Despite the significant contribution of family businesses to the global economy, the future of family-owned enterprises still remains uncertain due to various factors such as succession planning, globalisation, and technological advancements. 

Clifford Egbomeade, a public relations and communications adviser at ID Africa who stated this said:” Family-owned businesses contribute over 70% to the global  Gross Domestic Product, GDP, accounting for more than 30% of companies with sales over $1 billion.

These businesses, passed down from one generation to another, have created jobs, contributed to local communities, and stimulated economic growth.”

Continuing, he said:” However, despite the significant contribution of family businesses to the global economy, the future of family-owned businesses is still uncertain due to various factors such as succession planning, globalisation, and technological advancements.

“According to a 2021 global family business survey by PwC, 41% of family businesses in Nigeria expect a decline in sales growth. In fact, the survey shows that 60% of family-owned businesses do not have strong digital capabilities, while more than half reported that they have no governance structures and policies.”

Commenting on succession plan of family business, Egbomeade said:”

Succession planning, one of the main challenges facing family-owned businesses, involves preparing for the transfer of ownership and management of a business from one generation to the next. In Nigeria, only one out of every four family businesses has a robust, documented, and communicated succession plan in place. This deficiency in planning can lead to disputes, family conflicts, and ultimately the failure of the business.

“To ensure the longevity of a family-owned business, it is crucial to have a well-defined succession plan. This plan will help identify potential successors, outline their roles and responsibilities, and establish a clear timeline for the transition of ownership and management. A successful succession plan also involves developing the necessary skills, knowledge, and competency of the successor and providing them with the necessary resources to manage the business effectively.”

He further noted that the rise of globalisation has also impacted family-owned businesses. “Globalisation has led to increased competition, changing consumer behaviour, and the need to adapt to different cultures and regulations. To stay competitive, it is critical for family-owned businesses to embrace globalisation and expand their operations beyond local markets. Although expanding into new markets can be challenging, family-owned businesses can form strategic partnerships, hire local talent, and invest in research and development to create products and services that meet the needs of the local market. 

‘‘Family businesses in Nigeria are now placing high priority on expanding their businesses to diversify their revenue sources and mitigate risks, and the African Continental Free Trade Area (AfCFTA) presents opportunities for businesses to capitalise on. It is imperative for Nigerian family businesses to revamp their business processes by exploring innovative ways to leverage their domestic human capital and offer global services” he added