Entrepreneurship. It’s a buzzword today and it was a buzzword yesterday. It sounds fancy because it is a big, long word and one that gets thrown around a lot. But essentially, anyone in the process of designing, launching and running a new business is an entrepreneur. And while everyone that thinks of themselves as such likes to dream and wonder about the success stories of people that have gone on to make millions and windows after starting off in garages and basements, most entrepreneurs operate small, subsistence-level operations and will continue to for the course of the business venture.
Just think about it. Most businesses start small and are established by one person. But why is it that these businesses stay small? Why is it that you see all these quirky new ideas by excited new entrepreneurs rise and then make a resounding crash? Offices and outlets close down left, right and center. But most importantly, what is it that makes successful entrepreneurial ventures that make it big tick?
According to PricewaterhouseCoopers (PwC), barely 12% of businesses survive the third generation. The business structure by this time has usually 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 an increasing number of mouths, the burden of being fair to family members, cultural bindings and the absence of a business constitution ultimately lead to the demise of business.
Businesses need to be treated like living beings. You can’t put too much pressure on them or not give them enough attention. They need fresh air and space to breathe. This realization is ignored in the vast majority of the local businesses and the enterprise and the entrepreneur manages to spiral down a slippery 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 will not just continue until the next succession, but may even grow.
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’ ‘. Where it becomes tricky is that both of these requisites may be available today, and then not be available the next day. In that case, what happens to the business? Where does it go and what is in its future?
Take Lahore’s old food markets. The city is famous for being a hotbed of ethnic cuisines, and despite their small often shabby set-ups, many food establishments are not only long running, but also serious cash cows. But the ones that have been most successful are those that have moved outside of the inner city are where they first gained fame and customers, and gone to more posh areas with nicer dining experiences. The iconic Muhammadi Nihari comes to mind, which still has its original shop in Mozzang, but can be found all over the city now with branches in Gulberg, DHA, Model Town and all other major areas of the city. The restaurants that do not branch out like this will eventually and unfortunately fade out with time.
The key ingredient in transforming “a small business” into a great, budding and prosperous one then is to know when it is time to let 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, but recognising when it is time to let go is often rarer than dynamism.
This cognizance requires a visionary who recognises limitation, including saying what exactly it is that they can actually do to bring it to this level only. Anywhere beyond this will require skills, expertise and knowledge which is not available within family-run businesses. 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, and encouraging the right professionals.