PKF Carr & Stanton, Hastings, New Zealand
09 Mar 2016
by Campbell Brenton-Rule – Director.
Succession is a real concern for many business owners and it seems to get more so when members of the family are involved.Across both businesses and farms we see the full spectrum of succession, from well-executed transitions that allow the business to move ahead positively, to sad stories where it ends in litigation and torn relationships. From experience most owners know it is a business challenge they’ll face at some point and should plan for, but it is often a trigger event, such as health or business opportunity that drives the change of ownership. In these cases, the outcome may be good, but not necessarily the best outcome that could have been achieved or the best experience for those involved. Succession planning is recognised as a significant issue for farmers and it is also a big consideration for commercial businesses. One key difference between the two sectors is that non agri-businesses tend to have more clearly defined roles which makes it easier to bring someone up through the ranks. For farmers, it can be harder to identify the steps needed to go from working on the farm to running the farm business. Aside from a few areas however, the fundamental and knotty succession issues and the solutions to address these are the same across agri and non-agri-businesses. From the perspective of a business adviser, I am always interested in succession because it’s important to our clients and is an area where we are often asked for ideas and input. In our experience, the ideas that help in succession are the same as those for a healthy and growing business – good advice, good communication, long term planning and patience. In spite of the negative airplay, we believe that there are real benefits from running a successful family business. International research on family business, suggests the family business sector is more successful, resilient and innovative than non-family corporates throughout the developed world. The key steps to achieving succession successMany business owners and farmers tell us that succession is an issue but it’s often put off because it’s too hard, there are more pressing issues to deal with or because no one wants to consider their own mortality. Not only is succession complicated, it’s also personal – there’s no one right solution and no one else can tell you the solution for your business. However, breaking the task down into a number of steps can make it easier to progress.
In reality, all these steps actually occur simultaneously so getting some trusted external advice can assist with this process and provide an independent sounding board for ideas.
There’s real benefit in focusing on the opportunity to do succession well. Where family-owned businesses are able to transition ownership successfully across generations, their depth of experience and passion for the business means they are motivated to keep growing and remain active in the communities they’re part of. If these are challenges facing your business or keeping you awake at nights, we invite you to make a time for a complimentary review with one of our business advisers to discuss the options and plan a strategy going forward.
For more information on how our services can help your business get in touch.