Australia (Commonwealth)_In Australia, family businesses play a pivotal role in the economic landscape, constituting more than 1.4 million enterprises, which represent a substantial 70% of the nation’s businesses. A recent survey by leading accounting and business advisory firm, Grant Thornton Australia, sheds light on the dynamics of these family businesses, drawing insights from over 280 business owners, CEOs, and key decision-makers. The survey, focused on crucial themes such as leaving a legacy, future growth, and embracing diversity, reveals key challenges and opportunities facing this vital sector.
Economic uncertainties, driven by increased costs, rising interest rates, and high inflation, have emerged as significant concerns for 91% of family businesses surveyed. Foremost among these challenges is the imperative to improve cash flow. Moreover, 86% of respondents express apprehension about recruiting, retaining, and upskilling family members and employees amid economic uncertainties, potentially leading to workforce reductions.
Succession planning emerges as the third most important issue, with 71% of family businesses acknowledging its significance. Notably, 81% of these businesses are actively working on or have established a succession plan. The survey reveals a shift in generational mindsets, with third-generation family firms (67%) viewing themselves as stewards for the business, emphasizing continuity and legacy.
While growth remains a focal point for Australian family businesses, the survey indicates underutilization of available resources, with many businesses deeming government support unimportant for their growth strategies. However, 53% emphasize the importance of accessing funding in the next 24 months, and 47% contemplate acquisitions in the same period.
The survey underscores a connection between innovation, sustainability, and growth, with 62% of businesses perceiving a positive impact of ESG and sustainability strategies on operations. However, obstacles such as perceived costs (34%) and lack of clarity (31%) hinder broader adoption of sustainability practices.
Diversity, both in terms of gender and strategy, remains an untapped opportunity, with 76% of family businesses lacking a gender diversity strategy. Yet, there is a potential shift, as 67% of respondents aged 18 to 24 express an interest in developing diversity strategies.
In conclusion, the Grant Thornton Australia 2023 Family Business Survey emphasizes the need for alignment across generations, effective succession planning, and the integration of sustainability goals to unlock the full growth potential of family businesses in the country.
