FarmOnline welcomes new blogger Sam Trethewey - a third generation farmer from Tasmania, now based in Victoria. Sam's message is 'think clearly, get muddy': inviting everyone to be clearer in and on farming by rolling up their sleeves, learning and taking action.
TIME to rummage in that “too hard” basket and pull out the dusty file on succession planning - but refrain from swiping it off your desk and under the carpet, I’ve got some points that will get you thinking clearly on this muddy topic.
It’s a huge topic with many issues and challenges, but as I scratch the surface you’ll learn there are thousands of businesses in the same predicament. So let's start at the start, understanding that succession planning is a process, not an event.
I contacted Family Business Australia (FBA), a not-for-profit organisation that gives support, direction and training for family businesses. It’s not a bad industry to be in given 70 per cent of all businesses in Australia are family businesses, employing over 50pc of our workforce. And with 81pc of owners intending to retire in 10 years, there’ll be a wealth transfer of $3.5 trillion.
FBA’s CEO Philippa Taylor says 67pc of all family owned businesses will face succession planning this decade, yet as little as 27pc have a documented plan.
This is scary stuff, but to settle your twitches: Philippa will also tell you 95pc of all families they’ve worked with have all said ‘oh, we thought we were the only ones’. So take comfort in the fact your farm or business is in the majority, you’ve access to comprehensive support and you can leave that legacy – your farm, your business, your family - intact.
Start with structure. Look at John Deere, Brown Brothers and Linfox, all solid structures with solid rules, built by families that do it well.
For instance Linfox has, under no circumstances, anyone on the board without Lindsay Fox’s blood, no son-in-laws, and no accountants. Unfair? Who cares? They’re the rules.
If you’re a part of the family at Brown Brothers and want to make wine or contribute to the business, you’re not allowed to until you’ve worked in a role outside the business for at least four years, often even requiring a promotion in that time.
These are tough rules, that are non-negotiable, but they work - I’ve seen the trucks, enjoyed the wine and spent countless hours roaring along in a Johnny.
There are two separate types of succession planning - the business and inheritance, and services like those of the FBA can only do so much. Ultimately it’s your process that’s crucial.
There is however one issue many farmers notoriously face, especially this retiring generation, and it’s called communication.
At what time in their lives did they decide that a grunt is the acceptable response for yes, no, maybe or “go to the sheepyards and grab the box of drench under the table, closest to the gate”?
If you care for your family, your farm, your future and theirs: talk. The best place to do this however is on a family board or council.
It might sound a bit wanky for a 5000 acre mixed farm, for example. But trust me, your grandchildren will thank you for leaving your grunting to the more privy parts of your life and applaud you as their mums and dads still speak to their brothers and sisters and the business that you dedicated your life to will move forward with a strong structure that’s fair and suits all involved. It starts with you making the tough decisions and having the conversations though.
Studies show the next generation's top two priorities are business strategy and governance structures. So start a council, have a meeting every six months where members open up about their goals, ambitions, plans and futures.
Make it relevant and professional, maybe invite a consultant who has seen it been done over and over again. The FBA recommend you use a third party to moderate and be an objective, non-emotional sounding board. Perhaps a friend, colleague or consultant.
Whatever your preference, history will shine a light on businesses that have strong structures and plan for the future.
Sam Trethewey is a third generation farmer from Tasmania, now based in Victoria. Sam's message is 'think clearly, get muddy': inviting everyone to be clearer in and on farming by rolling up their sleeves, learning and taking action.
Sam is also off to NZ with seven other lads (two Aussies, five Kiwis) to vie for the title of Rural Bachelor of the Year at Fieldays. ‘Like’ Sam on Facebook or follow him on Twitter to show your support:
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