May 6, 2020
Jason Waldron | Senior Sales Manager, Zurich Middle East
Making your mark, leaving a legacy
Often, in my interactions with owners of family-run businesses, the word “legacy” plays an essential role in creating a succession plan. Often what a business owner perceives as a family legacy, is really just personal legacy so he can be remembered.
As a small business owner, stop for a moment and consider what kind of legacy you want to leave for your dependents and how you want to be remembered.
A life on the high seas is not for everyone
If you aspire to hand the reins for your business over to the family, consider that some family members will want to contribute to the growth of the business when you are gone, while other’s will pursue their own path.
Consider my own example, my father was a commercial fisherman and owned several boats. He was successful, raised a family with two children, and ensured that my sister and I were primed to ascend into the family business.
I went on to take over the business, this made sense to me on a number of levels. There was enough profit to attract and retain me and because my father had instilled years of knowledge into my training and education, I was comfortable running the business in his absence. I became a successful part of our family legacy, helping it to reach new heights.
My sister however, wasn’t overly keen on joining the family business and becoming a commercial fisherwoman.
A fair and equitable legacy
Herein lies the problem my father had in preserving his legacy.
Had something had happened to my father such as death, illness or incapacity, I would inherit his fishing boats, shares in the company and his commercial license worth approximately $1m. My sister on the other hand, would inherit very little in comparison.
After considering the legacy that he wanted to leave behind, my father invested in an insurance policy that would equalize our inheritance in the event of his death. In this scenario, there was no need to divide any shares or assets amongst siblings which could have created conflict and subsequent business failure. Simply put, I would receive the business and assets, while my sister would receive $1m from the proceeds of the life insurance policy.
An important lesson for family businesses in the UAE
As an owner of a family business, are you sailing the legacy seas of uncertainty or have you put plans in place that secures the survival of your business and the lives of the ones you love?
With many UAE businesses currently in the first generation of ownership, a succession plan is imperative for any family business owner looking to avoid significant conflict between their nearest and dearest.
I share my father’s vision on leaving a legacy, on making your mark. So, gather together with your family, consider their plans and goals and then celebrate the decisions you made to protect them and support their dreams.
I am very happy to tell you that my father kept himself healthy and well and we ran the business together until his eventual retirement. At this time, we sold the family business and I pursued the bright lights of financial services.