Entrepreneurship as a tool for transgenerational wealth.pdf

Business, Entrepreneurship, Family Operated Business, Dangote, Transgenerational wealth, Execution, Strategy, Wealth creation, Vitafoam, Ola Ogunfeyitimi

1. ENTREPRENEURSHIP: TOOL FOR
ACHIEVING TRANSGENERATIONAL
WEALTH
Ola OgunfeyitimiOla Ogunfeyitimi

2. ENTREPRENEURSHIP
Entrepreneurship is more than
simply starting a business.
It is a process through which
individuals identify opportunities,
allocate resources, and create
value.
This creation of value is often
through the identification of
unmet needs or through the
identification of opportunities for
change.

3. oA person who undertakes the riskof starting a
new business venture
oAn entrepreneur creates a firm, which
aggregates capital and labour in order to
produce goods or services for profit
oEntrepreneurship is an important driver of
economic growthand innovation
oEntrepreneurship is high-risk, but also can be
high-rewardas it serves to generate
economic wealth, growth, and innovation.

4. It is about execution without excuse….
Entrepreneurship answers WHO? WHAT? WHY? HOW? AND WHEN?
Entrepreneurship involves takings actions to create wealth
it involves solving problems that many struggle with each day
It involves bring people together in a way no one has ever done
It involves meetings needs and bridging gaps
It's not some idea that's stuck in your head.
Entrepreneurship is about execution of ideas.

5. Laden with the usual challenges and bottlenecks….
Fund Raising
Knowledge gap
Keeping up with
technology
People problem

6. Transgenerational wealth….
Generational wealth refers tofinancial assets passed from one
generation of a family to another. Those assets can include
cash, stocks, bonds, and other investments, as well as real
estate and family businesses
Generational wealth refers to the transfer of assets or
businesses, passed down from one generation to the next, which
safeguards the family’s future wealth
Creating generational wealth helps to break the cycle of
poverty.
Unfortunately, statistics indicate that it is highly likely for first
generation wealth to be significantly eroded by the time it is in
the hands of the third generation, a trend that will continue
into the future if we repeat the mistakes of the past

7. To create generational wealth, first step is
understanding that it’s a continuous process, not a
one-time achievement.
It requires dedication, discipline, and long-term
planning.
It requires good understanding of how money works
Take time to educate yourself about budgeting,
saving, investing, and other essential financial
concepts.
Building a lasting legacy of wealth isn’t easy. It
requires dogged commitment and hard work

8. Entrepreneurship as a Driver of
Wealth Creation:
Entrepreneurshipplays a crucial rolein wealth creation as it enables individuals to
create new businesses, generate income, and accumulate wealth.
Entrepreneurs identify unmet needs / gaps in the market, and developinnovative
products or servicesthat have the potential to disrupt industries and create value.
Successful entrepreneurs often reap substantial financial rewards, leading to an
increase in their personal wealth and transferrable wealth.
For instance, Jeff Bezos, the founder of Amazon, transformed the retailindustry
through his entrepreneurial vision, resulting in significant wealth accumulation.

9. Entrepreneurship and the Redistribution of wealth
•By creating job opportunities and generating economic growth, successful entrepreneurs
can helplift people out of poverty
•Entrepreneurs who establish manufacturing plants in local communities can provide
employment opportunities and stimulate local economies. ObajanaCement example
•Entrepreneurship offers individuals, the opportunity toachieve financial
independenceand accumulate personal wealth
•Successfulentrepreneurs who build thriving businessescan reap substantial financial
rewards and transfer wealth Unlike traditional employment, where income is often
limited by fixed salaries
•Access to Resources and support: Direct dependants of successful entrepreneurs enjoy
access to influential contacts, capital, Mentorship and numerous opportunities
•successful entrepreneurship often results in the accumulation of significant wealth,
which can be passed down to future generations. This ability to create generational
wealth sets entrepreneurship apart from traditional employment

11. Transgenerational wealth –Aliko Dangote story
•Son of a rich businessman, Al-Hassan Dantata
•The richest man in Africa
•Net worth of around $13.4 billion
•Built fortune from Dangote Cement
•Started as commodities seller; selling sugar,
salt, and flour
•Dangote cement alone paid 1trillion dividends
in 7yrs (2012-2019). Aliko has 78%
shareholding in Dangote cement .. (N780Bn
earned)
•Earned N292Bn as dividend from Dangote
cement in 2023
•The children are grown-ups and got the best
education abroad.
•All the children possesses a stake in the
business.

12. Beyond Dangote: 11 Nigerians earned N506Bn from
dividends in 2022
Source: https://nairametrics.com/2023/05/31/nigerian-billionaires-rake-in-
n506-billion-as-dividends-in-fy-2022/

13. https://www.ripplesnigeria.com/20-yrs-abiolas-43-children-still-fighting-fathers-assets/
•Entrepreneurship
•Transgenerational
wealth
•Lessons from
MKO

14. Family Owned Businesses (FOBs)
A bit complex with an overlap of Family and Business.
Family system is emotional and Business system is unemotional
Entry into a family is by birth and membership is permanent
Entry into business is based on experience, expertise and potential
Successful FOBs-Toyota, Coca-Cola, Unilever, Dangote etc
90% of US businesses and 30% of Fortune 500 firms started as FOBs
Survival rate (Transgenerational level) is rated poor at 33% surviving 1
st
to 2
nd
generation and less that half of the 33% make it to 3
rd
generation
According to Ahlstrom (1998:119) The first generation creates, the 2
nd
inherits
and the 3
rd
destroys ( from rags to riches and to rags)
The Problem ( founders fear, limitations, jealousy of successor, spouse
reluctance to let go, employees reluctance to lose personal relationship, fear
of change, or founder’s not interested in succession
Failed FOBs in Nigeria (AbiolaGroup, OdutolaBrothers, J.O NwankwuGroup)
The LIQS (Limited, Institutionalised, Quoted & Social cause) Framework as a
panacea provided the entrepreneur is sincerely interested in
transgenerational survival of the business

15. Why most generational wealth transfers fail

16. The Founder’s Aspirations is important
Quoted FOBs in Nigeria –Dangote Grp, FCMB, Zenith, UBA, Chams, Fidson, Honeywell, ABC transport
etc
Not quoted but good FOBs ObatOil, Capital Oil, Global Fleet, DoyinGroup, ElizadeMotors etc
The big questions –is it in all cases that the founders want transgenerational survival of the business ?
GaniFawehinmi’sexample
-Good business, successful aw Chamber, well managed with good
employees, a good brand
-The Chamber died because the founder willed that it should be wound
down within 2 years of his death … diendapril2009 and chamber was
closed down in Jan 2011

17. LIQS FRAMEWORK –A tool for Entrepreneurs to pass wealth
The Framework proposes that:
1.Businesses have higher prospects of
transgenerational succession and transition when
they are:
Limited –Legal, can sue and can be sued, can execute
contracts
Institutionalised –established SOP, policies and
processes, Professional Mgt, Corporate governance
principle, Succession plan
Quoted –listed and the shares become tradeable and
liquid, market valuations, full disclosure, and stronger
corporate governance
Social Courses –brand image, founder’s name kept in
public domain after they are no more
Reference : IK. Muo ( Entrepreneurship in changing environment)

18. The Entrepreneurial Mindset
Entrepreneurship is not for the faint-hearted. It requires resilience, determination, and a strong
mindset
Embrace failure as a learning opportunity and as a stepping stone
Carol Dweck, a renowned psychologist argues that individuals with agrowth mindsetare more
likely to achieve their goalscompared to those with a fixed mindset.
Foster resilience and adaptability:
Entrepreneurship is filled with unexpected twists and turns. Elon Musk, the CEO of Tesla and
SpaceX. Despite facing numerous setbacks and criticism, Musk has consistently demonstrated
hisability to adapt to changingcircumstances and persevere inachieving his ambitious goals.
Surround yourself with a support network:
Seek opportunities in adversity:
entrepreneurs with an entrepreneurial mindsetviewchallenges as opportunities for growthand
innovation

19. What do you need ?
Leadership,Attitude,&WillPower

20. Please Note:
•“Life is not happening to you. Life is responding to you.”–Rhonda Byrne
•“The energy of the mind is the essence of life.”–Aristotle
•Once your Mindset changes, everything on the outside will change along with it.”–Steve
Maraboli
•“Positive thoughts, words, and actions create positive feelings. Positive feelings
generate positive energy.”–NozerKanga
•Always beware of the people you allow in your energy space. Some might contaminate
your energy to a point of no return.”–Mitta Xinindlu
•“If you are positive, you’ll see opportunities instead of obstacles.”–WidadAkrawi
•“There’s a direct correlation between positive energy and positive results.”–Joe Rogan
•“Energy flows where attention goes.”–James Redfield