Succession planning in a family business

Over 80% of all private sector businesses are family owned, but passing the reigns on to the next generation remains a daunting challenge for many.

Abdul Waheed, founder and Director of Best Trading, has journeyed across the globe on the way to owning his own business. Thanks to decades of hard work and building connections, Best Trading had a net profit of over 700k this year, and is expected to grow to nearly £1m by the end of the financial year. But as a self-proclaimed control freak in an entirely family-owned business, the prospect of passing the company on to his son has become a daunting challenge for Abdul.

Waheed grew up in a rural town halfway between Islamabad and Lahore in northern Pakistan. As the son of a farmer, Waheed learnt the power of self-sufficiency from a young age. All the family’s needs were fulfilled by the farm and his father’s work. Whatever they didn’t use as sustenance was sold, giving Waheed a strong sense of ownership, production, and salesmanship.

Abdul of Arabia

Ten years later, and the financial opportunities for Waheed were continuing to lack in Pakistan. As the Gulf region was experiencing an economic boom at the time due to the oil industry, Waheed decided to migrate over to Dammam, Saudi Arabia. After becoming fluent in Arabic, Waheed discovered he had a talent for salesmanship and began a budding career at a local logistics business called Best Group and found instant success.

‘Dammam was great. The culture was different to Northern Pakistan though. It’s more about who you know. That’s why I worked hard to build relationships. One of the relationships I built was with my boss, and because I was good at my job, he eventually told me that whatever new business I brought to the company, he would give me in shares. Through this new business activity I forged relationships with Saudi Electricity and Saudi Aramco, supplying them with electromechanical parts.’

Final leg of the journey

By this point, the 90s were coming to an end and Waheed was already married and had children. Unfortunately, his daughter’s health had begun to deteriorate due to a muscular disorder and, as his wife was a British national, Waheed opted for another move, but this time to Slough in South East England in 2004.

Waheed now had 20 years of logistics experience and had accrued a wealth of knowledge. It was for this reason that he began working with TNT, a UK-based courier that allows sub-contractors to fulfil services. Not only had Waheed hired out a van to fulfil courier services for TNT, but he also began the process of registering his own company and named it Best Trading, an acknowledgement to the business in Dammam that proved so fruitful for him.

Best Trading in its formative years was simply running enquiries and quoting materials for his contacts back in Saudi Arabia as there was no sizable investment in the business to fulfil the large orders themselves. Regardless, Waheed worked during the day for TNT and spent his nights running numbers for Best Trading.

‘In the early days it was tough. I was working 16-hour days. We would make some small purchases from suppliers here in Europe, my wife would repackage them in my home, and we would send them to Saudi for a small profit.’

At the same time that Best Trading was working through its humble beginnings, Waheed’s contract with TNT was growing rapidly. By 2008, Waheed had amassed nine vans delivering across the South East. But just as Waheed was starting to find some stability, the financial crash came, forcing businesses across the globe to downsize. In an instant, Waheed’s TNT fleet became redundant.

‘The financial crash forced all couriers to reduce their operations. We weren’t the only one. I knew I wanted to own my own business still and I saw a lot of South Asians open restaurants. So, I did the same. But within seven months I closed it down. It was not my cup tea. I was used to spread sheets and logistics, not curry.’

Best Group offers a surprising investment

Shortly after Waheed sold his restaurant, he got the news that he was being bought out of his shares in Best Group back in Saudi Arabia due to the company going bust. The company that took over Best Group offered Waheed £266k, enough capital to buy his house in Slough and make Best Trading his full-time job.

‘I spent £66k on my house and put the rest in the business. When I think about it now, that was quite risky. It was all my money. If an order fell through, or a client didn’t pay for the product, I would have been penniless.’

Five years after his cash injection, Best Trading was plodding along at a steady pace. Regular orders from his contacts in Saudi Arabia led to a net profit of £116k in 2016. Waheed had also began enlisting various family members into the business. His brother had come over from Pakistan to join the business, his nephew was in Saudi Arabia receiving orders and his brother in-law was in Spain managing relationships with the suppliers.

‘The most impactful hiring was my son Faisal. He’s been a true asset to the company. We have increased our profit margins seven-fold since he began working here. His efficiency and communication skills have streamlined so much of what we do. But I’m a control freak. Allowing Faisal to do anything in the beginning was hard.’

Waheed knew that his son was already a valuable asset to the business but wanted to develop his leadership and management skills. Waheed wanted to trust that he would make the right decisions when the time came so began looking into different training programmes.

After receiving a letter about the Help to Grow: Management Course, Waheed jumped at the chance to enrol his son in the holistic management course that was 90% paid for by the Government. But as the time approached for Faisal to attend the course, Waheed got a message from him saying he was unable to attend.

‘I was in Turkey at the time on holiday. Faisal was looking after the business and told me that he wouldn’t be able to attend the sessions as he was too busy with orders. He told me to go instead, so I did. I missed the first induction session due to my holiday but attended everything since.

‘It wasn’t until the Module 3 case study when the lecturer asked me what my plan for the future was that I just came out with, “hand the business over to my son.” The lecturer helped me come up with a succession plan and draft up a share holders’ agreement. But it was learning how to trust him as a decision-maker that made me far more comfortable.’

The next generation

Waheed is a self-proclaimed control freak and risk taker. Allowing his son to make financially significant decisions on the materials and suppliers was therefore unnatural. But on the course, Waheed learnt that he had to encourage Faisal to take risks and allow him to make mistakes independently to learn the same way he had as a young businessman.

While Waheed is insistent that he won’t leave the company until he leaves this Earth, he has since taken a back seat in Best Trading and focuses more on strategy and one of his greatest skills, managing relationships with clients. Waheed has learnt that trusting his son to run the business isn’t trusting that he won’t make mistakes, but rather that he is willing to make them in the first place and learn from them.

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