advisors.
  • Do consider the tax implications, but don’t focus solely on them as the most important thing.
  • Do write it down.

Don’t’s:

  • Don’t procrastinate.
  • Don’t be afraid to ask questions and listen carefully to the answers, even though you might not like them.
  • Don’t assume you know what others are thinking or how they feel about the process or what they want to achieve from
    the succession plan.
  • Don’t be afraid to share responsibilities
  • Don’t define life as the business.
  • Don’t put all your eggs in one basket.
  • Don’t rely on just one professional advisor.
2015 - Canada - Ontario Ministry of Agriculture, Food and Rural Affairs - Nick Betts - Business Management Specialist
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