Why Many Family Businesses Don’t Stand the Test of Time — And How We Can Change That

This past weekend, I had a deep and thought-provoking conversation with a colleague. Our discussion centered on why so few family businesses survive from one generation to the next — especially in African countries.

It began with the topic of brain drain: the continuous migration of professionals in search of greener pastures abroad. This is a crisis that many African governments have yet to seriously address. My colleague explained how this loss of talent stalls economic growth — not just because skilled professionals leave, but because it takes a significant amount of time and resources to train new ones to fill their place. Each wave of migration creates a reset button, constantly pulling us back to the beginning, leaving us in a cycle of starting over.

We then brought the discussion closer to home — literally — by considering what happens at the family level.

Imagine a businessman who works hard and builds something significant. He invests heavily in educating his children but never brings them into the business, or worse, warns them against it. These children, in turn, grow up detached from the family legacy and go on to start new, unrelated ventures. The original business dies with its founder, and the cycle of starting over begins again.

This is a pattern we see far too often: legacy businesses die out because continuity is not built into the family structure. A simple change — such as involving children early in the business and gradually handing them responsibility — could make a world of difference.

At the national level, the solution might be to create better conditions and welfare systems to retain professionals, allowing economies to grow through accumulated experience and continuity. At the family level, the principle is the same: continuity builds sustainability.

We must acknowledge that time spent doing the same thing, improving processes, and passing on accumulated knowledge makes any business more profitable and resilient in the long run.

Why Family Businesses Fail to Last

There are several root causes that explain why many family businesses collapse:

1. Lack of Vision Sharing: Often, the founder never communicates the long-term vision of the business with their family members. This lack of clarity makes it difficult for successors to carry the torch.
2. Limited Involvement: Children or family members are not integrated into the business early enough to understand its dynamics, challenges, and opportunities. Without involvement, there’s no ownership.
3. Fear-Based Warnings: Some founders scare their children away from the business, constantly highlighting its hardships instead of its potential.
4. Failure to Transfer Skills: In many cultures, traditional occupations were passed down directly — for example, fathers took their sons hunting, teaching them everything they knew. This form of apprenticeship ensured skills were preserved and improved over generations. Today, we often fail to transfer business skills in the same intentional way.
5. Romanticizing New Beginnings: There’s a misplaced belief that starting something new is always better than building on what exists. While innovation is valuable, discarding solid foundations simply because they’re old robs us of compounded success.

Conclusion: The Power of Continuity

If we want to see lasting businesses, sustainable economies, and generational wealth, we must embrace the power of continuity. Whether at the family level or national level, it is not enough to start; we must also plan for succession, invest in knowledge transfer, and keep building.

We don’t always need to start afresh — sometimes the key to growth is sticking with what works and making it better.

About the author

Dr. Jjuuko Derrick, is a pharmacist with a keen business acumen. Having dedicated much of his career to engaging with business owners and employees, he brings a unique blend of pharmaceutical expertise and business insight to the table. As an entrepreneur himself, he is passionately committed to leveraging his technical skills and entrepreneurial experience to foster the growth and development of multiple businesses. Driven by a mission to make a meaningful contribution to the business landscape, he stands ready to empower entrepreneurs with the knowledge and tools they need to thrive.