Most business start small and are established by one person, the entrepreneur but why is it that the businesses stay small?
The dictionary definition of “Entrepreneurship” is the process of designing, launching and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs.
According to PricewaterhouseCoopers (PwC) only 12% businesses survive the third generation. The business structure by this time has become so complex that failure is inevitable. This number would be much lower for family run businesses in Pakistan. The economic pressure to share and feed increasing number of mouths, the burden of being fair to the family members, cultural bindings and absence of a business constitution ultimately lead to the demise of business.
Businesses have a life and they need fresh air and space just like human beings. This realization is ignored in majority of the local businesses and the enterprise and the entrepreneur both spiral down the slope into oblivion.
A family business will always remain a family business, unable to grow beyond a certain size, or to change, innovate and hence maintain itself over time. One major reason for that is the absolute dependence on the next generation of the family. If the next generation is better and more business savvy than the previous one, there is no problem, the business would continue until the next succession. But there is no guarantee that this will happen, or continue to happen, thus ensuring the continuity of business. An efficient business needs “Vision” and “Efficient Execution & Operations”. Both these requisites are, if available today, may not be their tomorrow. What is going to happen to the business then? How will the business survive and go forward?
Lahore is famous for its unique ethnic cuisine. It all started in the old Lahore. The ones that have survived, thrived and grown in size over the years are the ones which have moved out of the inner-city solo outlets and branched out in the rest of Lahore. The ones that do not do this will eventually and unfortunately fade out with time. Time and increasing number of mouths to feed will divert and divide the focus one day and lead to their demise.
Business beyond a size needs fresh air like human being to survive and flourish.
The success recipe of transforming “a small business” into a great, budding and prosperous one is to know the right moment to “letting go”. “Size” has its own dynamics and takes priority after success. No matter how successful a business becomes, stagnation will kill it. Being “dynamic” is often the “success factor” in the life of businesses.
This cognizance of “Letting go” is rare indeed and requires a visionary that “me & my family members” can only do so much i.e. bring it to this level only. Anywhere beyond this will require skills, expertise knowledge which is not available within the family. What is required is the vision and wisdom of the likes of John S. Pemberton or Steve Jobs who let go and turned Coca Cola and iPhone into global mega brands.
Both these skills are readily available, all it requires is the wisdom of employing, nurturing, encouraging the “right” professionals.
About the Author:
Mr Rizwan Ghani’s career spans over 35 years in managerial and leadership roles with one of the world’s leading Packaging Group. His passion is “Continuous Improvement and Change”. After his retirement he was associated with an international recruiting company for two years and currently handles B2B business for an FMCG. Hands on, widely travelled, he also teaches at a local university
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