Building a successful business is not just about creating short-term financial gains; it is also about creating a business that can outlast the founder and continue to create wealth for generations to come. That being the case, African entrepreneurs should think about building multi-generational businesses that can grow beyond themselves and serve many households, unlocking long-term wealth creation potential.
There is a lot to say for brands that have proven their resilience and endurance by standing the test of time. Tales have been told of companies that have existed for more than a century, though locally most companies we can reference are currently in their 3rd generation. These companies have been able to weather some of the greatest storms and catastrophes in history while still managing to dominate the highest-ranking lists today. It is therefore fair to say that this poses a challenge to the African entrepreneur whose ambition is to build an empire that will outlast generations beyond their existence.
8 steps to establishing a multi-genrational business
Here are 8 steps that can help you create a solid foundation for a multi – generational business.
- Processes
The importance of processes cannot be overstated when it comes to building a legacy business. A company must have standard procedures that deliver quality products or services and have the ability to document those processes; this is where digitization and automation come in. They help to efficiently capture information along the processes, enhance compliance, and generate institutional knowledge, which can help to maintain consistent quality in production and service.
More than this, with digitization and automation, the reports generated are easily available, allowing the company to interrogate and review specific sections of the processes that need attention to keep the company on a sustainable path. This makes the processes predictable, trainable, and repeatable, which is critical for sustaining the business in the long term.
It is important to note that the personnel that use these systems and processes need proper training and mentoring to understand the value and objective of these processes, moving the business from one set of leaders to the next.
The CEO should be the primary visionary who directs the company, while a passionate team carries out the processes put in place. The CEO must also trust the team to embrace the vision and take it to the next level.
- The right mindset
In establishing a legacy business, the mindset of the entrepreneur should be unique, and will require tenacity and resilience, as starting and running a business can be exhausting.
Those who have successfully built multi-generational businesses have certain key characteristics that make their success possible.
Primarily, these individuals are resolute in their pursuit of their goals and are convinced that their chosen path is the right one. This determination is crucial, as building something from scratch is bound to be difficult and challenging. Even when things get tough, those with a strong mindset remain steadfast and committed to achieving their vision.
In addition to this, it is important for multi-generational business owners to surround themselves with like-minded individuals who can provide support and encouragement during difficult times. These people should be those who can understand the complexities of running a business and can offer both advice and motivation.
By building a community of supportive peers, business owners can ensure that they are given the necessary push to keep moving towards their goals.
Moreover, building a multi-generational business lies in changing our mindset from content consumers to content creators.
- Telling your story
Contrary to the opinion of many Kenyans, storytelling is a crucial component of passing down knowledge and experience to the next generation.
Sharing the successes and failures of a business can offer a wealth of insights and lessons that can be incredibly valuable for future generations.
However, it is important that these stories be told truthfully and without censoring the difficulties or setbacks that were faced along the way. This is also a technique to getting the next generation of leaders involved early in the business, which in turn will be beneficial in developing an interest in the environment and the process of generating income.
- Generational succession
When handing the business to the next generation, it is critical to make the distinction that it is not only about building a family business, as there are many examples of businesses being handed over from one generation to the next or sold to someone outside of the family.
In addition, the kind of value can also change down the line, such as when passing from professional services to property.
Succession requires significant effort to create sustainable value within the organization. Moreover, potential buyers need to see the value in investing in the business, which can be achieved by having robust systems, processes, and a proven record of accomplishment.
Taking care to document and show the quality of the product or service, market experience, and track record can make a business an attractive investment.
- De-linking from the business
Building a multi-generational business requires a mental shift that delinks oneself from the business. This means recognising that the business is a separate entity from the founders themselves.
The first step to achieving this is to appreciate that, legally; governments see businesses and their owners as two separate entities.
It is also crucial to understand that business failures or successes are not personal reflections on the founders themselves.
Putting advisory boards or even boards of directors in place to offer guidance and accountability will not only help build a strong foundation but also create a sense of accountability within these structures that allows for the necessary separation between the business owner and their business.
It helps the business develop its own life, allowing it to generate its own income and be rated for its own merit.
- Transparency and compliance
Transparency and compliance are also fundamental factors in building a successful legacy company.Entrepreneurs need to be accountable for the systems they set for themselves, including rules and regulations.
Compliance helps to instill a level of trust within the company and with external stakeholders.
- Innovation and relevance
The idea behind innovation is not only to remain relevant today but also to ensure that what you serve your customers is also relevant in the future.
To achieve this, it is essential to think strategically and stay ahead of the competition. To keep your business prosperous, it is necessary to understand the markets you serve and continually adapt to market changes.
- Think Big
Another way to build a multi-generational business is to think big.
This will force the entrepreneur to create a plan that is global, which requires long-term planning and putting structures in place that build your foundation.
Thinking beyond your immediate geographical borders and personal finite capacity encourages you to seek help, support, and ideas from others.
In conclusion, building a multi-generational business is a vital step for African entrepreneurs who seek to establish a legacy that will benefit future generations. It requires a strong mindset, effective processes, and transparency, compliance and accountability, among other crucial factors. By investing in technology, telling stories, and delinking from the business, entrepreneurs can create a business that can outlast them and continue to create wealth for generations to come. Ultimately, the key to building a successful legacy business is to think big, be innovative, and remain relevant in an ever-changing market. By doing so, entrepreneurs can realize their dreams of establishing an empire that will outlast time and create prosperity for generations. The journey may be arduous, but the rewards are endless for those who persist.