TRANSITION PLANNING SERVICES
Since growing your operation has been your main priority over the years, it is hard to think about letting go and allowing someone else to take over. Contemplating the process can be overwhelming for many reasons: knowing where to start is just one of them.
Our experienced Consultants are uniquely qualified to assist your specific situation. Tough decisions regarding transitioning your farming operation to a family member or potential buyer require honest discussion. Our step-by-step approach covers all aspects of your operation and the family members it will affect. We ensure that your retirement is what you hoped it would be and that your farming operation’s life is set to succeed with the new ownership.
Discuss Your Vision, Goals, and Objectives
This is the foundation of the transition plan. Considering the vision, goals, and objectives of everyone involved in the transition including stakeholders, family dynamics, and possible conflicts is the first step.
Considering desired lifestyles and expected costs for those exiting the business and for those taking the business over is also something we discuss with you. All while ensuring we keep in mind the consideration of the business vision, near and long term goals.
Determine Your Personal and Business Net Worth
Understanding your personal net worth will ensure there are no unreasonable expectations built into the transition plan. It’s not uncommon to find that the transitioning individual(s) most significant asset is the business that they are transitioning; this is why valuing the business is important.
Once personal and business value is determined we will provide guidance surrounding how much you should sell your business for, required dividends, or other compensation from the continuing business to meet personal retirement financial needs.
Develop the Business Financial Plan
We have outlined the financial goals in step 1; now consider the funding requirements to meet those goals. Understanding the available cash flow after considering the projected profit, debt service obligations, dividend strategies, and capital purchases will provide us with information that allows us to build your Business Financial Plan.
Determine Retirement Cash Flow and Projected Net Worth Calculations
This step in the transition plan ties everything together; your vision and goals combined with net worth and cash flow. Then the effect of private and government pensions, RRSP’s, LIRA’s, RRIF’s, etc. on the overall cash flow and income tax strategy are considered.
Develop the Business Transition Plan
Taking into account all the steps prior, we also discuss the following with you:
- Considers ownership transfer
- Considers management transfer
- Considers training of the successors
- Considers timing of transfers, responsibility & accountability
- Considers income tax effective methods to transfer or reorganize
Develop a Communication Plan
It is important that all stakeholders are aware of the plan, not only key stakeholders. Tax & accounting, legal, wealth management, and financial institution professionals, and those supplying services to the farm/business will need to be informed of applicable information to ensure a seamless transition.
Discuss Risk Assessment and Contingency Planning
Considering the “what if’s” and being prepared for them is the final step in ensuring the plan is set up for success. We will consider potential risks to the plan and undertake a discussion on whether the risk is accepted or mitigated in some manner.
Meet The Team
Greg Smith FCPA, FCA
Transition Planning Consultant
Glen Budd CPA, CA
Transition Planning Consultant
Vern Peters CPA, CA, Partner
Tax Advisory Specialist
Cole Dionne CPA, MPAcc
We understand that value is more than just dollars and cents.
Let us assist you with the complexities that surround this decision-making process.
Not sure where to start? Complete the contact form below and a member of our team will be in touch with you!
Contact your trusted Stark & Marsh Advisor or an office close to you.
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