Building a successful farm takes many years of hard work and dedication. That’s well understood.
But what it takes to continue that success into the next generation is often forgotten, or put off until it’s too late.
What comes next? What will happen to my business when I am no longer able to run it?
These are important questions to answer, as leaving the farm succession process up to the remaining family members once you’ve passed away is not going to guarantee any sort of success.
In this Mind Your Farm Business episode, RealAgriculture’s Shaun Haney talks to Jolene Brown about planning family farm succession — something that shouldn’t be left as a family relationship gambling game based on hopes and wishes.
Brown travels across North America helping family farms with succession planning, and one of her most renowned sayings is “you have to honour the family, by doing the business right.”
That means coming up with plans “when the times are good.”
If you don’t plan when you can, “you are going to have people disagreeing, agreeing, assuming, hoping, wishing, and then at the funeral home they get to find out whats really going to happen at the reading of the will,” notes Brown. “So what I know is, if you want to honour the family, you’ve got to do this business right. And this means you’ve got to do work ahead of time.”
Shaun points out the first step to planning is just sitting down and actually having the conversation, but that’s not always an easy conversation to have.
Brown agrees, adding if she was doing the planning, she would want to talk to each member of the family separately, to find out “what they are hoping and what they are wishing.”
“I start talking to mom and dad first, because they are the asset owners. They are the ones making the decisions. And when I have the children around, I say ‘the number one goal is to respect the wishes of the asset owners,'” explains Brown. “‘You may not like it, or you may really like it, but the bottom line is, they get to choose. But here’s the thing: you are going to know the rules of the game before I leave here today. And then you can make your decision on whether you want to play the game or not, or if you want to make a different option for the game, but at least you know where things stand for today.'”
Brown adds that it doesn’t make any difference on the size of your operation, planning still needs to happen.
“It has nothing to do with how financially strong you are, the colour of your equipment, how many critters you have or how many acres. It has everything to do with whether or not you want a legacy to continue, when you are going to transition, and to whom. Once we get those three questions answered, how we do it becomes quite easy.”
Check out this new MYFB episode on the importance of working through family farm succession before the family is on the way to the funeral home:
Disclaimer: Royal Bank of Canada and its subsidiaries are not responsible for the information provided in this podcast, and this information does not necessarily reflect the views of Royal Bank of Canada or any of its subsidiaries. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its subsidiaries.
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