Do you have a grip on your business’ succession plan? As the owner of your own farm or agribusiness, you’ve probably thought about building generational wealth and leaving a lasting legacy.
If you’ve been watching Food For Mzansi TV, you’ve already learnt a lot about getting your agribusiness on the right track. From budgeting and debt to diversification, Standard Bank’s team of agribusiness experts have been sharing their insight with us.
Today, however, we’ve got something special for you: Nico Groenewald, Standard Bank’s head of agribusiness, chats to Food For Mzansi editor Dawn Noemdoe about business succession and what that can mean for you and your business.
What is business succession?
The motive for any business should be to create value. If you’re running your own agribusiness, you probably already know about all the struggles and sacrifices you’ve had to make to succeed. Your goal is for your business to continue on into the future. Business succession is exactly that: working towards ensuring that your business continues on after you have moved on. It’s all about creating generational wealth. This means that you also have to think about replacement planning, or passing on the ownership of your business to either a family member, an employee or someone that will keep the business running smoothly into the future.
Why is business succession so important?
In the US, most businesses are family-owned, but only 30% of them make it to the second generation. Starting any business ideally comes with the dream of creating a business that lasts.
How do you start planning for your business to last?
Groenewald’s first tip is to remember that planning for business succession can’t be done in isolation. You need to involve the rest of your team when planning ahead for your business, and that doesn’t just mean family members. Groenewald outlines who needs to know about your plan and why (check out the episode for the full list of stakeholders you need to keep in mind when planning for your succession).
Your succession plan should actually be a part of your business strategy, believes Groenewald. Everything works together, and everything ties in together. Once you have your business plan in place, all these blocks will fall in place.
Keeping in mind how your business will not only continue on, but will evolve and grow over time is key to ensuring that your legacy continues, even after you’ve moved on.