It is not only life expectancy that is low in under-developed and developing nations. Business life expectancy is also low, sadly.
Longevity in business seems to be difficult for indigenous companies in Ghana. There are hundreds of foreign companies that have existed for centuries. Over this period these companies have gone ahead to improve on their services and have evolved over time.
When companies exist for a long time they build legacies. Countries have become associated with certain brands. Germany readily comes to mind when Mercedes Benz is mentioned. Japan has been well known for the production of cars. The zaibatsu (business conglomerates), have been active in the automobile industry; Isuzu, Honda, Mitsubishi readily come to mind. People all over the world travel to Japan to buy cars. Ordinarily, some people will not have travelled to Japan had it not been for their automobile industry. The thousands of visits to that country also make the country benefit by way of foreign exchange.
The number of startups has increased in recent times. This is evident in the number of young people who have started businesses and are being celebrated because of their success. Our concern must be how these businesses will grow and even outlive generations.
People enjoy being the boss. Business owners are reluctant to open up their business for others to come in with capital and expertise. Just like the child who clings to her teddy bear and won’t allow people to even touch it, so do people behave when they set up their own enterprises. This is exacerbated by their staff.
Conflicts have emerged out of businesses where the owner is related with some workers. Lack of trust, thievery, and lack of respect for laid down procedure, among other things, characterize their working relationship. Familiarity with the owner, because he might be the senior brother or uncle, makes the succession plan difficult. In certain cases nephews and nieces or even senior siblings think they have the right to take over from the owner in the event of death. They do everything within their means to ward other people off the business and thereby impede the growth of the business. Sometimes, the people who are warded off may be potential strategic partners who otherwise could help the business grow.
Basic book keeping, accounting, finance and corporate governance do not feature in the scheme of things when people are setting up businesses locally. Entrepreneurs invest huge sums of money but yet are unwilling to spend little on an accountant or a consultant to advise them on business plans, cash management and accountancy and so on. They will rather spend it on luxurious cars, clothes and other non-essentials in their business.
There are numerous reasons why businesses do not live long; but there is a way out. Well established brands that the world has come to know predate our grandparents. Shell, Levi Strauss and Co, Twinings, Peugeot and the rest have all been in existence since the eighteenth century.
These companies did and continue to do something right. Their companies were founded on sound business principles. Having an idea is not enough. Being able to think is not the only thing you need to succeed as an entrepreneur. A survey conducted in the United Kingdom among people of different ethnic groups revealed that people born in West Africa, Horn of Africa and Southern Africa are more likely to be thinkers than doers. I am not in any way denigrating blacks, I’m a believer in our capacity as a people but we ought to know our weaknesses and find lasting solutions to them.
It is a well-established fact that businesses do well when others are allowed to own part of the firm and bring not only capital but technical expertise as well. Thankfully the alternative stock market in Ghana has been established for such a purpose. The market is solely for small firms and startups. It is not difficult to list on the market and small firms ought to take advantage. The benefits they seek to gain are numerous including a high possibility of longevity because of the good corporate governance principles they shall be held to.
The Twining’s tea story tells us that a family can own a business for it to grow and become a global brand. Thomas Twining’s quest to serve tea to the British in 1777 lives on. He together with his family has built a brand that has lasted two hundred and thirty eight years. Perhaps, persons who find themselves in shops owned by their uncles, siblings, parents and the like can be more forward looking by ensuring they play a part in building a business that will serve generations yet unborn.
It is important also for businesses especially startups to have structures in place for Accounting and Finance. These are not only necessary for the long term survival of an enterprise but needful when it comes to building resilient enterprises. The structures will help in drawing business plans, keeping of books, taxation and help in attracting investors. Warren Buffet once said “You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business.”
Leave the Accounting and Finance aspect of your business to those with the requisite training and your business will be on the highway of longevity.
Today, there are a lot of success stories in our country with regards to individual startups. Young people are finding innovative ways to find solutions to the myriad of problems we face through their businesses.
I dare ask, will a President of Ghana in the next hundred years still be wearing a Horseman shoe to address the nation on the floor of parliament? Will Koko King continue serving us Koko in a neatly packed cup away from well fed houseflies and even be served on international airlines? How many of Osei Kwame’s and Kwesi Twum’s among media organizations will still be operating?
The answer must be in the affirmative. Think about the number of jobs that will be lost and its attendant hardship on families when these businesses collapse.
We can build a prosperous nation when our businesses live long. India has emerged out of their socio-cultural limitations to be an economic giant today: a predominantly Hindu nation where they believe in accepting your lot in the world where you are. This kind of attitude cannot make ones’ business grow and survive, that is, if he attempts to establish one. Today, India is an economic giant with huge prospects for further advancement.
In spite of whatever socio-cultural flaws we face, we can come out and build great business empires that will survive for a long while.
Ted Turner, founder of CNN said, “We won’t be signing-off until the world ends. We will be on and cover the end of the world, live; that will be our last event and we will be playing ‘Nearer, my God to thee and we sign off!”
Will your business live to see the end of the world?
Source: Kofi Kusi Dapaah
You can contact me on:
Facebook: Kofi Kusi Dapaah
LinkedIn: Kofi Kusi Dapaah