Succession key element of farm business plan
When thinking about the benefits of planning for your agribusiness’s future, it’s natural to think in financial terms. But in speaking with Mick and John Cranny from Valley Syndicate in Bungundarra, good planning also buys you time.
Mick Cranny, having started Valley Syndicate with ‘a brother and a mate’ in 1977, was already having discussions about succession as early as the 1980s and ‘90s.
“It’s allowed me to walk away slowly,” he said.
It wasn’t until mate and business partner Tom decided it was time to slow down in the late 2000s however, that Mick asked his kids if any were interested in continuing the business.
“As a parent, I wanted the kids to figure out what they wanted. It was their decision about whether they wanted to farm,” he said.
Mick’s son John came on board, buying out Tom’s share in partnership with his cousin, Ben.
Since then, John has assumed a bigger role in the business that now sees him finalising finances to acquire Ben’s stake.
To assist him with securing the required finances, John engaged the help of Growcom’s Farm Business Resilience Program.
Delivered by Growcom, the project delivery arm of the Queensland Fruit & Vegetable Growers (QFVG), the Farm Business Resilience Program supports business planning. Through its holistic systems approach, the program works to improve the economic, environmental, and social resilience of agribusinesses.
As part of this facilitated process, Growcom Resilience Officer John Targett has supported John Cranny to assess risks to his farm business and apply for a QRIDA Sustainability Loan.
Sustainability loans are designed to help primary producers invest in activities ‘that improve farming system sustainability, natural resource sustainability and financial sustainability.’
Securing the farm’s future isn’t just about numbers, at its heart of course, is family.
To ease the emotional load of the process, the Crannys consulted with a number of parties including their accountant, solicitor, and trusted advisor Derek Lightfoot.
The family found that the most difficult part of the succession process was deciding on how to arrive at a fair value for the property.
John Cranny gave very practical advice when asked how to decide the value of your property, while protecting relationships:
Work out how to assess the value of your property before contemplating selling.
Have your valuation plan set.
Based on your valuation plan, recalculate your property’s value annually.
