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How Do I Prepare Someone To Take Over My Family-Owned Business?
Three of every four businesses will change hands in the next ten years when Canada’s producers and farm owners retire.
As the owner of an agricultural business, you’ve worked hard for many years. Whether you pass the business on to your children when you retire or sell the business to someone outside the family, you want your business to continue to be a success. However, research shows that few family-owned businesses—as few as one in three—survive the transition. One of the major reasons for this failure is a lack of planning.
Succession planning involves transferring the ownership and management of your farm in order to ensure its continued success. As a family business, decisions about the future of a family farm are related to personal, family, and business goals. A successful succession plan must address the needs of all family members as well as protect the long-term success of the business.
Although most owners know that a succession plan is important, many owners delay planning because they’re too busy or because they don’t like to think about the day they’ll need to hand their business over to another person. However, due to ill health, injury, or a death in the family, you might need to transfer your business sooner than expected. This could cause serious problems for your successor if you don’t have a detailed succession plan in place.
Succession planning takes time, perhaps as much as several years to complete. The sooner you start drawing up your plan, the better your chances of a successful business transfer.