This year’s Nation in Conversation’s theme, adapt or die, focuses on issues that revolve around a new kind of mindset to change the status quo in order to survive. The first discussion focused on the importance of succession planning for family farming businesses. To change your outlook in how you manage your business might save your family farming business.
The well-balanced panel discussed the fact that farmers need to position themselves to change leadership on a farm. A thorough succession plan is needed to make the transition to the next generation a little bit easier. Thorough planning is necessary to ensure success – not only for the business, but also for all involved individuals. “If the senior farmer has no access to capital, he will not step back from farming. If he needs to ask for money to fill his tank, he will not give over.”
Gerhard Bruwer, farmer from Genade Boerdery near Douglas, said that cooperation on a family farm is of great importance. He emphasised that the transfer of the farm from a dad or father-in-law to the next generation is essential and that the children should be given a fair chance. “Every member of the family needs to acknowledge other family members’ skills, which should be used to the benefit of the farm.”
Dr Stefan Strydom from SS Wealth and specialist in the field of trusts and estates added by saying that South Africa needs businesses tough enough to survive the economic climate, and to achieve this proper planning is necessary. “Outside expertise should be used when needed, as well as to stay objective. Family business should actually be professionalised. Emotional decision making can be very dangerous.
Strydom said that succession planning should start early, and while everyone is still alive. “The earlier you talk about the future, and put these talks into writing, the better for everyone. The earlier you sort out these things, the smoother the transition to the next generation will be.”
Vorster said that families first need to decide whether a farm is indeed a family business, whereafter the decision should be made how succession planning is going to be managed. “First the dream and vision and then the legal documents.” He also warned against entitlement which is a red light in any family business. “Work together for the sake of the business. Not ‘what is in it for me’ but ‘what is in it for the business’. The family constitution should address conflict management and entitlement.”
Tony Belshaw from VOS Quantum Solutions, expert and leading consultant in the field of family business, said that communication is critical. “Trust in a family business is fundamental. It means you can rely on the next person's competence.”
Facilitator Anlie Hattingh, well-known eNCA news anchor, asked the question when it is perhaps better to decide to call it a day, on which Balshaw and Vorster both agreed that this should be an objective and thought-through decision. “Never force a business to stay in business. If family members do not want to continue with the business, they should not be forced. Then rather make the decision to bring an end to it.”
Watch this discussion here if you missed it. Book your seat for upcoming Nation in Conversation sessions here.
Issued by Nation in Conversation: 16 May 2023
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Elmarie Joynt
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