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Planning is an important part of business. As a business or farm manager, having a plan in place for the future is as essential as having a map for a journey into unfamiliar territory. A road trip begins with a destination in mind and the map determines how you reach it. Business and farm planning works on the same premise as trip planning, you start with goals or your desired destination, then you work out a plan that will take you there. As with planning your vacation, you consider who is travelling with you what they may want to do and experience along the way.
A succession plan, one of many types of business plans, is very important for the successful transition of your farm or business to the next generation. You have spent years building the business, now is the time to look at the transition road map that considers your goals and that of your successor in reaching the desired destination.
A good plan will be tailored to your specific needs and may include some or all of the following:
1. Assessment of the compatibility of the founder's and successor's business and personal goals, objectives and expectations and arriving at a consensus
2. Projection of the cash requirements of the founders for their desired etirement life style
3. Projection of the cash needs of the successors for their desired life style
4. Projection of the ability of the farm or business to support both the founders and the successors
5. Consideration of the inheritance of family members who are not successors of the farm or business
6. Consideration of the details of transferring the business: business structure, tax and financing options
7. Developing a contingency plan for potential threats to the success of the overall plan
When it comes to this type of planning, it is very easy to procrastinate and wait until some situation comes up that forces some quick decisions to be made. A good plan takes some time and a lot of thought to develop to enable the transition to occur in a smooth successful manner. Wheatland Accounting can act as a facilitator to guide you through the process of developing a succession plan that is unique to your situation. Give us a call to arrange an appointment today!