The Implication of Financial Management on the Long- Term Success and Sustainability of a Family-Owned Business in Rwanda

Katete Julius – University of Rwanda-College of Education/Edify Rwanda

Muhozi Steven – Rwanda Polytechnique (RP), Karongi College

Email: katetejulius45@gmail.com/ muhizisteven22015@gmail.com

Abstract: Family-owned businesses (FOBs) are the vibrant heart of Rwanda’s private sector, yet their future is often precarious. This study investigates the critical relationship between financial management and the long-term survival of these enterprises. It uncovers a profound paradox: while Rwandan entrepreneurs are driven by ambitious, long-term visions for growth and legacy, their financial practices remain firmly anchored in the short-term. This “Aspiration-Practice Gap” reveals a disconnect between where they want to go and the tools they are using to get there. Based on primary data from 580 businesses, the study finds that while a majority maintain budgets, a striking 83% neglect formal financial forecasting. The analysis reveals that disciplined financial practices—such as maintaining a detailed budget and using forecasting tools—are powerful predictors of an owner’s confidence in their firm’s long-term sustainability. The paper concludes that bridging this gap is essential for the future of Rwanda’s FOBs and recommends a tiered approach of targeted financial literacy programs and the development of localised digital tools to empower these entrepreneurs to turn their aspirations into lasting legacies.