As the end of your university degree ends, a critical but nerve-inducing question looms over every graduate-to-be’s mind: where to next? And usually this question is filled with conversations about the hopes of entering (or already having succeeded in entering) an astute company that has been at the helm for decades or more.
But as a black young graduate, you may be met with an answer unique or unusual to you: “I’m off to join the family business”. Family-run businesses have always played an integral part of not only the economy, but to the dignity of a home.
Below, Keorapetse Chakela, a director of Le Looks & Hair Beauty – a notable black family-run beauty business with branches in premium malls such as Sandton City, East gate Mall and many more – addresses the makings of successful black family business.
Article Written By: Keorapetse Chakela
Having been part of running a family business for years now, it’s critical for one to note that it’s no straight-forward process, and at most times can pose to be rather challenging. Being provided with the opportunity to write this article and impart this knowledge, has been a challenging in and of itself – but quite exciting too!
The company was initially registered as a Close Corporation at the time; the benefits of registering as a Close Corporation were the advantages of limited liability, meaning that you would not be personally liable for the debt of the corporation. At the time, we also had no intention of taking the business public, thus we felt that a CC was the best option. Reflecting on these decisions, it is important to highlight that a business is like a baby or a child, so when you start your business, think about the journey that you would like it to take, as well as what it may look like as a fully functioning entity – one that will potentially impact the world – and therefore it is critical to make a decision on a Private Company or Partnership that is aligned with your current and future ambitions.
Recently, we transitioned from a Close Corporation to a Proprietary Limited (Pty Ltd). I would advise taking this route when registering a family-owned business within the context of today’s working environment, and the mentalities we have towards purpose. As I mentioned at the beginning of this article, a family-owned business is not straightforward, and it is essential for every member involved in the business to feel that they are being rewarded – particularly since there are often no clear career development paths in a family business. A Pty Ltd therefore allows for shareholding structures to take shape, and those involved can feel a sense of ownership, pride and commitment towards the said business. However, it is of utmost importance that shareholding equates to an operational contribution within the business in order to avoid conflict around value, especially within the emotionally-charged environment of working with family members.
The highlighting of the “emotionally charged environment” focuses our attention towards communication and boundaries. I would be lying to everyone reading this article if I were to say that forming clear lines of communication and boundaries must mimic or reflect any other corporate or business environment where you are independent and autonomous of any influence. Family is influential: the role of your Mother, Father, Brother or Sister holds more emotional historical value, and in some cases authority, than any formal business role can match, and rightly so. Consequently, I would advise that when starting a family business or being involved in one, it is important to understand and respect each other’s strengths and weaknesses and most importantly, to set boundaries with regard to TIME. We set rules in our family that there will be no business talk after 5pm; anything after 5pm being family time or personal time, and therefore must be respected as such.
Working together every day in a high pressure entrepreneurial environment where getting paid a salary at the end of the month is not always something you can guarantee or where your private life is not so private, can easily begin to erode inter personal relationships with your family, and it is therefore mission critical to preserve this relationship with clear boundaries and monthly meetings where work grievances can be discussed in a safe and collective forum.
Truthfully speaking, I never had any dream or ambition of being involved in the family business – but it is the greatest thing that ever happened to me, and this is why I think succession planning or continuity within a family business is incredibly important to maintain the essence of what makes that business unique. As black people, we are focused on this mission of building wealth in order to attain economic freedom. I am of the firm belief that it is within these black family-owned businesses that we have the opportunity to define what a black business’ wealth looks like, sounds like and feels like. It will not be perfect and will often fall short in comparison to our counterparts, but why are we comparing ourselves, when our journey is unique! Patience and self-reflection is necessary to realize that in order to build an ever-evolving generational black family-owned business, we must be the pioneers. Mistakes will be made, and at times we will feel inadequate in the face of 100-year generational wealth, but where do we expect it to start? I advocate for young people to see that a family supermarket, family salon etc., is not a hindrance to their growth, but an opportunity to become a contributor towards a black lineage that can change the narrative of what black business should look like in Africa.
I believe I have highlighted the complexities of running a family-owned business. I have often seen many people treat the family business as a personal bank account or playground, and disrespecting the core values of running a successful business. Ensure that you have clear management structures within the company, and afford those managers your trust because we can often become very attached to our businesses, which can become detrimental. Nepotism in a family-owned business is real, so make sure that if you have a family member as a management executive, that they are the most qualified person for that role because sympathy and business do not go together.
Lastly, I think the most important value to emphasize on this journey is that nobody is entitled to a great salary just because you are family or the owner. When I started working for the family business, I started right at the bottom by counting stock and making deliveries to the stores, earning R3500-R5000 per month. I had a tertiary qualification, international work experience, and I would like to think that I am quite bright – but what I didn’t have is the blood, sweat and tears that had been etched into this business by my mother… what I didn’t have was the respect and recognition of all the employees who had been with the company for 10,11,12 years and had walked the journey of building this business. My point is that when determining salaries and how you spend revenue, make sure that every cent is earned, whether family or not, because those values and attitudes are what will sustain a family-owned business through the triumphs and successes of the business journey. At Le Looks, the whole company calls my mom, Mama and my dad, Bra Joe.
A family business is about family. We are all a family and we all make a significant impact in each other’s lives and nobody understands that better than me because I was raised in this business and have known many of my brothers and sisters who are employees in this business since I was a young teenager. Running or starting a family-owned business is about love, and that is the greatest reward over and above the financial impact you can contribute towards your family and those you choose to empower in an environment that allows them to be unapologetically African.