When I meet with clients about succession planning for their farm, ranch or other family business one of the first things we discuss is who they think will be the successor. The successor they have in mind may be a child, a key employee, or even a competitor. Once we have identified who the individual or individuals might be, the next important step is to reach out and talk with these individuals about their interest in taking over the business. I once met with some folks who were without doubt as to who would take over the farm – their oldest son. I asked them how things were going presently. They relayed to me that the son was not actually on the farm, but was in school studying for an unrelated occupation. I followed-up by asking when he planned to return. They indicated they didn’t know as they hadn’t discussed the matter with him. The father had taken over the farm because he was the eldest son and they assumed their eldest son would do the same. No one had ever asked him. The son was not really excited about the prospect of returning to the farm.
As a wise friend once told me, if you don’t ask, you don’t know. There is too much at stake to assume that your desired successor is interested and capable. Birth order and gender are really not relevant or determining factors. In planning for succession you should:
- Set a time table for your departure;
- Identify a handful of possible successors;
- Ascertain their interest in taking over the business;
- Assess each individuals talents and skills to determine if they have what it takes to “take over;”
- Train your potential successors for success; and
- Continually narrow the field.
Using this process, adapting when needed, and having clear communication along the way will allow you to identify the best person or persons to take over your business. It is important that they succeed, your retirement is at stake and the success of the business you have helped build is also at stake. It is never too early to start. Don’t leave things to chance.