No two transition plans are the same. That is obvious to anyone who has read about the subject or has partially or completely navigated through the process.
However, there are commonalities among lots of families and farms that manage through this important stage of the business lifecycle. One of those is that you will likely work with several professionals externally, and there will be work done by several members of the family and/or the management team internally.
This is your transition team, and how this team is selected will have a profound impact on later results.
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The first step to building a great transition team is to be intentional when choosing who to work with externally, and who among the family is designated to lead things internally.
External members of the team will usually include an accountant, lawyer and often a management consultant or adviser. These professionals will be instrumental in helping make important decisions and plans. It’s worth the effort to make sure you work with the best people for your situation.
You likely have an established relationship with a team of professionals and there’s a good chance they can provide excellent service . However, it never hurts to take a step back, reflect and intentionally decide whether to keep that relationship or seek a new one.
Here’s a three-step guide to help you add intentionality to your decision.
First, write down key attributes of what an ideal member of your external team would bring to the table.
Do you need extra help to keep the family on track and making progress toward finalizing the plan?
Do you require someone more affordable?
Are there unique aspects of your farm business or family for which a professional would require specialized experience? Perhaps the familiarity of continuing to work with an already trusted adviser is one of the most important attributes — and that’s OK.
With these attributes in mind, step two is to create a list of options. You can use your network, search online and attend trade shows. It’s not difficult, although it might take some time.
Remember, you have value as a potential client, so don’t hesitate to request all the information you need to make a decision.
The last step is to weigh your options and make a decision. There is a good chance the current team is up to the task and no major changes are made. Remember that the effort you went through to arrive at that conclusion is not wasted.
If you do make changes, it’s to the benefit of your farm and family. The team you have assembled has a greater chance of meeting your specific needs.
Does the same process apply to the intentionality of choosing your internal team? In a nutshell, yes, albeit with important differences. However, following the same basic process of identifying key attributes, identifying options and then going forward with a decision will have benefits in the long run.
Your internal team will be even more unique to your situation.
Do you farm with extended family?
Are partners and in-laws involved in management?
What about non-family employees?
This article can’t get into those topics, as important as they are. But it is important to note that, though there are many differences from farm to farm and family to family, one common trait of families who successfully complete the transition planning process is that there is one person designated to champion the project.
Keep in mind that success is defined differently by different people. Success in this context is that the farm family develops a plan that gives them the best chance to achieve the intended outcomes they identified.
With that in mind, how do you choose that internal champion who will oversee the project? Your options will be more limited compared to choosing your external advisers. That much is obvious. Determining who will lead the project may be the most important decision you’ll make.
Why? Because if you’re not careful, you might overlook the best internal option. It is easy to delegate this role to someone with less management responsibilities on their plate. It is easy for some members of the retiring generation to assume they should take the lead, since they have more experience.
Simply put, it is easy to make an assumptive decision and miss an opportunity to select the best or most appropriate person. Applying the same three steps identified above to your internal selection can help counter that.
Taking time to intentionally build your transition team may or may not result in significant changes as you head into the planning process. However, it will help you feel confident that you have assembled a team that will provide the best chance at completing one of the most important plans for your farm and family.
Gavin Betker is a farm management consultant with Backswath Management Inc. He can be reached at 204-995-4978 or gavin.betker@backswath.com.
