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  • Service: Enterprise, Family business
  • Type: Business and industry issue
  • Date: 10/18/2013

The challenge for families doing business in Africa 

The challenge in Africa
I was recently quoted in Success and sustainability in African family business on How We Made It In Africa. A wealth of opportunities exist on the African continent, and the time is definitely right for these opportunities to be realised and capitalised on.

I was recently quoted in Success and sustainability in African family business on How We Made It In Africa. A wealth of opportunities exist on the African continent, and the time is definitely right for these opportunities to be realised and capitalised on…


Small and micro enterprises in Africa are mostly family-run, and play an important role in employment creation and economic development – a growing trend not only in Africa, but in other developing economies around the world.


I’ve previously mentioned the complexity of balancing family dynamics with that of business objectives, and it’s important to note that many family-owned businesses in Africa face the same challenges as those in other parts of the world when it comes to formalising business structures, managing finances, and dealing with family conflicts.

The challenges endemic to the African continent

In addition to typical family business issues, business owners face the additional Africa-specific obstacles to success. It’s our belief that Africa-based business owners need to be aware of the challenges facing their businesses in order to enjoy future success.


In Africa, family-run businesses tend to be less formal or institutionalised than their counterparts in developed economies. They sometimes lack the history, expertise, and government support found in other parts of the world and as a result, these businesses have a tendency to be short-lived and rarely pass to a second generation of owners.

The rocky terrain of business in Africa

Africa-specific obstacles can be external, related to governance of a country, corruption, and the economic environment. Obstacles can also be internal, related to family relationships and family dynamics.


The economic environment can play a major role in the success or failure of a family business. Succession continues to be a major concern for the survival of family businesses. Businesses want to be able to plan ahead, with clearly defined policies for the foreseeable future.

When this doesn’t happen, succession planning is made all the more challenging.


Start-up family businesses tend to be short-sighted when it comes to corporate governance – the owners have started the business and intend to stay at the helm or eventually pass control to their children. This isn’t always the best solution for the continued success of the business as second generation owners may lack the skill, ability, or interest to take on their parents’ projects…

A way forward for family-owned businesses

To ensure a family business has the best chances of survival, business owners need to evaluate the true state of their environment, the position of their business, and their plan for the future, taking the following into account:


  • Implementing formal governance and reporting structures
  • A formalised talent management process
  • Developing a succession plan.

Given the important role that family-run companies in Africa play in employment creation and economic development, it’s essential that more structure and formal processes are put into place. The facilitation of proper succession and growth in these businesses will ensure that the doors of opportunity in Africa are opened not only to foreign investors, but to the continent’s population as well.
For the full article, read Success and sustainability in African family business on How We Made It In Africa.

Craig Steven-Jennings

Craig Steven-Jennings
After working with family businesses in various industries for 12 years and with the understanding of key drivers such as growth, risk and ownership control, I am delighted to share my experiences and knowledge with you.
 

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