In working with family agribusinesses that are in the process of transitioning from one generation to the next, I'm always pleased to come across current owners who have established financial security for themselves outside the business.
Letting go is a difficult task at the best of times; the process is made far more stressful if the retiring leader is financially dependent on the business. Unfortunately, when planning ownership transition and succession, many family businesses focus only on minimising transfer duties. What is frequently forgotten or poorly planned is the financial security of the senior generation after the transition.
The transition process should begin with the owner establishing a clear vision of his or her future after the business is transitioned and discussing this with the next generation. Everyone should then decide whether the next generation is willing to take on the responsibility of ownership and/ or management of the company and if they are capable of doing so.
The transition process frequently involves programmes to educate and prepare the next generation for their future responsibilities; this will also have to be factored in.
If the next generation is not willing or able to assume future ownership of the business, the senior owner must decide whether to sell to a third party or remain active in the company.
PLANNING
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