All dads want to be good parents. They want to do what’s best for their children and lead them down the right path so they can have a chance to succeed. In honour of Father’s Day this month, we wanted to talk about the ultimate act of fatherliness; leaving a legacy for your children.
A legacy is a gift of personal property that is handed down from one generation to the next. Leaving money in your will to your kids would be a good legacy and leaving property would possibly be even better.
But, probably the best type of legacy you could leave to your kids is one that continues to generate income so it’s not just a set amount of money, but something that keeps bringing in money for them. For that, we suggest a business.
Why a Business Makes a Good Legacy
Money is no doubt useful, but it is also impersonal and it doesn’t have any lasting memories for the receiver. Property, like a house, does come with those memories, but it may be too sentimental to be used as an income generating vehicle by renting it out or selling it.
A business can provide both. It is a personal entity that is chock full of memories and stories from your life, but it’s also capable of generating income for your kids when you hand it down to them. And, if your children pass it down to theirs and so on, it becomes something like a family heirloom.
Even before you hand it down to your kids, a business can be a valuable teaching tool for them. If children grow up in a household where their parents are hourly wage workers, that’s the life they are going to become accustomed to and they are more likely to seek out that type of work because it’s what they see everyday.
On the other hand, children who grow up in a household where their parents own and operate their own business will be influenced by this entrepreneurialism and grow up inspired to be a business owner.
You will also be able to use your business to teach your kids how to run a business and the value of work. Bring them in early and let them get a feel for working in the business and let them observe how you run it.
Best of all, a business isn’t something you have to leave in a will. You can work together with your children in the business, making it extra special for when you hand it over to them because it was something you shared.
How to Pass the Torch
Jack Mitchell is the current CEO of men’s clothing store Mitchells. He, along with his brother, received the store from their parents and, in turn, are planning to pass it along to their children, who are already working in the store chain.
Knowing a few things about passing a legacy in the form of a business from one generation to the next, Mitchell has come up with an outline of how to do it:
- Passion
- There must be passion to both pass on the business from the older generation and passion to receive the business from the younger generation.
- Help
- Passing down a business while ensuring its success isn’t as simple as handing over a set of keys. Get outside consulting and help to assist you when doing it.
- Outside Work
- Encourage your kids to work elsewhere for at least five years after their post-secondary education so they gain outside experience they can use in the business and to make sure they really want to accept the business when it is time for it to be passed down.
- Lack of Guarantee
- Don’t guarantee any family member — even your kids — that they’ll automatically get a job in the business. Everyone should demonstrate a true passion for wanting to work there and have the requisite skills to do so.
- Early Equity
- Pass along equity early so your children get that sense of ownership and know what they are working for (building their own wealth).
- Financial Security
- Provide the outgoing generation (you, in this case) with financial security so that you are not tempted to stay around too long and refrain from handing over the business.
- Communication
- Hold regular, open meetings with all family members so everyone knows what is going on. This will help to prevent any suspicions among family members about what is happening with the business.
- Have Fun
- Because even legacies should be fun.
How a Franchise Will Help
Just like a franchise will help you get started in business by providing a solid brand, a proven business model and assistance in myriad other ways, the franchise will also help your kids as they take over the business. It’s essentially like having a business coach. You can easily expand your franchise portfolio with your children joining the franchise, too. They will be privy to the same kind of aid from the franchise that you have received.
It’s clear that a franchise business is an excellent legacy for dads (and moms) to leave to their kids. The question is; what would be the best franchise to do that. FranNet can help you find the perfect franchising opportunity. If you believe you’re ready to take that first step toward business ownership so you can leave your children a lasting legacy, sign up for a free FranNet franchise search and consultation today.