Tips for succession planning
Bob Betz and Steve Griessel offer these suggestions to growers, winemakers, and others involved in agriculture interested in developing a succession plan:
1. Plan ahead.
• Allow several years to develop succession plan.
• Get your financial house in order, trends going in right direction.
• Have available past tax returns, profit/loss statements, and critical loans paid off or already renegotiated.
• Allow plenty of time to find a buyer and negotiate a deal. It won’t happen in a few months.
2. Decide what you truly want to accomplish.
• Are you really ready to fully retire from something that was your life?
• Define the transition period. A true succession plan has a multiyear transition period. However, if major changes to the business are planned, the transition time frame should be short.
3. Understand and be honest when valuing your business.
• Overinflated values will result in a lot of talk but little action from interested parties.
4. Retain a professional organization.
• Use a merger and acquisition or investment firm when selling a business. Find one that can conduct confidential, high-level negotiations.
5. Keep plans confidential.
• Draw up a robust confidentiality agreement. When news leaks out, the value is almost always reduced, Griessel said. Betz added that even his children did not know of their plans to sell the business.