Man standing out in the field with arms crossed

Hard vs Soft Skills: Which are more important for transition success

March 19, 2021

Hard vs Soft Skills: Which are more important for transition success

Synopsis
4 Minute Read

To ensure your agriculture business succeeds at succession, it’s important to factor in both the business and the family dynamics.

Family Business Advisor

Building a successful, long-term, transgenerational family enterprise doesn’t happen by accident—although, if you’re part of a multi-generational family business operation, you probably suspected that. To make it into the small club of agriculture businesses that succeed in this arena, you need to have a good handle on the business side of things, as well as the ability to foster a strong family dynamic, so family infighting doesn’t get in the way of your well-laid business plans.

A robust succession advisory team can go a long way in helping your business excel on both fronts—provided you find the right one. Ideally, you want a team that has a good combination of both hard and soft skills, so your advisor can help you implement the right practices and frameworks to achieve long-term operational success, while developing the necessary tactics and processes to manage family dynamics.

A strong financial foundation

If you want to set your business up on the best financial foot possible, you need a hard-skilled team of lawyers, accountants and financial advisors to help you navigate the complexities of your family enterprise and guide you through the decision-making process.

A good team can help you determine the best ownership structure to reduce your overall tax burden—and minimize family disputes. For instance, if your operation is owned jointly by two family members, a hard-skilled advisor might recommend that each owner set up an incorporated business and sign a joint venture agreement, so each family member can remain in control of their own future finances.

Additionally, your advisors may be able to help you identify new income stream opportunities, or help you proactively prepare a succession plan, so you have the proper tax structure in place to minimize the amount of taxes owed upon your exit.

Maximizing the human side of business

In many ways, a soft-skilled advisory team offers a fresh set of eyes through which to view your business. They’re trained to closely examine your everyday business activities and see them in the context of the bigger picture.

This team of professionals can identify when and where miscommunication may be negatively impacting your business’s growth and take steps to eradicate these barriers. For instance, they can help you better define the different roles and responsibilities involved in the day-to-day operations, as well as how those roles could potentially change, or improve, in the future.

They can also help add a sense of formality to the transition process—documenting how the transfer of management, control and labour will ultimately unfold, when the business passes to the next generation. Or they can strengthen existing governance frameworks by defining how processes, structures, communications, timelines, rules and agreements will work moving forward, so family members know what to expect.

Two sides of a coin

Both hard and soft skills are essential when building a multi-generational business operation—you simply can’t have one without the other. The best teams leverage expertise from both ends of the spectrum and work together to create a plan with your business’s goals and unique needs in mind.

At MNP, our experienced team brings both hard and soft skills to the table, which allows us to offer customized services, advice and strategies designed to position your business ahead of the competition.

Bob Tosh, PAg., FEA ,is a farm and family business advisor with MNP’s Consulting group. Through his work with farm families, Bob has become a specialist in family business succession planning, helping more than 200 families transition to the next generation. Contact Bob at 306.664.8303 or [email protected]

Insights

  • Agility

    How to automate your bookkeeping (successfully)

    Is there an easy way to automate your finances? Take it one step at a time, Shayne Dueck, National Leader, ease, says in this latest insight.

  • Performance

    November 25, 2021

    Dealership investments in captive insurers and Form T1134: Filing requirements

    Dealership investments in non-resident insurance and reinsurance corporations are subject to increasingly complex tax reporting requirements. Non-compliance penalties can add up quickly.

  • Confidence

    November 25, 2021

    Detours and Ditches: COP26 and its impact on the ESG movement

    The outcome of the 26th United Nations Climate Change Conference of the Parties (COP26) might have fallen short of expectations, but it provided some much-needed clarity for businesses, policymakers and investors focused on environmental, social and governance issues (ESG).