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Beyond the Bale : December 2015
ON FARM 49 BUSINESS PLANNING Mr Sewell said the young people that are most successful at getting finance are those with a realistic timeframe and have worked out exactly what they want to do. “Have an overall business strategy which describes, with timelines, how you will accomplish your goals – and be realistic about that. Do your projected cash flow. Consider all the aspects of getting into agriculture such as purchase costs (including stamp duty); look at what infrastructure (eg yards, sheds, fencing), machinery and livestock you require; and consider what working capital you need to keep the property going in the first few years.” Mr Sewell warns that when applying to the bank for a loan, it is critical that the presentation and its timing are right. “Banks are very busy. If you don’t present properly the first time around, they typically are not keen on looking at you again (because of time constraints) within a 6–12 month period. “There are several items of financial information that a bank will need to see to consider a loan application. These include the loan amounts required, loan types and terms, assets and liabilities, security, equity, cash flow forecasts and information on the historical financial and production performance of the property. “When embarking on sourcing funding, don’t try and do it by yourself. It is very important that you team up with good business advisors to help achieve your goals”. MORE INFORMATION www.leadingsheep.com.au Brad Sewell: firstname.lastname@example.org or 0427 390 016 Succession planning involves the transfer of ownership and control of farming assets to the next generation charged with the responsibility of continuing the business. It can be a complex issue for farm businesses, with often four generations actively involved. Understanding the different motivations, characteristics and needs of these groups is essential for constructive planning to occur. Each family situation is unique and legal and accounting advice should be obtained to work through the succession process. It is important to communicate openly with other family members and professionals. The ‘Guide to Succession – Sustaining Families and Farms’ has provided, and continues to provide, an important starting point for many families. The publication is divided into three sections: guiding principles, case studies, and tips and checklists. The first section provides guiding principles from professionals who may contribute to the succession planning process: an agronomist, an accountant, a lawyer, a financial planner and a generation consultant. The 16 case studies in the second section are drawn from the actual experiences of farm families. Each case study explains why the family came together, provides a diagrammatic representation of the family, lists assets and liabilities and details the agreements made by the family and their comments about those agreements. The final section provides tips and checklists to help in the initiation, development and implementation of a plan. The guide covers ‘front-end’ options when people are entering a business, either through invitation or marriage, and ‘back-end’ options when they are leaving. MORE INFORMATION Download the publication from www.wool.com or contact the AWI Helpline on 1800 070 099 to obtain a copy. Developing a succession plan that meets the expectations of all involved is not easy. A good starting point for people looking to broach the subject with family members is the ‘Guide to Succession’, produced in 2007 by GRDC with the support of AWI and other major agricultural organisations. HARD DECISIONS GUIDE TO HELP WITH THE SEVEN PRINCIPLES OF A SUCCESSION PLAN • Work out what the exiting generation wants to do – where they’ll live and what they will do in retirement – if succession is an option • Identify the needs and aspirations of each family member in each generation • Build, maintain and, if necessary, repair relationships between family members • Manage expectations amongst family members • Look at transferring management and control of the farm over time • Sort out how to transfer ownership of the farm • Determine what deal there should be for the incoming generation and what provision to make for the non- farming children.
In the Shops - March 2016