Managing Business Transitions
Managing transitions in business is recognised by farmers and their advisors as an infrequent event outside of the normal operation of a business and therefore requires particular care to plan and execute. As some transitions only happen once in a lifetime and often have very significant results to long term wealth and security, the success of them is critical to the individuals, their families and the dairy industry.
Most of the western region’s farms are family owned which can be their primary strength and their principal weakness. A family business can have very special problems and needs because of its specific nature (mixing business and family relations) and ownership structure.
Research has shown that:
• Most family businesses (70%) are either liquidated or sold after the retirement of their founders
• Only one-third of family owned businesses survive to the second generation; and
• Less than 15% of family owned businesses survive to the third generation
Managing Business Transitions is an extension and research project to assist farm businesses to plan and move from one business arrangement/structure to another e.g. from self operation to “employing” a share farmer. The project will:
• Coordinate the program with the Regional Extension Committee
• Collaborate with PiD programs to scope out a program that assists farmers through business transitions; and
• Develop a delivery plan to support farmers through business transitions