Succession planning is good for business
Published January 14th, 2020
Farm business and farming families have a lot to gain from clearly defined succession plans. For individuals, time is precious so enjoyment, purpose and fulfilment are crucial. Often enthusiasm gained from having a sense of purpose shows in attention to detail, energy and ideas.
“Motivated individuals who go above and beyond set top performing businesses apart from the average, whether it is the motivation to snatch a spraying opportunity at 6am on a Sunday morning or the energy to start a new diversified enterprise,” said Vicky Price, a chartered surveyor at the Hereford office of Berrys.
Comparing farm business performance is an interesting task. Increasingly variable costs are fixed and it is the variation in fixed costs that make the difference between profit and loss. Fixed costs are controlled by management performance which in turn depends on the skills, motivation and enthusiasm of the individual.
“Sadly, we observe that businesses where the previous generation die young or the business has started afresh, have performed well as a result of the freedom to take risk and innovate,” said Vicky.
“This is not to say the older generation is wrong – wisdom and experience are extremely valuable, but the key is using them in conjunction with energy and youth, not against. It is perfectly understandable that different generations will have different viewpoints and attitudes to risk and reward, lifestyle and ambitions – the most successful businesses tend to be those that can recognise this and work together rather than pulling apart.”
Understanding future financial requirements of a retiring generation and being able to make suitable provision is tricky. Often it proves the stumbling block that drives the vicious circle which at best keeps a business stationary and more often pushes it back. Unlocking and reversing the situation requires open and honest conversations, the advice of various professionals and usually a facilitator to help make the discussion happen.
“We are now offering a free consultation at our Hereford office to appraise farm businesses and touch on key areas of performance, strategy and direction,” Vicky said. “For a limited time, we are including in this appraisal an initial discussion with one of our consultants and planners in relation to any RDPE grant project.”
For details contact Berrys Hereford office on 01432 809830 or email Vicky.firstname.lastname@example.org