Young family in a rural setting

This Family Day, why not begin a family transition plan?

February 16, 2022

This Family Day, why not begin a family transition plan?

Synopsis
5 Minute Read

This Family Day may be the perfect opportunity to start talking about succession planning.

Family Business Advisor

When you’re busy with the day-to-day tasks of running a farm, it can be difficult to find time to step away and think about the future. And in some ways, maybe you don’t want to.

In every business, the act of transition planning can be incredibly daunting—after all, where do you even start? But when it comes to the family farm—an entity that has played an all-consuming role in your life and family for decades, if not generations—it can be difficult to imagine a life separate from farming.

Fortunately, as the name implies, transition planning should be a gradual process—an opportunity to closely examine your business, break down its key elements and consider ways to help it thrive well into the future.

Each step in the process should, ideally, help you envision your life beyond the farm and allow your entire family to grow accustomed to the idea before it happens.

Here are just a few ways a transition plan can make the process significantly easier:

It gives you an excuse to closely examine everyday farm activities

Before you can determine where you’re headed, you have to understand where you are. As such, the first step in the transition process can actually help your family farm in the here and now by outlining the different roles and responsibilities involved in the day-to-day operations and identifying how those roles could potentially change, or improve, in the future.

It adds a sense of formality to the process

When you’re ready, a transition plan can also outline how the transfer of management, control and labour will ultimately take place. It adds a sense of formality by clearly defining associated processes, structures, communications and rules and agreements—which, in turn, will minimize family disagreements. It typically also allows you to create a clear timeline, so everyone knows what will happen ahead of time, eradicating the possibility of any surprises.

It allows you to control what future governance will look like

A transition plan can also help you think about how future decisions will be made. For instance, will parents have the final say or will you have a more egalitarian system that includes siblings? Will spouses have a vote? By introducing governance models early, before a transition has formally taken place, you can dramatically reduce family infighting and make the transition process much easier.

Start the journey

Taking that first step toward transition planning is by far the most difficult. That’s why it can be helpful to have an experienced advisor by your side. At MNP, we’ve helped countless family farms successfully launch and complete the transition process. To learn more about how we can help you, contact Bob Tosh, PAg. FEA, Family Business Advisor, at 306-664-8303 or [email protected]

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