Why Nigerian Family Businesses Fail?

Family businesses are the backbone of Nigeria's economy, covering industries from manufacturing and finance to hospitality and retail. Some of the country's most successful businesses-Eleganza,

FCMB, Sheraton Hotels Lagos, and the former Diamond Bank-are or began as family-owned

1. Lack of Succession Planning Retirement

Just like Retirement, Many founders fail to prepare for leadership transition, leading to power struggles or leadership gaps when they step down or pass away. Without a clear succession plan, businesses face internal conflict and instability.

2. Mixing Family and Business Without Boundaries

When family disagreements spill into the business, it creates

dysfunction. Poor governance, nepotism, and emotional decision-making weaken operations, making it difficult for the business to scale beyond family interests.

3 Resistance to Change and Innovation

The SDGs Goal 9 focuses on Industry, Innovation AND Infrastructure. SDG Goal 9 is "Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation".

Many family-run businesses in Nigeria rely on outdated practices, resisting modern technology and market trends. This makes them vulnerable to competition, especially from younger, more agile businesses.

4. Financial Mismanagement

Without clear financial structures, businesses suffer from poor bookkeeping, misuse of company funds, and a lack of reinvestment in the business. When family members see the company as a personal ATM, sustainability is threatened.

5. Weak Corporate Governance

Solid Corporate Governance is built around Responsive, Consensus and Oriented Governance structures - like advisory boards, compliance policies, and operational frameworks which are often non-existent or poorly managed in Nigerian family businesses. Without proper oversight, businesses become unstable and unscalable.

Success in a Family Business ISN'T JUST ABOUT MAKING PROFITS TODAY-It’s about building a Legacy that thrives for generations

LET'S BUILD LASTING FAMILY LEGACIES TOGETHER.

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Would you want a thriving family business like Reliance, LVMH, or Sheraton? Strong governance and smart planning make all the difference! Let's help you build a lasting legacy.

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