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Two new transition services show how the advisory sector is evolving. How do your advisors compare?

When the words “transition process” come up, they often provoke a sigh or maybe even a shudder. Nor should anyone pretend that transitioning your farm business will be anything but a lengthy process, or that it won’t involve difficult conversations and decisions. But as always, if you’re equipped with the right tools and methods, the experience may be more gratifying and successful — and less painful.

The process is important. Through it, your pathway can be calculated, timed, measured, and customized to accommodate you and your family’s unique goals, schedule, and emotional load.

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The same goes for tools and resources, and the challenge for farm managers is to ensure their advisors are using the process that’s right for their farm, and to assess how their tools stack up as well.

To help, here are two new resources that promise to help you work through the intricacies of your one-of-a-kind transition experience, namely the Country Farmer’s Transition Process, and SuccessionMatching.com.

Compare away!

The Country Farmer’s Transition Process

Jeffrey Quenneville and Richard Walsh, investment advisors at Raymond James Ltd., developed the Country Farmer’s Transition Process when they noticed a pattern among the producers and growers they serviced in the Chateauguay Valley of southwest Quebec.

“The spark for creating the process was when so many farmers told us the same story at the end of their transition experience: there was no A to Z process, no services or resources to complement their basic accountant and notary meetings, no step-by-step guidance,” says Quenneville.

Since no two transition situations are identical, their process combines strategic coaching and the use of professionals who specialize in the many areas a business transfer touches on. The goal is a holistic approach centred around the farm’s unique needs. Critically, the goal is also to deliver experiential value: “We want to offer the best possible experience because it’s a hard topic for farmers to talk about. We want to become the gold standard for how it’s done,” says Walsh.

The biggest challenge they see when farmers are planning for retirement is simply getting the conversation started. Anne-Marie Dupras, lawyer and tax expert with MNP’s TransitionSmart process, and one of the experts Quenneville and Walsh partner with, says it’s much more palatable “if we break a massive undertaking down into bite-sized portions, step-by-step.”

“It’s like New Year’s Eve when everyone wants to go to the horizon,” says Walsh. “‘I’m going to lose more weight, I’m going to start that project, I want to sell my farm.’ The problem is, when you start walking towards the horizon, it keeps moving away. After a while it feels like an impossible task and you get frustrated and give up. However, in a process approach, you set out definable objectives and measurable goals and then you actually get to measure your baby steps towards that goal.”

“First, we sit down individually with each family member and ask them to voice the thoughts they have in their head,” says Dupras. “Through conversation things get clearer. We speak to the older generation (the retiree) first, then the children. Each generation has different ideas of what should happen and how it should happen,” she says.

There are both family and business elements to deal with in the case of farm transitions, and Dupras says the older generations are sometimes uncomfortable because such talks don’t seem “manly.”

“There are a lot of things unsaid in these situations,” she says, “but it’s such an important process in your life — so let’s do it right.”

Walsh adds, “Everyone out there over the age of 50 should probably come in and have a conversation.”

The goal of their initial free “comfort meeting” is to introduce farmers to the idea that a transition doesn’t have to be an onerous process as long as you surround yourself with a good team. “Many farmers come in with arms crossed, a look of anxiety or even fear on their faces,” says Walsh. “It’s important that we gain their confidence, show them that we’re not here to bilk them out of thousands of dollars, but really just to help them, and show them that there’s a way to respect the speed at which they want the process to happen. Relationship management is a key part of the process.”

As part of a whole team approach, Quenneville and Walsh have gathered a roster of experienced experts, like Dupras, who specialize in farm taxation, crisis management, real estate, and notarial services. “We are never in direct conflict with the existing services a farmer accesses, for example, their usual accountant; we work with them. If there are currently none on the farm’s payroll, we’ll parachute in the necessary expert,” says Walsh. “Not all elements of the process are required in every situation.”

The biggest change regarding farm transfers that Quenneville, Walsh, and Dupras have seen over the past 15 years is that it’s no longer a simple handover of the business from the father to the oldest son; there’s more capital and resources invested and often other family members to be compensated or who want to be part of the business.

From their point of view, the Raymond James team say they want both the successor(s) and retiree to leave their offices with peace of mind, saying the most rewarding thing about providing this service is that they are helping people achieve common and individual goals and that generational farms can continue to thrive.

SuccessionMatching.com

In 2011, when Alison Anderson, founder and CEO of SuccessionMatching, was working as an economic development officer, she came across a client who was looking to retire and sell their plumbing business. As often happens in many industries, when a sale sign goes up, suppliers and customers get nervous. They explored potential options (online posting boards, brokers, and classified ads), but quickly discovered that none of these alternatives offered the privacy required to sell the business in a cost-effective manner. That is when she came up with the idea for SuccessionMatching.com.

“We initially saw our role as a website to be more like a dating site; we played the role of matchmaker but did not attend the wedding,” jokes Anderson. “The site helps members privately find a compatible business for sale or a third-party buyer. Critically, members can begin and progress in their succession plan or business acquisition without disrupting their customer, supplier, employer, and colleague relationships.”

The platform boasts a sophisticated matching functionality that includes 197 match points. Users can choose between four levels of privacy settings for individual fields of information and there are nine different types of profiles. All users have access to helpful resources, for example, a purchase/sale agreement checklist, while members with active listings can take advantage of premium resources, such as an annual webinar series which provides any size farm or business with inexpensive expert advice.

Anderson notes there is a growing need for succession planning as the population ages and approaches retirement, and there are alarming statistics regarding farm and business owners who face myriad challenges in finding compatible buyers who can keep the business going. “So many business owners are forced to divest and shut down, which not only hurts the owners, but the surrounding communities as well,” she says.

She witnessed first-hand the far-reaching effects the sale of a farm can have when her grandparents sold their farm: equipment went to auction and the land was sold to a neighbour. She was determined to help other farms sell as a package to the incoming generation to increase their chances of success.

An additional critical component of success for the new farm owner is mentorship. “One of the things we have noticed among our farm clientele is a willingness to mentor the incoming owner,” Anderson says. “The nature of farming is such that mentorship is one of the best ways to pass on the generations of accumulated knowledge, so we work toward transitions that include mentorship from the person who has farmed the land for the last 40 years.”

Since access to financing is one of the biggest challenges for incoming farm owners, the SuccessionMatching platform also supports venture capital members so a young farmer can be matched with an investor who can help finance the transition.

Another unique challenge they’ve discovered is that the rate of incoming owners backing out of the transition as it nears completion tends to be higher on farms. Once many of the initial business and financing aspects are sorted out and talks turn more towards operations — what kind of crops to seed and machinery to use — disagreements on these matters can frustrate the process to the point where the incoming owner backs out completely.

SuccessionMatching takes a multi-pronged approach to address these types of situations. First, the compatibility functionality of the website helps pinpoint matches to lessen the chances of that occurring. They also draw on resources structured around successful communication, including a 30-minute webinar on conflict resolution tailored to family farm transitions. Workshops on succession planning show participants how to identify potential issues and provide suggestions for how to mitigate them. Additionally, they partner with professionals who are trained in mediation and conflict resolution, should that be something one of their members chooses to pursue.

“We don’t believe there is such a thing as a typical client or transition,” says Anderson. “All of our members have unique attributes and circumstances that make their succession plan particular to them.”

Overall, the transition process is both emotional and technical, but by making it a process, it can be adjusted to individual schedules and circumstances. Choosing the right tools and resources helps get the job done.

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