‘Professionalising’ the family business
There is nothing quite like the entrepreneurial spirit that sparks the launch – and spurs the growth – of a family business. The combination of performance, profit, and family pride can be a powerful force in driving founders and owners to build great businesses and valued brands. Family businesses like every other business in Nigeria have their peculiarities and challenges. While family businesses have the unique characteristics of a family, they, like other companies are often in search of financing to propel growth. As a family grows and changes, the family business must also evolve to accommodate changing family dynamics.
The future of the family members, maintaining the independent nature of the family business and the preservation of family unity depends on the growth of the family business and its capacity to generate sufficient profit for all its members.
Aware of these challenges faced by family businesses in Nigeria, we at KPMG wanted to create a way to share experiences and start a conversation around family business. We want to share our insight, experience, research, and our point of view, and we want to talk about what matters to you in the day-to-day running of your business.
In this very first edition of the Nigerian Family Business Survey Report, we have insights from family businesses across Nigeria and throughout the document we draw comparisons between the Nigerian, African and European family business community.
As our survey report reveals, family businesses in Nigeria have demonstrated strong resilience to external pressures and challenges in the last one year and are optimistic about the future. To grow their business, company leaders are investing in two areas: core business and innovation/new technology. An overwhelming number of respondents (98%) validate the fact that having good governance structures and processes is a key driver for the success of their business. Our respondents have highlighted limited access to finance (47%), fluctuating exchange rate (42%), and declining profitability (27%) as the top three concerns for family businesses in Nigeria. Limited access to finance continues to be a key challenge for businesses in Nigeria.
Of course, every family business is unique; but the insights shared here can go a long way towards helping any family business maximize value and position the company to thrive and endure across generations. We hope these results and observations will help provide valuable insights into the growth and survival of family businesses across Nigeria.
For us at KPMG, we remain committed to providing a platform for articulating the critical issues and concerns faced by family businesses and supporting in their quest for growth and sustainability.