Factors Affecting Business Longevity and Generational Wealth in Indigenous Zambian Families: Case Study of SMES in Lusaka District

Abstract

This study investigates the factors within the upbringing of indigenous Zambians that contribute to low business longevity and the limited transfer of businesses across generations. Given that over 95% of Zambian enterprises are small and medium-sized enterprises (SMEs), contributing 70% of the GDP and employing 88% of the labor force, their sustainability is vital for national economic growth. However, more than 75% of these businesses fail to survive beyond a decade. Family businesses, among the oldest commercial forms, are particularly affected, struggling to endure and accumulate generational wealth. The research aims to identify the reasons why family-owned SMEs in Lusaka District find it difficult to achieve longevity and intergenerational success. Using an interpretivist philosophy and a qualitative design, the study targeted ten purposively selected indigenous family-owned SMEs in Lusaka. Data were collected through questionnaires administered to business owners and managers, and supported by secondary sources including business surveys, journal articles, and government publications. The data were analyzed thematically to extract recurring patterns and explanations. Findings reveal that indigenous family businesses in Lusaka face structural limitations in their pursuit of generational wealth, largely stemming from persistent poverty, inadequate quality of life, weak legacy structures, and suboptimal business environments. Business owners identified three critical factors hindering longevity: lack of early grooming and involvement of heirs, insufficient training and education, and absence of formal succession planning. To promote sustainable business longevity and successful generational wealth transfer, the study recommends that family businesses begin grooming successors from birth or early in the business lifecycle, ensure continuous education and managerial training, and institutionalize structured succession planning. These measures aim to prevent mismanagement and vision loss often observed when businesses transition to new generations. The research underscores the importance of parent-to-child assimilation into business operations as a crucial mechanism for long-term survival. Recommendations target both predecessors and successors within family businesses, advocating for the creation of an environment that supports legacy-building through poverty reduction, enhanced quality of life, and a commitment to adding societal value. Only through collaborative effort can family SMEs lay the foundation for multi-generational success.