The World’s Oldest Businesses – How Do They Do It?

If you were to ask someone to name the oldest business they can think of; many will mention oil companies or financial institutions, maybe even breweries or wineries and mostly from the Western world, but very few people will mention any Japanese companies
There is a word in Japanese: ‘shinise’ meaning ‘old shop’ to describe the multitude of 100+ year old companies in Japan and it is heavily associated with trust and wealth. To have a word describing these companies must mean that there are quite a few – in fact there are over 52 000 companies in Japan that are over 100 years old and 21 of those have been in operation for more than a thousand years.

What is Japan’s secret?

Many of these companies are family owned and whether they are old or young companies, large or small, the family influence is strongly felt. ‘Ie’ in Japan means both family/home and in a business sense the idea of single inheritance. Under the ‘Ie’ system the eldest son inherits the father’s assets and keeps the family name alive i.e. the family property and ownership/running of the family business. Most of these ‘shinise’ businesses are risk averse and a quarter of them have enough reserve funds for two years of operation.
It is a given that these enduring businesses are all operating in fields with continued demand, but the country’s culture is the overwhelming reason for the number of old and successful businesses. Legacy and the importance of the family business is taught to kids from childhood and selection of the heir is based on qualities beyond family bloodlines. The Suzuki family did not have a male heir and Osamu Suzuki (born Matsuda) was married into the family, adopted the family name and is currently the Suzuki chairman.
Hoshi Ryokan, founded in 718 is widely considered to be the oldest continuously operated family business in the world. Run by the Hoshi family for forty-six generations it is a traditional Japanese inn (‘ryokan’) with around 100 rooms.

What about the rest of the world?

When I say ‘rest of the world’ read Europe as the New world i.e. North and South America were only ‘discovered’ by the Europeans in the late 15th century. In addition, think of family businesses, as according to the Harvard Business Review, family businesses account for 85% of all companies in the world and well-managed family businesses last longer than most.

Below is a brief selection of non-Japanese businesses that started from over 1000 years ago:

• Chateau de Goulaine. A castle estate in France founded in 1000 producing wine and hosting functions and weddings. Still owned by the de Goulaine family.
• St Peter Stiftskeller is a restaurant within the walls of St Peter’s Abbey in Salzburg, Austria and was founded in 803. The age claim is based on the writings of Alcuin who served Emperor Charlemagne and it is also claimed that dignitaries such as Christopher Columbus and Mozart were served here.
• Sean’s Bar in Ireland was established in 900 and the key to success appears to be location. Located on the banks of the River Shannon on an ancient glacier carved route that provided safe passage to travellers.
• Beretta, an arms manufacturer founded in 1526 first produced barrels for arquebus long guns, which were a smaller version of a musket used in the 15th to 17th centuries. Currently renowned for producing sporting, military and personal firearms, the Beretta family has continuously run this business for 15 generations.
• Cambridge University Press in England is the world’s oldest publishing house and works from the esteemed University of Cambridge. Started in 1534, they were responsible for such hits as ‘Principia Mathematica’ by Sir Isaac Newton and more recently Noam Chomsky’s essay collection, ‘Language and Mind.
• Mexico’s Jose Cuervo is a far more well-known brand and considered a youngster in this list by being founded in 1795. Responsible for the birth of the tequila industry, Jose Cuervo is run by the Beckmann family, descendants of Don José Antonio de Cuervo and were the first to sell bottled tequila (as opposed to the common barrel method) in 1906.
• Not to be outdone, South Africa can boast Boplaas. Established in 1743 the business starting with fruit cultivation and export, and in 1880 started crafting wines and spirits. A sixth-generation business run by the Nel family, they unintentionally introduced Tinta Barocca wine having mistakenly thinking they had planted Shiraz.

Cymbals, really?

Most of the businesses in the above list involve food and drinks, but the following story involves cymbals, which is a bit of an outlier when you think of the products or services from successful companies.
In 1618 an Armenian metalsmith called Avedis was working in the court of the Ottoman Sultan when he discovered a method of shaping an alloy of tin, copper and silver. He created a thin metal that could make musical sounds without the material shattering. The Sultan was so impressed that he granted Avedis the surname Zildjian, which means ‘cymbal maker’, and in 1623 he was granted permission to start his own business apart from the palace.
When Avedis died he passed his alloy formula and his cymbal business to his son thus starting one of the most amazing family run businesses, which is still going after 400 years. The secret to their success is the fact that the alloy formula has remained a family secret. The Zildjian family members who do know the recipe are forbidden to share it, even with their own spouses. They have adapted well from making instruments of war (cymbals were used for clear communication in the noise and mayhem of a battlefield) to musical instruments for rockstars.
They navigated both World Wars, an Armenian massacre, family head exile, emigration to the United States and the Great Depression. A dispute between brothers in the early 1980s led to a court case and one brother breaking away to start his own cymbal business called Sabian. Both Zildjian and Sabian continue to be run exclusively by members of the Zildjian bloodline.
In conclusion, the clear key points in what forms the basis of successful businesses run over hundreds of years are tradition, heritage and core values. The majority of these ‘senior citizen’ businesses are family run and maintain a determined focus on the core business while innovating within the core product/service offerings. A conservative financial policy and a fine balance between being a risk taker and being risk averse.
As Steve Jobs so eloquently said: “If you really look closely, most overnight successes took a long time”. What is a long time when building a business?
Warrick Asher
General Manager – Business Development, BarnOwl GRC.