Across the world, businesses are established with the hope of lasting for generations. Yet, while companies such as General Electric in the United States and First Bank of Nigeria have survived for well over a century, thousands of African businesses disappear almost as quickly as they emerge.
The difference is not always access to capital, technology or markets. More often than not, it is the absence of succession planning.
The Corporate Affairs Commission (CAC) has consistently highlighted the alarming mortality rate of businesses in Nigeria, with an estimated 80 percent of newly registered businesses failing within their first twenty-four months. In recent times, the Commission also embarked on a sanitisation of the Companies Register by removing inactive and non-compliant companies. Behind these statistics are businesses that never prepared for life beyond their founders.
Many African enterprises are built around strong personalities rather than enduring institutions. The founder is the chief executive, chief marketer, chief financier and chief decision-maker. Customers buy because of the individual, not the brand.
Suppliers trust the owner, not the organisation. When that individual retires, becomes incapacitated or passes on, the business often follows the same path.
