Wine Industry Articles
Why is Succession Planning so Hard to Face?
2010 Summer Issue of Canadian Grapes to Wine
Like many proprietors, you probably have a vision for your future. Perhaps you picture yourself golfing in the sunshine, or sipping a crisp chardonnay while overlooking your estate vineyard. However, like many business owners, you probably haven’t given much thought to the path between now and your ideal retirement.
If this is the case, you could be on the fast track to an involuntary sale of your winery or vineyard due to unexpected illness, death or financial troubles. You want to have control over when and to whom you sell or transition your business ― which can take years to coordinate effectively. So why are business owners afraid to start succession planning now?
Fear of losing money. You have worked hard to build and establish your winery and may fear something causing you to lose it. You may also have concerns that your children will have differing ideas of what are necessities and what will waste profit in your business. But avoiding these issues won’t eliminate them. In fact, it may only make them worse.
Fear of losing control. Whether your business is well-established or just getting off the ground, you have put in a great deal of energy to build it. If you feel that the business is your life ― and perhaps that no one else can run it as well as you have ― you may be resistant to letting go. It is especially important for business owners to express these fears to their advisors and families. Transitioning the business gradually can help owners ease out of full control and allow time for their successors to learn the ropes.
Fear of conflict. If you run a family business, differing views can cause family fights. You may not see eye to eye with your children on operational issues, or on the vision for the future of the business. When multiple children are involved in the business, you may be concerned about choosing one over another to take over, or that your children will not be able to work together without you. The most constructive way to mitigate this fear is to establish a mechanism for communication between you and your family members, such as regular family business meetings.
Fear of negative implications. Succession often implies retirement, and retirement involves being removed from service. You may be years away from this reality and not ready or willing to think about stepping down. Alternatively, you can plan for a transition, which is positive and focuses on the bigger future, allowing you to engage others in the process.
The more you plan now, the less you will be daunted by fears and uncertainty regarding the future of your business. The earlier you communicate your vision and discuss the views of your family members and key employees with them, the smoother your transition will be. Starting the transition process now will allow you to plan for bumps in the road, help your successors gain further knowledge and experience, and attain your objectives for a better future. Call your BDO advisor to start planning today.
BDO’s Wine Services Team may be reached at 250-763-6700 or 1-800-928-3307, or by email at: wineries@bdo.ca. www.bdo.ca/wineries
