Why many Liberian-owned businesses fail: A first person account

By Jackson Fiah Doe, Jr


The Perspective
Atlanta, Georgia
January 9, 2006



Travel with me, if you will, back in time to the early 1980’s. As a kid growing up in the northeastern Liberian city of Sanniquellie, I knew many foreign and Liberian businessmen; most of them were my father’s friends. They often visited my father – the late Jackson F. Doe, an erudite and well-respected politician – at our home, and discussed many issues, including business. It was there that I keenly observed the differences between these two groups. The Liberian businessmen were always well groomed and flamboyant. They were more concerned about living the good life than growing their businesses, and talked about traveling overseas, buying new cars, building nice homes and so forth. Additionally, they were very generous, always having money on hand to give me. As for the foreign merchants, they were not exactly of the GQ variety. They were oftentimes poorly groomed and clumsily dressed. Nevertheless, they discussed substantive issues, like expanding their businesses and finding the necessary capital to do so. They were very thrifty and barely gave me any money.

A Few years later, most of these Liberian businessmen never visited our home again. When I asked what happened, my dad said many of them were no longer in business and have fallen on hard times. In fact, my parents and I ran into one of these men in a town near Monrovia (Liberia’s Capital). He looked dejected, malnourished, and wore a pair of old shoes. My dad gave him some money. I felt bad for the man. I wondered why many of these seemly successful Liberian entrepreneurs failed in their business endeavors, but did not find answers. Meanwhile, the foreign merchants were doing quite well. Many of them expanded their businesses.

Fast-forward a couple of decades. Having acquired an MBA and established a couple of businesses from scratch, I have gained valuable skills and expertise requisite to running a business, and can now ably articulate why many Liberian-owed businesses do not succeed. This paper is intended to be a valuable resource for current and aspiring Liberian entrepreneurs. It will, hopefully, enlighten them on what went wrong with many failed Liberian-owned businesses, and why a few of them have managed to succeed; this would enable them to make good discussions, resulting in success, while avoiding costly mistakes. However, should they choose to look the other way, they would be heading for trouble, which could result in their undoing.

Some factors leading to the failure of Liberian-owned businesses

It seems to me that many Liberian-owned businesses begin with great fanfare, and hope of a successful future. But, after a few years, many of them fail. Nevertheless, some do succeed. There are a number of reasons why many Liberian-owned businesses go under, including but not limited to, failure to keep track of the bottom line, lack of fiscal discipline, costly cultural practices, and lack of a succession plan.

Failure to keep track of the bottom line
I believe that many Liberian entrepreneurs do not keep accurate records of income and expenses of their businesses. This is primarily due to their lack of strong involvement in the daily operations of their enterprises. Rather, they hire someone else – who may not necessarily have a stake in the success of the company – to manage their businesses on a day-to-day basis. Thus, these entrepreneurs tend not to really know the exact amount of money that is coming into the business (receivables or income), as well as how much is going out (payables or expenses). Without accurate accounting records, it is difficult to know if a business is truly making a profit, that is, when revenue or income exceeds expenses; they (Liberian entrepreneurs) also won’t truly know if their businesses are losing money, which happens when expenses exceed income. Therefore, it is safe to assert that many Liberian business people are woefully unaware of the true financial conditions of their businesses. It is a recipe for disaster when an entrepreneur does not truly know whether or not his/her business is profitable. Because many of these entrepreneurs do a poor job of keeping track of the bottom line, they very often experience financial troubles, which result in the collapse of their businesses.

Lack of fiscal discipline
Another factor, in my judgment, that engenders the demise of Liberian-owed businesses is the unwillingness of their owners to be fiscally disciplined. Instead of saving some, if not most, of the profits or reinvesting in their businesses, many Liberian businessmen have the tendency to use the money on living the good life. They build big homes with expensive furniture, drive nice cars, as well as wear expensive clothes. They are obsessed with impressing people. It is a mistake for any entrepreneur not to put some money away, and to be financially prepared, should his business experience bumps along the way.

Additionally, most Liberian entrepreneurs are very freehanded. Consequently, they don’t manage their money prudently. I knew a family friend who frequented our home. He was very generous. He would always have in his car, bags filled with five-dollar coins (the Doe coins used during the 1980’s). Before leaving our home, he would take a bag from his car, and give me lots of five-dollar coins without counting the money. Sometimes I got $200 or $300 from this man. Although I appreciated the money at the time, in retrospect, he should have exercised financial prudence by just giving me a few dollars. After all, I was just a kid, and didn’t need all that money. Also, it was not wise for him to have bags of money in his car. At least, he should have deposited it in the bank. This man is by no means atypical. Many Liberian entrepreneurs always have lots of money in their possessions. They eventually spend it. A proprietor should always focus on saving or investing than spending profits from the business. Most of these businessmen have learned this lesson the hard way. Their businesses did not survive during financially turbulent times, because they did not have money available when they needed it most.

Cultural practices
There are some aspects of the Liberian culture, which in my view, give rise to the failure of many Liberian-owed businesses.

Lack of family involvement in business
Many Liberian entrepreneurs do not get their spouses and children involved in their businesses. Consequently, there is no semblance of accountability or checks and balances. If spouses are involved in the running of the business, perhaps they are more likely to ensure that the profits from the business are used wisely. Because this is usually not the case, most of the entrepreneurs tend to rely on outsiders, often to their peril. Since most employees don’t have a stake in the success of a business, therefore they don’t really care what becomes of it. In contrast, a spouse, if involved in the enterprise, will do everything possible to make certain the business succeeds. Many spouses of Liberian entrepreneurs either stay at home to take care of their kids, or have careers unrelated to the business. Without their spouses making sure that everything goes well, the entrepreneurs might make mistakes that could result in the downfall of their businesses.

Also, most Liberian entrepreneurs do not prepare their businesses for life after they are gone. They do not get their children involved in the business. It is critically important for, at an early age, to know about their family business, so as to be well prepared to take over, if their parents die or are no longer able to actively manage the business.

Almost all Liberian businessmen, married and unmarried, have girl friends or mistresses. When someone becomes successful in Liberia, be it in business or government, he is expected to become “a god pa”. The term “god pa” refers to a married man who is having a secret sexual relationship with a young girl. He is to house, feed, cloth, as well as educate this young woman. In some instances, a businessman may have multiple girl friends or mistresses. For a businessman, this can be costly. In addition to supporting his own family, he has to take care of his lovers. If he failed to do so, the women are likely to look elsewhere. In order for Liberian entrepreneurs to keep these illicit relationships, they have to constantly tap into the finances of their businesses, which is not fiscally prudent. The money that is supposed to be used to re-invest in the business is then diverted to sponsor girl friends or mistresses. The women know that the guys want one thing: sex. Therefore they (the women) subscribe to the maxims that “ No money, no honey”, and “ No romance without finance. Keeping these women happy doesn’t come cheap. One has do constantly shower them with money. If the money stops, so do these relationships. Instead of saving money to grow their businesses, many Liberian proprietors spend it on girl friends or mistresses.

In the mid 1980’s, a successful Liberian businessman was having an affair with one of my relatives. Although married, he was madly in love with my cousin. He rented a place for her, and frequently showered her with money and gifts. My cousin told me that even though she did not love the guy, she acted as if she did, because she wanted his money. In the late 1980’s, however, he lost his business. My cousin left him. He was heartbroken. My cousin later explained to me that the guy had other mistresses whom he also supported. I believed that this guy spent almost all his money on women. No wonder his business did not survive. This clearly shows that womanizing usually does not have a happy ending, especially for a businessperson.

Supporting extended families
It is customary in the Liberian culture for a successful person to - in addition to taking care of his own family - financially support extended family members. In most cases, Liberian businessmen are the only ones in their families who are successful. As a result, most members of his extended family depend on them for their livelihood. Many of the entrepreneurs have relatives living with them. In some cases, there are as many as 20 extended family members living with their relatives. It requires a lot of money to pull this off. This puts a financial strain on these businessmen, who see it as their obligation to help their extended families, and therefore don’t have the guts to say no. There is no way for them to really save money, when they have so many people to take care of. This often creates financial problems in their businesses, because funds are shifted from running the business, to support extended families. This practice hampers the progress of businesses. If these businesspeople refuse to help family members, they are labeled mean or wicked, which in the Liberian culture is not a good thing to say about someone.

The Mandingo Merchant – a model of success in business

Although lots of Liberian-owned businesses eventual fail, there are others that do in fact succeed. Most of ones that succeed happen belong to Mandingoes. Mandingoes, at least before 1990, owned most of the successful Liberian-owned businesses. They migrated from Mali in the last few centuries and settled in most West African countries including Gambia, Senegal, Guinea, Ivory coast, and of course Liberia. They have been engaged in commerce and trade in West Africa for a very long time, and are some of the richest Liberians. They are involved in such businesses as shops, shoe repair, gas stations, passenger transportation, buying and selling diamonds, gold, and cash crops, and the like. There are a number of reasons why this ethnic group tends to succeed in business.

Managing money wisely
These merchants know how much money is actually coming into the business. They also keep a good track of how much is spent. Unlike other Liberian businessmen, the Mandingo traders use money wisely. They live within their means, and do not impress others by incurring unnecessary expenses, as many Liberians do. You will never see a Mandingo merchant spending a lot of money on expensive clothes, new cars or big mansions. They are concerned with saving money. Although many of them don’t have saving accounts at banks, they tend to keep their money at home.

Having a Succession Plan
Most Mandingo merchants involve their children in their businesses. Their kids are exposed early to the business and learn about all aspects of the enterprise. They are then able to take over business, if their parents die or are no longer able to actively run the business. I had a friend whose dad owned a shop in Sanniquellie. He got involved in his father’s business when he was in the 6th grade. After school, he would go to his father’s shop and restock inventories. He also did some cashier duties. When we were in the 11th grade, his father died. He took over the business and never missed a beat. In fact, the business grew faster when he took over than it did when his father was in charge. I believe that had my friend not been groomed to succeed his dad, he would have made many mistakes that could have ruined the business. But he learned the business well. I also knew countless Mandingoes who were prepared to succeed their parents. By positioning their children to succeed them, most Mandingo merchants are assured that he their businesses would survive when they pass away.

Total involvement in the business
For the most part, these merchants are very involved in all aspects of their businesses. They rarely hire anyone to run their businesses, as many Liberians do. Therefore, they know first hand how well their businesses are performing. Additionally, Mandingo merchants are very hardworking. They work very long hours. They persevere amid difficulties and frustrations. As a result, they often succeed in their business endeavors.

Strong patronage
Mandingo entrepreneurs are supportive of another other. This is especially true when it comes to business. They strongly patronize the businesses of their kinsmen. For instance, in Sanniquellie, during the early 1980’s, a Mandingo merchant had a shoe repair shop that was heavily supported by his fellow tribesmen. Because of this, the business grew so large that it opened a second location. I used to see lots of people waiting in line the shoe repair shop to be served, mostly Mandingoes. Such a great support assures success. Unfortunately, other ethnic groups in Liberia are not as supportive of their kinsmen. This is why businesses owned by Mandingo merchants are very successful.

Access to capital
Most Mandingo merchants have access to capital, a luxury not available to many other Liberian entrepreneurs. Because of this, they managed to rebuild most of their businesses after been destroyed during the Liberian civil war. There are a couple of reasons why they have access to capital. First, most of these merchants save money, and thus have cash available to use when the need arises. Because they are savers not spenders, they have money on hand to re-invest in their businesses. Second, their kinsmen are always willing to lend them a hand financially. Most Mandingo merchants get funds from other kinsmen to either start or expand their businesses. Instead of going to the bank to borrow money, they get the needed funds from relatives or friends.

Examples of successful Liberian-owned businesses

As already mentioned not all Liberian-owned business fail. There are some that succeed. Three of such businesses are: Jungle Water Group of Investments (JWGI), The Liberian Observer Corporation, and Bonjal Fast Food Restaurant.

Jungle Water Group of Investments (JWGI)
Founded by Tomah-Sehe Floyd, who is of Liberian and Lebanese lineage, Jungle Water Group of Investments (JWGI) is a conglomerate whose lines of business includes stores, rental properties, buying and selling diamonds, gold and cash crops, as well as providing electricity and DSTV services. According to some of my family members who know Floyd, his company saw its genesis during the Liberian civil war. At a time when businesses were fleeing Sanniquellie in droves – because of security concerns - Floyd moved to the city. He saw an opportunity when no one else did. Undaunted by the political instability, he opened a store there. The store’s value proposition was simple: Offer customers all the basic essentials, everything from toiletries to food. As the only store in Sanniquellie, it quickly gained a critical mass of customers in the city and its environs; he also won the loyalty of his customers. The store became so successful that Floyd broadened the scope of his business interests to include buying and selling diamonds, gold and cash crops. He also purchased rental properties. Because of its numerous business ventures, Jungle Water Group of Investments has emerged as one of the most successful companies in Liberia, thereby making Floyd one of Liberia’s richest businessmen.

Keys to success
Jungle Water Group of Investment managed to gain a critical mass of customers during the Liberian civil war; most of them continue to be very loyal customers. It was the only company in Sanniquellie selling products that the people desperate needed. Hence, it captured the hearts of customers, which translates into sustainable profits.

Additionally, its ability of recognize and capture untapped markets has enabled Floyd’s company to emerge a formidable force on the Liberian business landscape. As mentioned, when businesses fled Sanniquellie, Floyd moved in. What happened next was nothing short of genius. Floyd realized that if he could provide residents of the city and surrounding areas with much-needed goods and services, he could position him to dominate that market. He did exactly that.

The Liberian Observer Corporation
The Liberian Observer Corporation, which publishes the Daily Observer, saw its origins in 1981, when Kenneth Best founded it.1 Shortly thereafter, it emerged as the most trusted newspaper in the country. It was shut down numerous times the Liberian government a number of times in the 1980’s it was critical of the Doe administration, and it publisher (Kenneth Best) subsequently imprisoned. Despite these challenges, the newspaper did not go under. It kept operating. With the onset of the Liberian civil war, the Liberian Observed closed its doors. However, it was revived in 2005. It also launched a very successful online site, which is frequented by thousands everyday.

Keys to success
I believe one of the Liberian Observer’s keys to success is its unwavering commitment to providing Liberians with quality news. The company should have crumbled during the Doe era. Because of its tenacity, the newspaper managed to survive amid difficulties and frustrations brought upon it by the government. Another reason for the newspaper success is it access to capital. Had it been undercapitalized, it won’t have survived.

Additionally, the company made a great move by getting the next generation involved in the business. Kenneth Best recently brought on board Boto Bradfrad (Daughter of Kenneth Best) as Online Editor. In addition, Mr. Best’s son, Bai, is Marketing Manager of the company. Mr. Best has done a marvelous job of putting in place a succession plan, should he not be available to run the newspaper. This guarantees that company will thrive well into the 21st century.

Bonjal Fast Food Restaurant
Founded by Samuel J. Doe and his wife Annie, The Bonjal Fast Food began in 1986 as provision shop name Curve, which offered African dishes for lunch, and drinks from afternoon till late evening.2 However, Curve was re-named Bonjal in 1987, and its core business subsequently shifted to quality ice cream and fast food3.

I frequented Bonjal in the late 1980’s as a freshman at Cuttington College, situated several miles north of monrovia. It was the hottest spot for college students. My college friends and I loved Bonjal, which is located just outside Monrovia, on the Schiefflin-Robertsfield highway, which leads to Liberia’s only international airport. It was very clean and comfortable. The quality of service was first class. The employees were very nice and helpful. The wait time to get orders was very short. The ice cream was delicious. Every time we visit the place, it was always jammed packed, with standing room only.

When the civil started in 1989, the restaurant was forced to shut its doors. However, it re-opened in 1993, which cost about $300,000 for renovations and equipment purchases.4 When the civil war flared up again in 1996, the owners again found themselves again shutting the restaurant’s doors. Now the restaurant is back. It re-opened, for the third time before the Christmas 2005, after Mr Doe and his family invested $199,000.5 More determined than ever to succeed, the company has plans to expand to the 16 counties.6

Keys to success
I believe one of the reasons the restaurant has withstood the test of time has been its access to capital. If this was not so, it would not have re-opened for the third time. The restaurant, I presume, has very good relationship with its creditors. Also, the owners, I am convinced, have saved money, which they use to re-start the business.

Second, its unwavering commitment to excellence has enabled Bonjal to enjoy success. It entertainment environment is second to none in the country. Bonjal’s employees are adequately trained. And of course, the ice cream and fast food are of superior quality.


I strongly believe that most Liberian-owned businesses can indeed succeed if they come to terms with some of the factors that have kept them from moving to the next level. After recognizing these flaws, theses businesses should then take substantive steps to not only survive, but also achieve success, just as a few Liberian-owned enterprises have done.

Get totally involved
Most Liberian entrepreneurs, especially those of the indigenous stock, are not very involved in the running of their businesses. If they are to succeed, these entrepreneurs must know all the intricacies of their enterprises. They ought to learn from the Mandingo merchants. These merchants don’t allow anyone to manage their businesses, especially when it comes to handling money. They know how much is truly coming into the business, as well as what is spent. For instance, if a Mandingo merchant has a shop, he will be only one to open and close the shop. He is in the shop from early morning to late night. He will, once in a while, have his children fill in when he has to do something else. Conversely, a typical Liberian with similar shop will seldom be at his store. Instead, he will hire someone to do that. More often than not, that person will not report the amount of money that was truly generated. This can be avoided if the owner takes control of the business.

Exercise fiscal discipline
Perhaps one of the most significant determinants of a successful business is its ability to embrace fiscal discipline. As already mentioned, most Liberian-owed business crash and burn due to their proprietors’ failure to manage their funds prudently. Many Liberian businessmen, in order to avoid unnecessary spending, should develop a monthly as well as annual budget. It will estimate how much money is to be generate) and how much should be spent. Not only should they create budgets, they should also carry them out. Following a budget makes one fiscally disciplined.

Also, it is critical for an enterprise to open separate checking accounts at a bank for business and personal matters. The two accounts should not be commingled, as doing so would have an adverse impact on the business. For example, money designated for business might be used for personal issues. Additionally, it is advisable to set up a saving accounting which is to be used for capital expenditures, such a new equipment, new building, business cars, and so forth.

When the income of a business is received and recorded, it is important to first take out funds for operating the businesses. Next, money should be set aside for personal expensive. Some of what is left must be saved, as well as earmarked for discretionary spending.

Also, Liberian proprietors should not spend money just to impress people. They should instead operate within the framework of a budget, and not always buy the most expensive clothing, drive the nicest car and live in the biggest house. In contrast, most wealthy business people in the United States and the Western world don’t look rich. They appear simple. One does not get the impression that they have deep pockets.

In 1996, my perspective regarding impressing others drastically changed. A friend and I, while entering an elevator of a downtown Chicago building in which his wife worked, a short bald guy made his way into the same elevator. Immediately, my friend’s countenance (facial expression) changed. I was puzzled. I did not know what happened. After the man left the elevator, my friend told me the man’s name is Samuel Zell, a billionaire. His current personal fortune is in excess of $2.2 billion.7 I did not believe my friend. After all, the man looked like the janitor of the building. He was poorly dressed and not properly groomed. He also drove an old car. I expected a billionaire to have security guards, and wear very expensive clothes and jewelry. My friend explained to me that Samuel Zell owns thousands of rental properties throughout the United States, including the twenty-story building that we were in. To date, he owns 225, 000 apartment buildings.8 I never knew a man so rich would be so humbled. No wonder he is very wealthy. He is thrifty, and is a saver not a spender. If Liberian businessmen could learn from Samuel Zell, they would save most of the profits from their businesses, instead spending it unwisely, and thereby becoming wealthy.

Re-examine and challenge costly cultural assumptions
It goes without saying that womanizing is a social pathology that enviably takes its toll on most Liberian businesses. It is critically important that Liberian proprietors, who engage in such a practice, be aware of its devastating impact on businesses, and take steps to curtail, or better yet, divorce themselves from this vice. Because of womanizing, many Liberian entrepreneurs don’t succeed. They divert funds from their businesses to bankroll their illicit sexual relationships. For many proprietors, confronting this vexing issue won’t be easy; this practice it has been going on in Liberia for generations, and letting go of such a lifestyle will take time. Business people should spend money on income generating activities, not on cost-incurring endeavors like womanizing. This lifestyle makes Liberian businessmen poorer not richer, and must be redressed if they are to move to the next level.

I believe that Liberian businesspeople should be strategic in helping relatives. The fact is no one person can help all his/her relatives. These entrepreneurs have to say no sometimes, in terms of helping relatives, a very difficult proposition in societal-oriented culture. The businessperson oftentimes does not have the guts to say no; they don’t want to be labeled “mean” or “wicked”, which in the Liberian culture, is a terrible thing to say about someone. There are family members who are users. No matter how much help you give them, they are never satisfied. Therefore constantly helping these people will only strain the finances of a business, which could lead to its demise. I suggest that business should help only family members who want to make something to their lives; also those who are physically incapable of supporting themselves should be the main recipients of help. As for family members who are healthy and past teenage age years, they should be encouraged to get into business for themselves. Helping relatives who don’t want to help themselves only perpetuates the dependency syndrome, something no businessperson should encourage.

Have a succession plan
If a business is to outlive its founder, it is imperative that the next generation is involved. Most business people don’t get their kids involved in the business. Therefore, when the founder dies, so does the business. In contrast, the Mandingo merchants expose their kids at an early to the businesses that they are in. The kids learn about all aspects of the business, and are adequately prepared to take over the business when their parents die. The perception of many Liberian business people is that they children are too young or immature to learn the business. Therefore they tend to hire outsiders. What these parents don’t realize is that their kids bring a new dimension to the business. Most of the children of Liberian business people are better educated than their parents, and can better deal with new challenges facing the business, which may require new solutions. Additionally, the children are more comfortable with new technologies – computer, scanners, Internet - and can optimize these technologies to benefit the business; they can in turn move the business to the next level, which their parents may not be able to do. Also the children could attract a new segment of customers, such as young people, which translate into profitability for the business.

I am of the conviction that many Liberian-owned businesses fail due to a multiplicity of fiscal and cultural factors. If Liberian entrepreneurs are to ably compete in the Liberian business environment with their foreign counterparts, they must be aware of the potential land mines that could spell disaster for the enterprises. Also, they are become knowledgeable about the secrets of successful Liberian-owned businesses like the Liberian Observer, Bonjal Fast Food Restaurant, Jungle Waters Group of Investment, as well as businesses owned by Mandingo merchants. Only then would they be well positioned to make significant inroads into the Liberian business environment.

1 http://www.liberianobserver.com/info/about_us.php
2 Kpeh-Kpeh, “Determined to Rebuild and Serve, Bonjal is back!” Daily Observer, December 12, 2005
3 Ibid
4 Ibid
5 Ibid
6 Ibid
7 http://www.usatoday.com/money/companies/management/2004-05-02-exec-zell_x.htm
8 Ibid

About the Author: Jackson Fiah Doe, Jr. is an entrepreneur in the Chicago area. He obtained a BA and MPA from the University of Illinois, as well as an MBA from DePaul University. He has a wealth of professional experience, and has held several positions including Research Analyst (EEOC), Personnel Manager (Conway-Milliken and Associates), Accounting Manager (Lakeshore Management Group), Director of intake (Salvation Army). He can be reached at jacksondoe@sbcglobal.net.