Succession planning for rural or business owners
Succession planning is generally defined as the process of preparing for the transfer of ownership, leadership, and management of a business or farm. This is often to another person or group, a family member, employee, or external buyer, to ensure continuity and long-term success. It’s not just about retirement; it also protects the business in case of unexpected events like illness or death.
- When to start: Start now – the earlier, the better. Ideally, begin planning 5–10 years before you intend to step back. Even if you’re unsure who will take over, it’s worth starting the process.
- Start the conversation: Talk with family, business partners, or key staff. Be open about your goals and expectations. Ask: who wants to be involved? Who doesn’t?
- Clarify your vision: Do you want the business to stay in the family? Are you planning to sell, gift, or share ownership? What legacy do you want to leave?
- Assess the business: Get a valuation of the business or farm. Review financials, assets, debts, and risks. Identify key roles and who fills them.
- Choose a successor: Identify who is capable and willing. Consider training or mentoring needs. Be fair, but fair doesn’t always mean equal.
- Legal and financial planning: Update your will and trusts. Create or review buy-sell agreements. Talk to your adviser, lawyer and accountant. Check for any tax implications.
- Create a succession plan: Write down the plan: who, when, and how. Include timelines, roles, and responsibilities. Plan for unexpected events like death, illness, or divorce.
- Communicate the plan: Share it with everyone involved. Be clear and transparent to avoid future conflict.
- Review regularly: Revisit the plan every 1–2 years. Update it as circumstances change.
This information is of a general nature and is not intended as personalised financial advice. RIVAL Wealth is a Financial Advice Provider (FAP) licenced by the Financial Markets Authority to provide financial advice. Our disclosure document is located at rivalwealth.co.nz or a written copy is available on request
