The 2023 Family Business Survey has unveiled the primary concerns plaguing Australian family businesses, with the top five challenges including cash flow improvement, family member and employee management, succession planning, product development, and market expansion.
Grant Thornton has unveiled its 2023 Family Business Survey on Australia’s National Family Business Day, shedding light on the pivotal challenges and focal points within the Australian family business landscape. With family businesses constituting approximately 70% of all businesses in Australia and employing nearly half of the nation’s workforce, this research aims to bolster the resilience and adaptability of these businesses by spotlighting sector-specific challenges and opportunities.
Amidst economic uncertainties marked by escalating costs, high inflation, and the spectre of rising interest rates, the survey has revealed a surprising resilience within family businesses. Despite concerns of a potential recession, a substantial 67% of family businesses maintain a highly optimistic outlook on the current economic landscape, particularly concerning the development of new products and expansion into diverse markets.
Australian family businesses are unmistakably driven by growth ambitions, with a pronounced focus on enhancing cash flow, innovating new products, and venturing into fresh markets. However, the research also highlights an underutilization of available resources, as many family businesses (ranging from 50% to 72%) perceive government support and research and development grants as relatively unimportant.
Succession planning remains a top priority for family businesses, with 72% of them deeming it crucial for their business in the next 24 months. While 43% are actively formulating succession plans, 38% have already begun implementing them, underlining the complexity of balancing family relationships, fairness, and business growth in this context.
Kirsten Taylor-Martin, Partner & National Head of Family Business Consulting, observed, “The top two challenges are interesting as they can be linked to the current economic climate where the majority of Australian family businesses are looking to improve cash flow, while also attracting and retaining the best staff. Succession planning comes in at number three and is still such an important issue for family businesses as it can be extremely challenging to balance maintaining family relationships and fairness while encouraging business growth.”
She also noted, “Government Grants appear to be an untapped resource for family businesses, indicating there is a need for education, simplification, and support for understanding available benefits, particularly for innovative family businesses, like the R&D Tax Incentive and Government Grant programs.”
Upon scrutinizing the survey results, Grant Thornton identified four key themes shaping family businesses in 2023:
Leaving a Legacy: A generational shift in perspective emerges, where younger generations contemplate their role as stewards of the family business and consider their impact on the community and family legacy.
Succession Planning: The perennial challenge of succession planning remains, encompassing the delicate balance between family harmony, fairness, and business prosperity.
Future Growth: Sustainability and ESG (Environmental, Social, and Governance) standards may not fully resonate with family businesses, which are often guided by their unique family values rather than industry terminology and mandatory standards.
Embracing Diversity: The untapped potential for growth through diversity is highlighted, yet many family businesses have yet to fully recognize its power in contributing to expansion and the long-term sustainability of the family enterprise.
The complete 2023 Family Business Survey report showcases what makes family businesses distinctive and unique, and the integral role they play in Australia’s wider economy.
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