Handing over the reins
30 May 2019
Three years into taking over the family farm at Blackwood Creek, Tasmania, in line with the agreed succession plan, 33‑year‑old Scott Colvin says it’s going well.
“When it’s all done, you have to still be able to sit around and have Christmas lunch together,” said Scott, who shared his journey in a virtual (video) tour of his farm presented during the MLA‑sponsored Tasmanian Red Meat Updates in 2018.
“It’s important that everyone comes away willing to talk to each other. Everyone has to be satisfied with the outcome.
“A family farm is an emotional investment as much as anything, but you can’t split it based on the capital value. A fair split is not the same as an equal split.
“You have to look at the income‑earning potential of the asset.
“If you don’t do that, you end up with the one left on the farm working hard, struggling with limited equity and eventually going broke. That’s not good for anyone.”
Where to begin
To arrive at a plan that’s good for everyone, Scott suggested doing it early. His father, Andrew, agreed.
“I was the beneficiary of good succession planning and I wanted to be able to pass that benefit along,” Andrew said.
“Scott took over the reins of the business on 1 July after he turned 30. I’m told there’s a direct relationship between the rate of failure of taking over and the age at which you do so, with the chance of success dropping as you get older. I figure 30 is about the perfect age.
“I still work on the farm. I go to work every day and I ask Scott what we’re doing. I’m not going to pretend that’s always been easy, but it works well.
“I’ve also got other interests outside of the farm. That’s crucial for those handing over – you have to find something else to do with your time.”
Andrew’s other advice for successful transition includes setting a timeline, appointing someone from outside the family to help, and ensuring everyone comes to the negotiating table in a conciliatory frame of mind.
“We said two years, and we got it done in about 18 months,” Andrew said.
“If you don’t have a timeframe, it will just drag on and on.
“Our accountant helped us out, which was good because she has really great people skills and she understood our business. She spoke to everyone individually about what they wanted.
“Our succession planning was a little easier because it was only immediate family. But if there are partners or spouses, it’s crucial that they come to the meetings as well.”
Scott hands full credit for the successful succession in the Colvin family firmly to his father.
“The success of our succession plan is down to one person and that’s Dad,” he said.
“It’s one thing to hand over the asset, but fronting up to the workshop each morning and asking what’s on today, must really take something. I take my hat off to him.
“I ask his opinion on a daily basis. I’d be mad not to. He’s got 35 years’ experience running this place. He’s integral to the business but, at the end of the day, I pay the bills.”
The Colvins’ succession plan is up for review annually and has been documented as a legally binding agreement.