A Pan-African corporate specialist has said family-owned firms could best handle expansions and transition by hiring professionals to handle all their commercial operations.
Advantech Consulting Managing Director Joseph Waruingi said family conflicts and collapse of once successful businesses are due to the lack of management processes and systems. This, he added, create loopholes for theft and wastage in the firms.
“The best way to prepare for expansion is to engage professionals who will set up management structures and help you understand future prospects of your line of business. Otherwise, you risk losing money when you expand blindly while exposing the business to further family feuds,” he said.
The former PWC partner, whose firm has advised state and private sector agencies in 23 African countries in the past 14 years, said ignorance of professional advice has made companies to lose opportunities and expose their firms to perpetual fraud that destroy their public image.
Mr Waruingi said even state agencies could best serve interests of the country if professionals were hired with politicians keeping off operations of the agencies.
Kenya has witnessed once thriving corporate entities run down to near ruin while state agencies such as Uchumi are struggling to stay afloat due to mismanagement.
The corporate specialist said increased competition especially from multinationals must compel Kenyan family-owned businesses to engage professionals to help them check on risk and handle various processes via laid down structures.
“The family-owned business owner must cede some level of control to managers heading the human resource, audit, risk supervision and the marketing departments among others. The business owner will then retain his role as the vision bearer of the company with access to expert advice,” he said.