The unique dynamics of family businesses

The Family Business Association have just published the 2025 Family Business Barometer Survey results. I worked in a large family business for 15 years alongside the owner and founder in a senior leadership role and continue to work with family-owned businesses in a consulting and coaching capacity.  Hence, I think I’ve got a pretty good insight into the unique nuances, rewards and challenges of family business.  I want to share key insights from the Barometer that in conjunction with my own experience I took away from these survey results.

In this article, I’ll focus on values alignment, efficiency, succession, cash flow, and knowing your numbers in family business. These are all crucial to building a resilient family business that will thrive across generations.

1. Values alignment in family businesses

In family businesses, values aren’t just something you write on a wall—they’re at the heart of the business. The Barometer found that 73% of family businesses credit their success to strong family values (p. 6). When I’m working with business owners to help them define or refine the values of the organisation, their version of “family comes first” is always the first value that gets spoken of. It’s non-negotiable.

And the main reason I stayed working in a family business for 15 years was because of how I was treated. I felt like I was valued, the owner and my colleagues were looking out for me, and I wasn’t just a number.  Others would notice if I was under the weather and would show genuine interest in my weekend and my holiday.

And it’s this family feel that generates loyalty. The reciprocity of “if you look after me, I’ll look after you”.

“Walking the talk”

But it’s not enough to just have values; it’s about “walking the talk”. This isn’t as easy as it sounds, especially in family business.  I’ve seen examples of senior people that have been with the organisation for years getting away with inappropriate behaviours that definitely contravened the company values. Why? Because they were long serving loyal servants.  Interestingly this can start to unravel when the next generation that don’t have the same depth of relationship with those individuals aren’t so tolerant of poor behaviour.

A decision making framework

From my own experience, when the values of the company are an extension of the family’s values and everyone is on the same page, it makes decision-making easier.  Values, when done well are a decision making framework. When I’m coaching businesses we spend quite a bit of time on these important foundations, because they are crucial to building a resilient business.

Embracing the values means:

• When tough situations come up, you can rely on those values to help make the right decision.
• Recruiting the right people that are culturally aligned.
• Managing performance with reference to the values; and
• Exiting people from the business where values are misaligned.

2. Improving efficiencies and the opportunity for innovation

Inefficiencies in family businesses are more common than you might think, and they can hinder productivity and profitability. The Barometer found that 47% of businesses are struggling with improving business efficiencies and operations (p. 7).

I have seen inefficiencies due to a combination of:

• Outdated systems and processes.
• Processes that have been built around individuals.
• Long serving loyal staff that have never worked anywhere else, impacting their ability to contribute objective suggestions for more efficient ways of doing things.
• A lack of focus on looking outside the business to raise awareness of what others are doing and keeping up to date with contemporary practices. The article talks to “taking the blinkers off “.
• An attitude of “if it ain’t broke don’t fix it”. And this can be particularly apparent where eg the Owner and CFO have worked together for 35 years and developed their way of doing things that works for them.
• Family members being in roles they aren’t best suited for.

Resistance to change

I’ve worked with family businesses that put off dealing with inefficiencies because of resistance to change. And that resistance to change in family business sometime arises from best intentions of not wanting to upset long serving highly valued staff.  Sometimes it’s just easier to keep doing things the way things have always been done. The challenge is to be able to bring those highly valued staff along on the journey.  I like the way the article talks to ”……collaborate on innovation projects, blending fresh perspectives with the wisdom gained from lived experience.”

Let’s look at an example

I’ve supported clients to navigate this journey particularly where the senior finance person is the most trusted person in the business, has worked with 3 generations of the family and is now approaching retirement.  Their pending departure presented a significant risk due to the absolute trust built up over years and consequential over-reliance on them.  They had developed their own processes, many of which were manual, undocumented and hadn’t changed much in years.

In one instance the CFO was reluctant to retire because they were genuinely concerned about what would happen in their absence, and their loyalty meant they wouldn’t leave the company in a mess. The key to bringing them along on the innovation journey was to help them realise that if processes weren’t systemised, automated, documented and additional controls introduced their departure would present a significant risk to the business.

Whether it’s streamlining processes or embracing tech, AI tackling inefficiencies will free up time, money, and energy to focus on higher value and much more interesting and rewarding activities.  Plus, this will positively impact your ability to attract and retain good people.

3. Cash flow: the lifeblood of resilient businesses

Cash flow is always a hot topic, and for good reason. The Barometer found that 34% of businesses listed cash flow as one of their biggest pain points (p. 14). With rising costs and fluctuating demand, whilst balancing the need to invest for future growth cash flow problems can feel like the constant shadow over your business.

I am singing from the same hymn sheet as Cathy Sayer, CEO FBA:

Those of you that know me are aware that finance is my background. A CFO of large private family business for 15 years, now consulting to private and family business, and delivering training in financial literacy to business owners, directors and leaders.

Whilst I continue to be astounded by how many business owners don’t have a good grip on their numbers; it’s so common that it doesn’t surprise me anymore!

Monitoring and managing cash flow is non-negotiable

My 3 key pieces of advice:

i. Watch your numbers

It’s not about crunching numbers once a year—it’s about keeping a close eye on the financial health of the business all the time.

• What do you need to know daily, weekly, monthly?
• Know what your critical numbers are and compare to what they should be.
• Cash is king, but you also want to monitor the P&L, and keep an eye on the liabilities in the balance sheet.
• Make informed decisions quickly.

 ii. Get a good accountant

A good accountant will pay for themselves many times over. They will protect your interests as an owner and director ensuring compliance with all legislation and statutory requirements.

What I see frequently is that the calibre of the finance team has not kept pace with the growth of the business.  The dangers of which are that things start to slip between the cracks, the owners don’t have the full picture and aren’t alert to the risks.  An inexperienced and/or unqualified accountant doesn’t know what they don’t know and could be over-reliant on the external accountant.  The external accountant isn’t in your business every day and there could be a lot about your business that they are not aware of.

A good accountant will be pro-active. Ideally you want them to be your right-hand person.  They will bring things to your attention, enabling you to make timely and informed decisions, driving efficiencies in your business. Using technological advancements, they will be pushing for automation to free up time so they can work with you on strategic and growth initiatives.

iii. Make sure you’re not trading whilst insolvent

Remember if you’re a Director you’re responsible for not trading whist insolvent. This is a 24/7 responsibility and can’t be delegated. Are you on top of your numbers well enough to know your real financial position?

4. Succession planning: for a business that is resilient beyond the current generation

Succession planning can be one of the toughest aspects of family business life. The Barometer found that 37% of respondents mentioned succession planning as a major concern (p. 7). This isn’t just about who’s taking over; it’s about keeping the family legacy alive and ensuring the business stays strong for generations.

Succession planning always comes up as a hot topic when we talk about family business. But as Catherine alludes to, it’s about more than who is going to step into the hot seat when Dad decides to retire. It’s a way of thinking. Succession Thinking is about setting the business up so that it can continue to thrive without the current owners /family members needing to be in the business.

The words Catherine uses resonate with me and the work I do as an adapt business coach:

• “define your values”. I’ll add to that vision. The starting point is for the current owners to work out what they really want for themselves, their family and other stakeholders. What legacy do they want to leave. Vision and values can capture this.
• “have a strong tribe”. Ask yourself – Who are going to be the leaders of the future and what are you doing to develop them?
• “document everything”. Ask yourself – What knowledge will walk out of the door when all those long serving staff retire? How is knowledge captured and transferred? What are the systems that are reducing reliance on key people?

It’s never too early to start succession thinking. Frequently it’s too late.

I’m working with a 2nd generation family business owner at the moment whose sons are working in the business but not his daughter. His number 1 priority is that the family remains united. That the business does not come between the family. He has started the journey of getting everyone talking, defining roles, and giving the next generation time to step up, gain experience, and get comfortable holding the reins whilst most importantly managing the dynamics of the family.

Thriving across generations

Running a family business is hard. It has all of the challenges of running any business compounded by the complexity of emotions and relationships that exist within all families.

Reading the insights from the 2025 Family Business Barometer Survey may help you realise you’re not alone. Most family businesses in Australia are facing similar challenges.   I think it’s a good read. It’s easy to digest and contains some good advice.

Read more

If you’d like to dive deeper into the insights from the 2025 Family Business Barometer, check out the full article here.

If you think I might be able to bring some value to your family business, I would love to hear from you. Please contact me.