• Monday, May 27, 2024
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Only 30% of Nigerian family businesses outlive first generation – LBS

Only 30% of Nigerian family businesses outlive first generation – LBS

Chris Ogbechie, dean of Lagos Business School (LBS), has said only 30 percent of family businesses in Nigeria survive beyond their first generation.

Ogbechie said this during the LBS’s family business conference in Lagos on Friday.

According to him, family businesses all over the world are faced with unique challenges. This, he said, inspired the LBS to come up with an initiative to foster conversations surrounding the peculiar challenges faced by family-owned enterprises.

“Despite their contributions, statistics show that only about 30 percent of Nigerian family businesses survive past the first generation according to research by the Nigerian Stock Exchange on family businesses. This highlights the critical need for tailored support to ensure their longevity and continued success,” Ogbechie said.

He said these statistics underscore the resilience and enduring legacy of family businesses in society and that it also highlights the need for continuous learning and adaptation to ensure sustained success in an ever-changing business landscape.

Okey Nwuke, director of the family business initiative, said many family businesses have gone out of business owing to a vast array of issues.

He said about 24 million family businesses in Nigeria contribute up to $200 billion to the national economy.

In her keynote address, Ibukun Awosika, founder of the Chair Centre Group, highlighted the need for a family business to clearly articulate its vision.

She said the survival of family businesses across generations primarily depends on structures built to enable the business to outlive the founding fathers.

She also added that family businesses should allow successors to run with their ideas without necessarily being bugged by pre-existing templates of their predecessors.

“What is the vision in the mind of the person who started the business and what is the vision as the business undergoes the process of transition? A lot of times, we do not have clarity on why we started the business in the first place,” she said.

“Is it just to make money? Is it to provide for our family? Is it to keep our family name in the public eye? Or is it to build an institution that will create value across time? Because your actions will depend on your vision.”

Awosika said for family businesses to stand the test of time, they must embrace the right values.

She added that families must critically examine their talents to determine how these talents would be deployed to various aspects of the businesses.

For family businesses run by spouses, Awosika pointed out that it was important for one person to make the needed sacrifices to strike a balance between running the business and running the home.

“If we are building institutions, we need to ask ourselves — did I build for my children? I don’t believe in that because this is my vision, not my children’s vision. My father did not force me into his vision,” she said.