Management by farm stage
What stage is your farm business in right now? Are you starting up, growing,
maintaining, cutting back or phasing out?
Recently, more than 800 RBC Royal Bank farm and ranch clients were surveyed
on a variety of issues, part of our ongoing effort to understand the needs of our
valued clients. These clients are served as two distinct market segments: Farming
and Lifestyle Agriculture (for smaller and recreational farms), and Agriculture
(for commercial-scale producers).
We asked clients to identify their current stage of business. Among the Agriculture
segment, 3 per cent said they were in a start-up phase. Some 34 per cent said they
were growing – as fast as or faster than the economy in general. A solid 40 per cent
identified themselves as maintaining the status quo. Apart from a handful of
people who described themselves as gradually closing down the business, the
rest are preparing to make a transition of ownership: 15 per cent to family and
5 per cent to others.
For every stage, a strategy
At each stage of their business’s life cycle, farmers and ranchers have different
requirements for success. Most available information, however, concentrates on
the growth or maintenance stages. In response, RBC Royal Bank has developed
specialized resources to help our clients and their families manage the
transition stage.
If you happen to be in this stage, our Farm Succession Seminar event could be
just the ticket. This two-hour event offers expert perspectives on family, business
and investment issues. Accompanying the seminar is a workbook called Getting
Started: Issues to consider and actions to take in planning for your family farm
succession. It allows couples and families to identify what’s most important to
them, and plan for a frank and productive family discussion.
In the months since we’ve been delivering our Farm Succession Seminar across
Canada, clients have told me it’s one of the best farm planning exercises they’ve
ever been involved with. We’re delighted that it’s making a difference.
If you have any questions about farm succession planning, I invite you to
discuss them with your account manager. On behalf of RBC Royal Bank, all the
best for farm and family this fall.
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