Five Keys to Planning Success

Oct 25th 2011, Legacy by Design

By Kevin Spafford, for National Agricultural Aviation Association

“You never forget your first solo.” It’s a common refrain for anyone who’s ever spent time around an airport. As a pilot, you know it’s true. As an experienced ag pilot, you also know that first solo was only the beginning of a lifelong adventure in learning. The lessons didn’t stop when you could fly straight and level; real insight came with hours in the seat. Becoming proficient and refining your skills are the result of trial and error, a lot of experiences, and nonfatal mistakes. 

That first solo was merely a stepping stone, an opportunity to continue learning. School wasn’t out because you could fly alone. You went on, earned a private ticket and commercial license, got certified as a pesticide applicator and obtained a Part 137 certificate in many cases. You refined your skills and continue to learn today. Now you’re a sage in the industry.  

Like flying, life is full of learning opportunities. And the more you learn the more you want to know, the more you know the more you want to understand…  

Succession—planning for an eventual ownership transfer, the next stage in your vocational life, and the next phase of business growth—is very much the same as learning to fly. Following the steps, learning the rudiments and refining the process will help you achieve your most heartfelt goals. As I’ve shared with clients, workshop participants and other advisors there are five essential steps to achieving succession planning goals:

1.     Learn and utilize good communication skills.

2.     Define objectives for succession.

3.     Overcome common planning obstacles.

4.     Continue to grow and stabilize the operation.

5.     Take definitive action, and stay the course.

 

Learn to Use Good Communication Skills

Communication is the heartbeat of any business. Learning to connect in a respectful and constructive manner is necessary for planning success. Good communication will help you, loyal employees and customers navigate the succession planning process—especially as you begin the transition from one owner/manager to the next.  

Communication is more than talking. It’s listening to learn, and then making sure your actions support the message. It’s important to understand the wants, needs and intentions of others. Most owners have spent a lifetime communicating, but they need to realize that transitioning a business through a sale, merger or acquisition requires a new level of intent, call it formality, to maximize results.  

Although it may seem a bit formal to some aerial applicators, a written communication plan can be very advantageous for you and the business. A good communication plan should include:

• Regular meetings
• Written agendas
• Behavior guidelines
• A decision-making process
• Written/taped records of each meeting
• Follow-up procedures

Define Objectives for Succession

Human nature encourages us to focus on our own needs first. As an entrepreneur, unchecked self-interest can be the beginning of the end. As an owner, you must acknowledge the decisions you make and actions you take will affect many others. You must consider the wants and needs of an acquiring owner, as well as loyal employees and customers. Focusing your efforts on what’s best for the business will result in an operation that will continue to endow you with financial rewards, growing equity and provide vocational satisfaction.

You should focus on succession planning objectives related to:

• Improving operational integrity
• Enhancing financial security
• Preparing a next generation to lead the operation 

Overcome Common Planning Obstacles

A succession plan must overcome hurdles that are common to every entrepreneurial venture and provide solutions to the complex puzzles which plague most business owners. The succession planning process is designed first to distill those concerns and draw them out into the light of day, and then to develop solutions to which all the stakeholders can commit.  

Early in the succession planning process, you must confront and consider the following common obstacles:

•  Identifying the right successors.
• Ensuring financial security for the owner.
• Negotiating a workable ownership transition.
• Involving extended stakeholders—loyal employees, customers, alliance partners and family.
• Tackling the unknown…  

Continue to Grow and Stabilize the Operation

If each of the stakeholders speaks for their own self-interest, who speaks for the operation? If the operation is going to survive and continue to endow the current owners in retirement while providing future opportunities for the new owner, it must have a voice in the discussion. I call it “giving voice to the operation.” A vibrant, healthy and growing business will return opportunities in direct proportion to the care it’s given. The opposite is true as well. If a business is not healthy, financially and structurally, it cannot possibly continue to survive, especially through an ownership transition.  

The strength and long-term health of the business must be a first priority. Like Aesop’s goose that laid the golden eggs, if not careful we can tear it apart …

·         Each decision must be measured against what is good for the operation.

·         Each of the stakeholders must realize some financial and intrinsic value from continuing ownership.

·         Personal goals must not compromise or unduly burden the integrity of the operation.  

 

Take Definitive Action, and Stay the Course

Good intentions without action are just hollow promises. They don’t mean anything, and they’ll never lead to a successful result. A determined entrepreneur must take definitive action in order to achieve his most heartfelt succession intentions. Each stakeholder plays a vital role in the succession planning process. From the very first step to implementation, from accountability to professional development, each person must accept the obligation for a successful outcome.  

Are you ready to take the next step? Go to the Farm Journal Legacy Project website and learn more about the tools and resources I’ve made available for farmers and agribusiness owners. The Legacy Project is designed to provide good information, relevant tools and valuable experiences to the agricultural community. Though many of the tools refer to farmers and agribusiness owners, the planning principles and the tools are appropriate for all agripreneurs.

National Agricultual Aviation Association

Kevin Spafford serves as Farm Journal’s succession planning expert. His firm, Legacy by Design (Legacy-by-Design.com), works with farm families from coast to coast, guiding them through the succession process. He has a lifetime love of farming and flying. For questions: (877) 523-7411 or legacyproject@farmjournal.com.

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