Transitioning the family farm seems it should be a simple process. Once upon a time, perhaps it was. But farming is no longer simply a lifestyle, it is Agribusiness and it takes high level skills and knowledge to manage. In today’s world, the family farm has become a multifaceted, precise business machine, making the “passing down the keys” to the next generation a much more intricate deal.
Even though many farm transitions still occur within the family, it does not make the process any simpler. In fact, among family, it is much more difficult to maintain objectivity and to let emotions and personal factors slip into the mix. Coupled with that, the complex tax and legal processes involved in transferring any business in Canada, means family farm transfer takes a lot of strategic planning and communication.
According to the Ontario Ministry of Agriculture and Food, “Prior to any major transfer of assets it is critical to consult a tax advisor. Do this well in advance, since the best tax results often require a two or three year planning window.”
A good advisor can not only help you with the tax matters related to a business transfer, they are there to walk you through the more delicate issues of family business succession. According to Mike R. Bossy, partner with Bossy, Nagy, Geoffrey Chartered Accountants, “when dealing with your family in a business succession situation, you need to choose your words and actions carefully.”
Due to his reputation as an experienced accountant and innovative strategic planner, Mike has been recently asked to present at the Triennial Progressive Dairy Operators Symposium in Toronto this March. Because Family Farm Transfer is a specific area of expertise for Mike, he has been asked to speak on this highly important, but often avoided subject.
When he works with families as they plan the succession of a family business, not only does Mike address the financial and legal aspects of the transaction, he moves into the root of where real problems can arise; family communication. Mike spends time with a family assessing their core values, personality types, emotional state, and history to develop teamwork and a strategy that everyone can agree on.
Statistically only 30% of family businesses survive into the 2nd generation and of that, only 30% will move onto the 3rd generation, meaning the chances of a family business remaining “in the family” after only 2 generations is 1 out of 10. Miscommunication, poor planning and family history are the key culprits. As Mike notes, many families “cannot stop dwelling on events that happened long ago. These memories cause paralysis, stopping business families from thinking about a common future.”
Bossy will be speaking at the Triennial Progressive Dairy Operators Symposium being held March 25 – 27, 2013 at the DoubleTree by Hilton Hotel in Toronto. To learn more and to register, visit www.pdo-ontario.ca.
Written By Emy Brubacher, March 17, 2013