Family structures in business — Lionesses of Africa

by Tsitsi Mutendi

This week, we continue on our journey with Ms. Olivia Simbajena. Ms. Simbajena is a businesswoman whose business falls under the category of SME and MME. Hers also falls under the category of Family Business. As we have defined before, a Family Business is a business started by an individual for the benefit of his or her family and is then run by the individual to serve the interests of their communities as well as those of their family. The Family Business’s main characteristics is that a family owns the majority shareholding of the business. However, from the characters and their situations, although fictional, we are starting to see that there are dynamic intricacies that affect Family Businesses. Laying down a foundation by introducing our fictional business owners will help to establish context when we go in-depth and unpack more problems and solutions for Family Businesses.

In our last article, we met our trader turned enterprise builder, Ms. Simbajena. Ms. Simbajena is one of the powerhouses in the SME and MME sector. Ms. Simbajena is a Trader who managed to open a store, which then became a chain of stores and diversified into manufacturing. According to research done by the UN and World Bank, women play a crucial role in trade in Africa and will be essential to Africa’s success in exploiting its trade potential. Daily, millions of women in Africa are engaged in one form of trade or another, either within their countries or across national borders. They buy and sell everything, from agricultural produce to manufactured products. It is mostly women who conduct cross-border trade, delivering goods and services, reports the World Bank. They also run the majority of agricultural small landholdings. Indeed, women traders’ contribution to national economies has become essential in boosting trade in Africa. It is well known that most women in Africa start a business out of necessity, and that necessity is to feed their family. Women Business owners are the majority of many Family Business Owners. The biggest obstacle is that they do not see their business as a business that can become bigger than just feeding their family, even though they contribute to the eco-system of many economies in a considerable way.

Ms. Olivia Simbajena has thrived in her business life. She has managed to move from barely surviving to a thriving well-known businesswoman. In the meantime, her personal life has also flourished. Her daughter is doing exceptionally well in school, and Ms. Simbajena has found love, gotten married, and has three sons. The marriage is blissful at the beginning. Her husband, Tonderai, helps her with her business by giving her advice and giving her tips on financial literacy. When they marry, he works in the bank as a bank manager. And after a few years, he decides to join his wife as an entrepreneur and opens a car dealership. Tonderai is now only helpful where he can be, but he is busy in his own business and is now treating her business as a hobby. Although it is evident on the financial sheets that her business is visibly bringing in more money, he owes her a lot of money for a haphazard investment she made to “support his business.” After a few years, Tonderai starts getting frustrated with his lack of success in business. He also starts seeing Ms. Simbajena’s daughter as a threat to himself and his sons and is now insisting that her daughter go to boarding school or stay with Ms. Simbajena’s mother. He only wants “His” children in “his” home. Although this is the home she built before she was married. This starts causing conflict within the marital home. Ms. Simbajena has been living with her mother. The thought of moving her mother and daughter out of their home is distressing because her mother is getting frail, and she is now insisting on staying in her rural home.

Family Businesses are wrought with many dynamics and unforeseen circumstances that can spillover from family to business and vice versa. All founders of family businesses should be prudent when structuring their personal relationships and their business relationships. Primarily because an upset in one or the other can leave a family financially stranded and business less or family rich and business poor.

Structuring a family and business relationship is very hard. Especially in the dynamics of the traditional African family structure. It is complex, and some of these complexities and nuances must be considered when building and structuring the family business structure as much as its governance. So the most important place to start would be the family structure and the family governance, and it’s relation to the business. Then from that vantage point, a clear business family relationship can be structured. Each case is unique in context and relationship and must be handled as such. It is crucial for a family business to engage a professional family business advisor to assist in those processes as it can be a lengthy process that needs objectivity and an outsider to manage the complexity of the family dynamic.

In this case, it would be necessary for Ms. Simbajena to have a family meeting with interested parties and create a family council. It would have been better if some structuring had been done before her marriage. Because the marriage itself brings into the mix its own complexities in terms of ownership and business shareholding. A prenuptial agreement would have been ideal in such a situation. As well as communication as to shareholding in the business. Who gets shares and when and why? Does her husband get shares on marriage? Do only their children get shares? What percentage of shares does Ms. Simbajena hold, and how many will she give to whom? Are there other partners in the business? Does Tonderai have the option to buy-in and legitimately own shares? Ownership must be clear as well as who will have what roles in the business. Tonderai being the head of his home, does not equate to him being the head of the Family Business that Ms. Simbajena built, and it does not equate to him having any authority in the operations of the business. As her spouse, he, however, does get benefits from the business, and if he is made a shareholder, he does have a limited say in what occurs at the business of the structure of his shareholding permits this.

This and a myriad of other issues can only be established when there is appropriate structuring in the family and the business relationship and governance structures. We will talk further on Family Business and Governance next week.

Tsitsi Mutendi is a Succession and Estate Planning Expert specializing in SME, MME, and Family Business Services. She writes in her Personal and Professional Capacity. Comments and views: or

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