Insight

Facing the future as an Australian family business

Kirstin Stewart
By:
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Quick summary
  • Succession planning remains a major challenge for Australian family businesses, with only 19% having a documented plan despite an experienced next generation ready to lead.
  • Economic uncertainty, market competition, and family conflict are pressing threats, highlighting the need for strategic and relational resilience.
  • Reframing succession as a collaborative evolution, supported by strong governance, can empower both generations and secure long-term success.
The 2025 Family Business Report explored the mindset of Australian family business leaders as they navigate an increasingly complex and uncertain landscape.
Contents

While the top challenges varied between incumbent leaders and the rising generation – ranging from staffing and cashflow to succession planning – there was notable alignment with the broader threats identified in the survey. 

Across all respondents, the most pressing threats included economic downturn (40%), market competition (29.6%), family conflict (22.4%), and lack of succession planning (22.4%). This overlap reinforces how succession planning and economic uncertainty are not only generational concerns but also systemic risks facing the sector as a whole.

Report
Family Business Report 2025
Read more
Family Business Report 2025

Why succession planning remains a challenge

Succession planning stands out not only as a perceived threat but also as the most cited challenge across the broader survey findings. Despite its critical importance, only 19% of family businesses currently have a documented succession plan in place. This gap is especially concerning given that nearly a third of the rising generation are aged between 45 and 64. These individuals are experienced, capable, and ready to lead, yet many remain in waiting due to emotional and strategic hesitations.

Succession is often equated with retirement, which can evoke fear and uncertainty. Many business owners have their wealth tied up in the business, making it difficult to envision stepping back without compromising their lifestyle or legacy. Additionally, a lack of clarity about life after leadership can make the idea of transition feel more like a loss than an opportunity.

Reframing how we think about succession                      

Often, succession planning is thought alongside retirement. However, family businesses should be encouraged to reframe succession as a strategic evolution rather than an endpoint. This means shifting the narrative from ‘stepping away’ to ‘stepping aside’, allowing the next generation to lead while enabling incumbents to remain involved in meaningful ways, such as mentoring, strategic oversight, or project-based contributions.

Governance is critical

Governance frameworks also play a vital role in this transition. The report shows a positive trend in the adoption of family charters, advisory boards, and external advisor engagement. These structures help families align on values, clarify roles, and foster trust across generations. However, the data also reveals a decline in core business governance practices, such as shareholder agreements and strategic plans. This suggests that while families are investing in relational governance, they must also maintain focus on commercial resilience.    

Family businesses thrive when they address both the commercial and relational dimensions of succession. By combining robust governance with strategic planning, families can mitigate risk, unlock leadership potential, and build a legacy that endures.

We’re here to help

The future of family business lies not just in weathering external storms, but in navigating internal transitions with clarity, compassion, and confidence. We can help guide your succession journey – ensuring that both generations are empowered to lead, collaborate, and succeed together. Please reach out to one of our family business experts today.

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Learn more about how our Family business consulting services can help you