Family businesses employing half of Australians are stretched, says new report

Australia's family businesses are being stretched by mounting commercial pressures, despite remaining committed to growth, investment and the next generation, according to the 2026 Family Business Barometer.

Family businesses account for an estimated 70% of Australian businesses and employ around half of the Australian workforce, making the health of this sector critical to Australia's economy.

The research, conducted by Family Business Association and supported by Pronto Software, found 66% of respondents were losing sleep over profitability, margins or cash flow.

The cost of doing business was the leading barrier to growth, nominated by 64% of respondents, followed by inflation and rising input costs at 50%. Finding suitably skilled staff was identified as a barrier by 40%, while 40% said compliance and regulatory burden was keeping them awake at night.

Family Business Association CEO Catherine Sayer said the findings showed a sector that remained strong but was absorbing pressure on multiple fronts.

"Family businesses have always been resilient because they think long term, invest through economic cycles and carry a deep responsibility to their employees, families and communities," Ms Sayer said.

"But resilience should not be mistaken for an unlimited capacity to absorb rising costs, increasing compliance and ongoing uncertainty.

"The concern is that more of their time, money and management capacity is being consumed simply dealing with the pressures of today."

Despite the challenging operating environment, family businesses are not retreating from long-term ambitions.

Over the next five to 10 years, 64% want to provide financial security for future generations, 51% want to protect and build their family legacy, 45% want to strengthen leadership teams, 41% want to integrate artificial intelligence and 40% want to enter new markets.

Ms Sayer said this exposed an important contradiction for policymakers.

"At the same time as we are talking about productivity, innovation, technology and skills, many family businesses have less capacity to invest in exactly those areas," she said.

"Tight margins do not just affect this year's profit. They affect whether a business can invest in new systems, develop future leaders, expand into new markets or prepare properly for succession."

The report also found family businesses were not well recognised in economic data or policy development, despite the impact policy decisions can have where ownership, family wealth, succession and business operations are closely connected.

"There is an assumption often made by governments that family businesses are small businesses, and they're not," Ms Sayer said.

"They are small, medium and large businesses, and they deserve policy that reflects that."

Family Business Association is calling for:

• Appointment of dedicated family business ministers in each state and territory, acknowledging that South Australia, Queensland and Victoria have led the way
• better collection of family-business-specific economic data, so the sector's contribution and policy impacts can be properly measured
• earlier consultation with family businesses when major policy and regulatory changes are developed, for example the impact on proposed legislative changes in relation to discretionary trusts
• greater consideration of the cumulative burden of regulation and compliance

"This is not a story about a sector in decline," Ms Sayer said.

"It is a story about businesses that still have the appetite to invest, innovate and grow, but are increasingly stretched by the environment around them.

"The opportunity is to remove unnecessary barriers and give one of the largest and most enduring parts of our economy the capacity to keep building for the next generation."

The 2026 Family Business Barometer: Ambition Under Pressure is available for download here: https://familybusinessassociation.org/family-business-barometer

-ENDS-

Notes to Editors

Key statistics

• Family businesses: estimated at 70% of Australian businesses and estimated at 75% of New Zealand businesses
• Employ around 50% of Australia's workforce and about 75% of New Zealand's workforce
• 66% losing sleep over profitability, margins or cash flow (2026 Family Business Barometer Report)
• 64% cite cost of doing business as their #1 barrier to growth (2026 Family Business Barometer Report)
• 64% want to provide financial security for future family generations (2026 Family Business Barometer Report)
• Only 27% have a formal succession plan in place (2026 Family Business Barometer Report)
• Family-owned businesses are the most trusted business type globally (Edelman Trust Barometer, 2024)

Interviews

Media interviews are available with Catherine Sayer, CEO, Family Business Association upon request. Please contact Oakley Grioli.

Media contact

ZADRO

Oakley Grioli, Senior Account Manager

oakley@zadroagency.com.au | 0434 295 302