There are some startling statistics regarding successful family business transitions – 30% transition successfully to the second generation and only 10% to the third generation. Although it would be ideal if the chances of a successful transition in farm families were better, the odds are still less than favourable.
The primary reason for a transition failure is the breakdown of communication and trust. These are the so-called “soft issues” that many families fail to consider when going through a major change along their journey. The good news is that it is possible to successfully transition farms between generations.
In the book, Consulting to Family Business the authors identifies the Characteristics of Healthy Family Enterprises:
- Communications are open and clear
- Family is able to resolve conflicts
- High trust between family members
- Goals and values of the family are clear
- Boundaries between family and business are clear
- Succession is planned early
Our Business Transition Team at BDO includes Family Enterprise Advisors that are trained to help cultivate the characteristics of healthy family enterprises and successfully transition management and ownership to the next generation of farmers.