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  • Writer's pictureTsitsi Mutendi


Every business is unique and Each business is faced with its own complications. However, Family Business is usually faced with a unique and life-threatening complication; the family itself. In my journey working with family businesses, I’ve been presented with the narrative of the ever failing African family business. The one everyone knows, which was a beacon of light for the African entrepreneurial success story, with many many buses or stores and then it folded. It’s a sad story that almost everyone in every community knows and speaks of. So the narrative of African Family Business has become one of failure. And the successful ones have at times been plagued by the narrative of using witchcraft to stay afloat or being involved in criminal or illegal activities.

For today, let’s focus on the businesses that fail. If asked, most people would site that these businesses fail more quickly if the founder passes on or is incapacitated. Which is very true. Given the statistics of African Businesses and the low transition numbers from Founder to next-generation, what could be the issue here? I believe it’s quite simple in most cases. I have personally seen three big problems that face family businesses:

  1. Oversized Egos: Human beings have ego issues. And if we start businesses and do not check that ego when we walk through doors, our heads then fail to fit through the door. It feels good to get accolades and recognition when we succeed and more so when we start making money through our hard work. It is necessary to point out that our Businesses may have been started for personal gain, but in truth they are entities that can run without us if we set them up correctly and run them to optimize. We need to start treating a business as an entity that it truly is. It’s a vehicle. And sometimes vehicles break down and have issues. And as owners, we need to learn to let go of the vehicle. Send it in for service, upgrade it and at times sell it off. Don’t let your ego blind you to a business that’s failing in some way. Some business owners feel as if when the business fails it equally means that they have failed. This is not always accurate. Business owners need to Instead see the business as an entity separate to their personal being and serve it. Be able to admit when a business fails and keep it moving. Sometimes the financial sustainability we seek is in selling and starting over. b. Succession does not mean you are redundant and you are being disposed of. It means you are being promoted to a higher service and you have more control by being a guide than when you are running the business full time. As a business person it’s necessary to ensure the longevity of your legacy and as a Family Business owner, your successor is not always a clear cut case. Lay aside your ego and find a competent successor who you can train. c. Do not hire to stroke your ego but for competence. Family Business leaders especially have ego-driven hiring tendencies. Yes it may be your family business but the people who work for it must be competent enough to keep it working. Otherwise, you are all going to end up jobless. 

  2. Mismanagement of funds: When we start treating businesses as wallets that fit into our handbags and briefcases. Being in Family Business does not make a business a petty cash box. Put in place relevant financial measures that ensure that the business works for you and not vice versa. 

  3. Family governance: This is a matter I will bring up time and again. A family business is not a commercial enterprise. It is a unique entity that brings together a mechanical tool - the business and a very volatile implementer - the Family. It may have set up to serve a commercial function but in truth, the enterprise is in itself just a result of the ownership being able to direct it to function well. And in truth the ownership is the family. If the family cannot function well, this will overflow into the business. I’ll use for example the function of the brain and heart and lungs in the human body. They are known as the golden triangle. If one of the three fails, you are in danger. However the most critical of the triangle is the brain. The lungs fill the body with oxygen, the heart pumps oxygenated blood to the brain and the brain keeps the other organs functioning. The trio work in unison to keep the body alive. However, if the heart fails to pump blood and the lungs fail to get oxygen the triangle breaks and the brain gets signals that the body is dead and shuts down. The family is the brain in the business. It is the key to the triangle ensuring the body works. If the brain sends the wrong signals, we all know that it can cause havoc in the system.

Family governance is the equivalence of self-care and mental health care. The family must be understood and it’s function appreciated. It processes and communicates the world around it and communicates that back to the business. The family must then set in place it’s own rules of operations so that it can help direct the business in its functions. 

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