While beef producers know what it takes to be successful today, many are less comfortable planning for future success. As with many aspects of their operation, identifying the obstacles and getting an early start are critical to achieving the proper outcome for producers and their families.
“Succession planning is not something you can discuss, agree upon and implement all in one day,” said Cathy Sharp, Chair of CCA’s Value Creation and Competitiveness Committee. “It can take months or even years depending on the complexity of the farm operation and number of people involved in the plan.”
That investment in time is well worth it when you consider the benefits. In addition to creating growth and opportunities for the business and avoiding tax implications, succession planning helps maintain the land in livestock production, providing an environmental and biodiversity benefit for everyone.
Given these benefits, there’s a clear motivation for people to start planning right away; which begs the question: why don’t they?
“Uncertainty and fear of the unknown are big impediments,” said Sharp. “Oftentimes there is no communication among family members to know what each person wants, or producers might think they need to know all the answers right away. As a result, people keep putting it off for a rainy day and that day never comes.”
As well, if the subject is broached by the younger generation, there may be a perception that they are unduly focused on acquiring farm assets.
Like any daunting task, succession planning can often fail before it starts because producers simply don’t know where to begin, how to find the right assistance or what questions to ask. Fortunately, a little research can go a long way in this regard. Succession planning is not about re-inventing the wheel, so producers should take comfort in knowing there is a lot of help out there.
“I advise people to do their homework, read informative articles and talk to others who have done this,” Sharp said. “Seek out an advisor or facilitator to help get you started and prepare for that first meeting. Knowing the right questions to ask can save producers money by using time effectively with the professional firm they’ve hired.”
According to Sharp, a proper succession plan should include five elements: communication plan, business plan, integration plan, retirement plan and asset transfer plan. It’s also crucial to set concrete goals, so that both sides know the targeted outcomes for 1, 3, 5, 10 and 20 years down the road.
With succession planning, taking it on instead of putting it off is a matter of addressing obstacles, asking for help and being willing to have the hard conversations. For motivation, it can be useful to focus on the benefits and the peace of mind that will come with a plan, while staying open to new ideas or changes to the business. Apart from benefitting your own operation, proper transitioning is important for sustaining Canada’s beef cow herd.
Once your plan is in place, take a moment to celebrate success, and take heart in knowing you’ve helped build that same success for generations to come. For more information on how to start the succession planning discussion, click here.