Education is the key to succession preparedness

For many families, succession planning seems too treacherous a journey to undertake, so they simply opt not to set off on it. As a result, they forgo a critical opportunity to shape their future for the better.

Imagine that you have to go on a five-year trip with your family to an unknown destination where very little of your previous knowledge and experience will be of any use. Imagine, furthermore, that your family's material wealth, its emotional well-being, and its stature in the community will all depend on successful completion of this trip.

Wouldn't you go out of your way to prepare your family for such a journey? Wouldn't you, at a minimum, want to give them the basic survival skills necessary to complete the passage successfully? Of course, you would. And yet there are many agribusiness families that are alarmingly ill-prepared for succession and continuity planning.

Needless to say, the consequences are often unfortunate. For many families, the journey appears so daunting and so full of potential problems that they won't even consider taking it. And in so doing, they lose a vital chance to structure the company and its finances to their advantage.

In reality, of course, you don't have much choice about whether or not to embark on the journey. The process of generational change in a family business is driven by the biological clock and can't be stopped. Your only choice is whether you prepare for the journey and manage it accordingly, or let the outcome be determined by luck and happenstance.

CONSIDER THE INTANGIBLES

Some families rush into succession planning before they fully understand what is involved or have psychologically prepared themselves for it. They also sometimes get nudged into it by advisers, who may have the best intentions. Advisers are often eager to show their clients that they charge them only for concrete, tangible work, such as the planning process itself. Preparing for dramatic change, however, involves many intangibles.