Building Enduring Family Businesses [1]

Are you ready to unlock the secrets of building a family business that stands the test of time? Join Dr. Charles Apoki as he dives into the strategies and principles behind creating enduring family enterprises in his latest video, “Building Enduring Family Businesses.”

The Importance of Family Businesses

Family businesses are the backbone of many advanced economies, contributing between 70% to 80% of their total GDP. In the United States, family-based businesses grossing less than USD 250,000 contribute about 75% of the country’s GDP. During my visit to Adelaide, Australia, in 2015, I observed that many businesses, including large farms over a century old, were family-owned. However, in Nigeria, family businesses rarely endure beyond the founder’s lifetime.

Learning from Other Cultures

Most enduring family businesses globally are owned by Muslims, Asians, and Greek families. A Jewish man once told a black man that when money enters a Jewish hand, it circulates seven times within their community before leaving. In contrast, money in black communities often leaves immediately, contributing to economic backwardness and poverty.

Consider the story of Sir Shina Peters and Jim Ovia. In 1990, Peters built a private residence with 20 million Naira, while Ovia used the same amount to start Zenith Bank. If Zenith Bank lasts for a hundred years, it will employ tens of thousands of people, while the house will become a costly monument for Peters’ descendants. This illustrates the need for a long-term, trans-generational investment mindset among African Christians.

What is a Family Business?

A family business is an enterprise run by a group of people related by blood or marriage. Examples include the Trump family and the Dangote family. In many cultures, both sons and daughters join the family business with their spouses. The Rothschilds, for instance, avoided marrying outside the family to keep their wealth within.

Building a Business

Building a successful family business is deliberate, planned, and progressive. It involves strategic planning, nurturing, and a stage-by-stage development process. It requires projection, protection, preservation, and propagation from generation to generation. For example, the vision of Dubai has been passed down through generations, ensuring continuous growth and development.

Enduring Businesses

To endure means to be long-lasting, trans-generational, and resilient. Many Nigerian hotels, for instance, don’t last longer than 20 years before decaying. In contrast, the Stanley Hotel in Nairobi, Kenya, has been operational since 1902, and Hoshi Ryokan in Japan has been run by a family for 1300 years. The Beretta family has been producing guns in Italy for nearly 500 years, and Smithfield Foods has grown from a family business to the world’s largest pork producer.

Why Family Businesses?

1. National and Community Development: Family businesses like Harley Davidson, Cadbury, and Tata Corporation started small and grew to contribute significantly to national and global development.
2. Employment: Family businesses provide employment beyond the bloodline. For instance, Wal-Mart, founded by Sam Walton, employs about 2.3 million workers worldwide.
3. Stability: They are relatively more stable than public companies due to close monitoring and supervision.
4. Career Paths: They provide career paths for family members across generations, transferring skills and improving the business over time.
5. Influence: Due to their services, popularity, and spread, family businesses often hold social, political, and economic influence.

Enduring Family Businesses

Family businesses that endure can be in various sectors, including:

• Foundries
• Real estate
• Retail
• Agriculture
• Funeral homes
• Engineering
• Banking
• Education

Any family business can endure if the right principles are applied.

Conclusion

In the next post, we will explore sustainability and why many family businesses fail. Building an enduring family business requires a deliberate, planned approach with a focus on long-term, trans-generational growth.

For more insights, check out these books: Creating Wealth, The Dynamism of Wealth, Don’t Drop the Baton, The Philosophy of the Ant, Money is an Idiot, Digging Your Gold, and many more.

Stay blessed and continue to build enduring legacies.

Dr. Charles Apoki