For sustainable agribusinesses, effective succession planning is often the key to securing intergenerational success. Succession planning can seem daunting for many farmers - but it doesn’t always have to be.
For Bruce Webb, it was important to be able to hand his farms on to his children - and even more important that those farms were viable businesses. With the help of strategic diversification, the Webb family have shown that succession planning can not only be enjoyable but can set future generations up for success.
Bruce Webb and his children Simon Webb and Rebecca Stoner share their story of life on the farm in Marlborough, New Zealand, how they’ve expanded their operations, and what succession has meant for them.
Embracing the farm family lifestyle
Bruce Webb is proud of his farming legacy – especially when it comes to his family. After he and his late wife took on their first dairy farm, they raised their three children on the farm while expanding their business operations and taking new opportunities. This lifestyle is something Bruce cherishes.
“To bring up three children on a farm is very special and something I’ll always look back on. I think the children today would admit that they had a pretty good lifestyle, from the creeks to the hay sheds and motorbikes and all the things that kids do on the farm,” says Bruce.
With his children now grown up and with their own kids running around their farms, Bruce loves seeing the next generation live on the land – and he relishes the opportunities the farms might one day provide for his grandchildren.
From dairy to grapes - a journey in successful diversification
For many agribusinesses, diversification is integrated with succession planning. For farms to grow and remain successful in future generations, they often need to evolve. This is true for the Webb properties.
Bruce and his wife started their farm careers with one dairy farm – Pukaka, in Tuamarina - before expanding their dairy operation to include another property at the head of the Omaka Valley. Five years after that, they purchased another property, Burnlea, and decided to take the plunge and plant grapes – all because of the children.
“The diversification really came about because of the kids. My children were old enough to see that they didn't want to be dairy farmers. And my wife and I asked them, can you ever see yourself being a dairy farmer? And they said no. But then we floated the idea of putting some grapes in and some cattle and maybe one day we could look for another block of land and they were very supportive of that.”
Going from one dairy farm to three farm properties with cattle and grapes was a significant undertaking, but Bruce was supported by his children, who eventually moved into properties on the farms and took over management. Then came the natural progression to thinking about succession.
Steps to succession
Bruce’s goal was to give his children the same opportunities he had, and five years ago he decided to turn this goal into a reality. Still active on the farms and involved in their operations, he felt the time was right to hand over the reins to his children, knowing he could still be there to support them in their operations. His next step was to speak to his long-time accountant, Paul O’Donnell.
“My first port of call has always been to go to my accountant, Paul, to make sure financially it will work. I have always been a believer in having a team of people around me - an accountant, bank manager, people in the dairy industry, viticulturists, stock agents and so on. When I walked in the door to Paul and said, I've got a plan, he was all ears and we went down the line and methodically worked through the process,” says Bruce.
Next came the valuation of the farms, with Bruce determined to ensure he was leaving his children viable businesses.
I did not want to sell them a lemon.
“I did not want to sell them a lemon. The children had to borrow large sums of money to do this. I had to be very clear in my mind and they had to be very clear in their mind that these businesses were going to be sustainable long term,” he says.
While succession planning isn’t always straightforward, both Bruce and his children enjoyed the process, which has seen his son Simon and his wife Kate take on Burnlea Hills, and his daughter Rebecca and her husband Tom take on Pukaka.
“Succession planning can be very complex. From my point of view, it was very easy. The key to succession planning was having the right people around me that I could reach out to, like my accountants, bank managers and friends,” says Simon.
Trusting the process
With any succession planning, communication is key. For the Webb family, it was essential to have open conversations with everyone involved - including family members and trusted advisers.It's very important to have the right people around you - that's where I got my confidence from
“It's very important to have the right people around you - that's where I got my confidence from. I think going off the farm to talk to the accountants and bank managers and those sorts of people gives you huge confidence in what you're about to embark on,” says Bruce. As part of the process, Bruce needed to think beyond the day-to-day farm operations and ensure the business side of things was well taken care of. As a byproduct of succession planning, his children were able to dive into the financial operations of their farms. Bruce says he never had any doubt about whether his children could farm the land - as they were already doing it – but it was crucial that they could take over the business side.
“It was a matter of sitting down with both families and just going through their budgets to make sure that they knew what they were getting themselves in for,” he says.
“Prior to succession planning, they were farming but they didn't have an idea of the mechanics behind it. Paul and I put some information together about how it was going to work, how the budgets were going to work, what their income streams were going to be and so on. They knew how to plant grapes and prune grapes and shift cattle, but they just didn't know the nuts and bolts behind running the business. They do now.”
Simon, Rebecca and their families are looking forward to their farming futures and the opportunities they might provide for their children.
“I'm really excited for the future of our family in Pukaka because we have got options as a family, and we grow and learn on the farm all the time,” says Rebecca. “We love that the kids have the freedom to run around the farm and if they wish when they're older they can take over the farm.”
Her brother Simon agrees. “I want to be like Dad and have the opportunity to see my kids take things into their own hands and do what they want to do, just like we've had the same opportunity with our parents.”
And with the farms now in the capable hands of his children, Bruce is looking forward to enjoying his retirement while staying connected to the land.
I just can't wait year by year to see what they do on these farms
“The vision going forward is for me to retire into town, still have contact with the farms when I want to and see the kids and the grandkids have that opportunity to enjoy the farm life that I've been lucky enough to have. I think that's going to warm my heart as I go off into my retirement years. And I just can't wait year by year to see what they do on these farms.”
When embarking on a succession planning journey, it’s important to have the right people around you for support. BDO’s specialist agribusiness team can help. Find out more about what we do here, or get in touch with us here.