More than half (55%) of Scottish small to medium enterprises (SMEs) anticipate growth in their business over the next year, according to new research. Confidence and optimism have dipped slightly compared to 2024. The findings came from the second annual Business Baseline survey, conducted by the Improvement Service on behalf of Business Gateway and partners. The survey gathered responses from over 500 SMEs, entrepreneurs and business owners across Scotland. The objective of the Business Baseline survey is to gain insight into the opportunities and challenges faced by Scottish businesses, as well as the types of support they may require. Two new questions were added this year, covering respondents’ views on Scotland’s economy and innovation and technology in their business. Key Findings: 55% of SMEs expect growth in the next 12 months Business confidence drops from 74% to 67% Only 25% feel confident in Scotland’s economy Concern over political and regulatory conditions rises sharply to 40% 58% expect to need business support and 34% financial support Fair work adoption and environmental planning fall year on year Growth Expectations Remain Steady But Confidence Weakens The survey found that 42% of businesses expect moderate growth over the next year, with an average anticipated growth rate of 36%. Businesses in the education, training and HR sectors were the most optimistic, with 68% predicting growth, while sectors such as construction and food and drink reported lower growth expectations than last year. Overall, 67% of respondents expressed confidence in their business prospects over the next 12 months, down from 74% in 2024. Reduced confidence was more common in businesses that have been trading for a longer period. When asked about the wider economy, businesses were more cautious: only a quarter felt confident in Scotland’s economy and only 16% agreed that Scottish businesses are well prepared to meet future challenges. Rising Costs And Political Uncertainty Remain Dominant Pressures The survey shows that rising costs continue to be the biggest challenge, cited by 63% of respondents, while political uncertainty and regulatory changes were highlighted by 40%, up from 25% in 2024. Food and drink businesses in particular saw a substantial increase in political concern. Demand For Support Persists Financial and business support remain key needs for Scottish SMEs: 34% expect to need financial support 58% anticipate requiring business support Pre-start businesses are the most likely to need financial assistance (56%) Grants remain the most common type of financial support sought (61%). Business Gateway strengthened its position as the most likely source of business support, rising 25% to 78%. Over half of respondents (56%) expect to increase their prices, although more anticipate prices remaining stable than in last year’s survey (35% vs 30%). Innovation Welcomed, But Tech Adoption Remains Uneven This year’s survey included new questions on innovation and technology. Most SMEs see innovation as vital to their future growth (65%) and half say they are embracing new technologies, including AI. However, 58% say they could do more and almost a third disagree that they are currently using the latest technologies. Environmental And Fair Work Measures Decline Environmental and fair work practices saw a slight decline: 47% of businesses had plans in place to reduce environmental impact, down from 55% in 2024, with food and drink leading at 70%. Similarly, 63% of businesses reported adopting fair work measures, compared to 74% last year. Councillor Gail Macgregor, Chair of the Business Gateway Board, said: "The 2025 Business Baseline survey highlights the resilience and adaptability of Scotland’s SMEs. While confidence and growth expectations have softened slightly compared to last year, it is clear that business owners remain focused on growth, innovation and building sustainable practices." "Challenges such as rising costs, regulatory uncertainty and political pressures remain, but SMEs are showing remarkable determination to navigate these." "It is vital that they continue to have access to practical guidance, financial support and expert advice to help them thrive in the year ahead." The full Business Baseline report can be accessed here

As 2026 approaches, family businesses find themselves standing at a decisive moment in their long histories. The turbulence of the early 2020s has fundamentally altered the global business environment, pushing digital transformation into overdrive, intensifying geopolitical uncertainty and raising expectations around sustainability and social responsibility. Family firms have traditionally been seen as islands of stability within volatile markets, but the year ahead will demand an even greater level of focus, resilience and strategic foresight. The characteristics that have sustained them for generations, stewardship, long-term thinking and deeply rooted values, remain potent strengths, yet the pressures they now face are far more complex and far less forgiving. Understanding these new realities is essential for shaping a coherent agenda for 2026. Economic Uncertainty and Margin Pressure Economic uncertainty remains one of the most pressing concerns for family firms. Volatile interest rates, fluctuating energy prices, persistent inflation and unpredictable consumer behaviour continue to squeeze margins across virtually every sector. Manufacturing, retail and hospitality businesses are particularly vulnerable, caught between rising operational costs and customers unwilling or unable to absorb higher prices. Access to affordable finance has tightened, placing renewed emphasis on cash flow management and prudent budgeting. Meanwhile, consolidation across many industries means that competitive pressures are escalating. For family firms committed to high-quality products, fair employment practices and values-driven operations, protecting profitability without compromising their principles is becoming a delicate balancing act. Succession Pressures Intensify Succession, long a complex and emotional issue in family enterprises, is emerging as a more urgent challenge. Many founders who postponed retirement during the pandemic years are now stepping back, often without a clear or prepared successor. Younger family members increasingly approach leadership with different expectations, prioritising work–life balance, purpose-driven decision-making and professional governance. Families are therefore facing difficult questions about who should lead, how transitions should be managed and whether external management might provide the expertise required for future growth. The risk of leadership vacuums or rushed appointments is higher than ever, making succession planning an essential, strategic responsibility rather than a private family matter. Governance in a Complex World Governance, too, has become considerably more complex. As family firms expand, diversify or operate across multiple jurisdictions, informal decision-making structures have become insufficient. Stakeholders, including regulators, banks, investors and employees, now expect transparency, accountability and robust oversight on a level comparable to publicly listed companies. Many family businesses are therefore recognising the need to establish or strengthen advisory boards, bring in independent directors and update shareholder agreements to reflect modern family dynamics. Risk management frameworks must evolve as well, particularly in response to cyber threats and regulatory obligations. Professionalising governance no longer means surrendering entrepreneurial spirit; rather, it is becoming essential to preserving it. Digital Transformation: From Optional to Existential Digital transformation, once viewed as optional or disruptive to traditional ways of working, is now existential. The pace of technological advancement, driven by AI, automation, advanced analytics and rising customer expectations, is reshaping business models at astonishing speed. Yet many family firms continue to rely on legacy systems or instinct-driven decision-making. Modern businesses require updated systems, robust cybersecurity and a workforce confident with digital tools. The challenge is to integrate new technologies without erasing the personal touch, heritage or craft that make many family firms unique. Those who view digital transformation as an enabler rather than a threat are better positioned to thrive in the future. Attracting and Retaining Talent Talent remains another significant pressure point. Employees, particularly younger professionals, are demanding more meaningful work, clearer development opportunities and greater flexibility. Family businesses have long benefited from loyal workforces and a strong sense of belonging, but they now face competition from remote-first employers and global companies recruiting without geographic restrictions. Hybrid working has become an entrenched expectation, while younger generations are unwilling to accept slow, opaque career progressions. To remain employers of choice, family firms must invest in training, articulate compelling career paths and make their purpose clear, visible and relevant to employees across all levels. Rising Sustainability Expectations Sustainability expectations are rising just as quickly as regulatory obligations. Governments across Europe, the UK and Asia are tightening requirements around carbon reporting, supply-chain transparency and environmental responsibility. Consumers, too, are increasingly intolerant of greenwashing and quick to favour businesses with authentic, measurable commitments to sustainability. For family firms, whose meaning and legacy often span generations, this shift represents both a challenge and an opportunity. Embedding sustainability into strategy is no longer a moral aspiration; it is a business imperative that affects competitiveness, reputation and access to future markets. Geopolitical Volatility and Operational Risk Geopolitical volatility is adding another layer of complexity. Trade tensions, shifting global alliances, regional conflicts and politically motivated market barriers are reshaping supply chains in real time. Family firms that once relied on stable import–export routes or single-source suppliers are being forced to rethink their entire operational models. Many are exploring near-shoring, building multi-supplier arrangements or investing in more sophisticated logistics forecasting to mitigate sudden disruptions. Resilience is no longer about weathering storms, it is about redesigning business systems to remain functional amid constant change. The 2026 Strategic Agenda Given these challenges, the strategic agenda for family businesses in 2026 must be both focused and ambitious. Financial discipline needs to be strengthened, with firms rebuilding cash reserves, reassessing debt exposure and evaluating all investment decisions through both short-term and long-term lenses. Succession should be approached as a strategic, multi-year programme involving leadership development, external experience for future leaders, and clarity around the distinction between ownership and management. Governance must continue to evolve, ensuring transparency, accountability and well-defined decision-making processes that reflect the complexities of modern markets. Digital capability should become a central pillar of strategy, not an afterthought. Firms need to modernise their core systems, embrace AI and automation where they add real value, and invest in digital thinking across their workforce. At the same time, the family firm’s reputation as an empathetic, human-centred employer should be cultivated deliberately. This means creating modern working conditions, offering credible development pathways and expressing purpose in a way that resonates with diverse and multigenerational teams. Sustainability must also move from aspiration to execution, with measurable targets, transparent reporting and a commitment to innovation rather than compliance alone. Finally, supply-chain resilience should become a long-term priority as firms redesign their networks to cope with geopolitical unpredictability. Owning the Family Advantage Ultimately, the opportunity for family businesses in 2026 lies in leveraging the advantages that have long defined them. Their long-term stewardship, strong values, patient capital and authentic leadership are rare qualities in today’s short-termist corporate landscape. If they embrace the required transformation with confidence rather than hesitation, family firms will not only meet the challenges ahead—they will set the standard for what stable, meaningful and responsible business leadership looks like in an uncertain world.

As many family-owned businesses across the UK brace for the generational handover of leadership, the idea of a Management Buy-Out (MBO) is fast gaining traction as a viable, and increasingly necessary, alternative to traditional succession. According to Paul Andrews, Founder and CEO of Family Business United, the coming years could see a marked increase in such internal buyouts. With changes to inheritance‑tax rules and widespread uncertainty about long-term viability under older‑generation ownership, he believes the next wave of transitions may not necessarily mean handing the reins to a younger family member — it could mean handing them to the management team. In a recent FBU report on what lies ahead for family firms, Andrews acknowledges that from April 2026 new tax rules will remove much of the certainty surrounding inheritance and the transfer of business ownership and create uncertainty and complexity as a result. “Planning has never been more important,” he says, urging families to initiate conversations sooner rather than later. Given this uncertainty, many owners may look to sell, not to external competitors, but to those already running the business day to day. An internal buyout offers several advantages. From a human perspective, it may ease generational tension: management often comprises those who already know the business’s operations, culture and people intimately. For families who lack a ready next-generation leader, or for whom next-gen interest is lukewarm, an MBO offers continuity, retention of institutional memory and a smoother transition than handing over to inexperienced heirs. Over the past few years, as many as 43% of family firms surveyed by Family Business United reported that they expect a leadership transition within the next five years. Still, Andrews stresses that such buyouts must be approached with care. Family firms are defined not just by their financial performance but by shared values, long-term thinking and often a sense of stewardship, ideals that can be lost if the wrong management team takes over. For this reason, he argues that the decision to pursue an MBO should come from a place of strategy and shared vision, not merely short-term pressure. “If a management buyout is handled well,” Andrews suggests, “it can deliver a future for the business that preserves legacy while adapting to the financial and regulatory realities of the modern era.” Yet, he cautions, it would be wrong to assume MBOs will be the easy option. They require realistic valuations, transparent communication, fair terms and often a willingness among senior family shareholders to step back — emotionally as much as practically. “The opportunity is there,” he says, “but it demands honesty, discipline and a genuine commitment to what the business stands for.” In a climate of rising tax burdens and economic headwinds, MBOs, once a niche route, may soon become a mainstream succession tool for family firms wanting to stay in the family, but not strictly in the bloodline. And with thoughtful planning, 2026 could mark the beginning of a structural shift in how Britain’s family-owned businesses manage their future.

National Apprenticeship Week (NAW) 2026 will run from Monday 9 February to Sunday 15 February, uniting employers, apprentices, educators, and training providers in a nationwide celebration of the value and impact of apprenticeships. This year’s theme, 'Skills for Life' and will spotlight how apprenticeships equip people with essential, long-lasting skills while helping businesses build a strong and sustainable workforce. Family Business United is delighted to be supporting the NAW 2026 and will be showcasing the investment that family firms across the UK are making in apprentices. New figures from the 2025 Family Business Apprentice Employers Report, published by Family Business United (FBU), underscore the significant contribution of family-owned firms to the UK’s apprenticeship landscape. According to the report, the UK’s top 24 family business apprenticeship employers currently support 776 apprentices, with 369 new apprentices joining and 354 completing their programmes in the year to June 2025. Paul Andrews, Founder and CEO of Family Business United, expressed his enthusiasm for supporting this year’s NAW: “Family businesses are the engine room of the national economy and a significant number of family firms invest in apprenticeships." "Apprentices add a lot of value, fill vital skills for the future and represent the next generation of the workforce. They make a tangible difference each and every day, and it is great to see so many family firms providing career opportunities through apprenticeships too.” “Across the UK, apprentices play an essential role in driving innovation, growth and resilience within businesses of all sizes. Their dedication and fresh perspectives strengthen organisations, support local communities, and help ensure that the UK maintains a skilled workforce ready to meet the challenges of tomorrow. It is also exciting to see a growing number of board members and directors of family firms who started out as apprentices, rising through the ranks to senior positions too, a clear demonstration of the long-term investment these firms make in their people." As part of NAW 2026, Family Business United will launch a national campaign to showcase the diverse range of apprentices working within family-owned firms across the country. The campaign will highlight individual success stories and the vital contributions apprentices make within their organisations. Family firms wishing to take part are invited to share details of their apprentices—including name, role, the benefits they bring to the business, and a short quote from the apprentice—to be featured in the campaign. Simply use the contact us form to find out more.

National painting contractor, Bagnalls, has triumphed at the National Apprenticeship and Skills Awards 2025, winning The Aptem Equality, Diversity and Inclusion (EDI) Award. Having previously been named as the regional winner of this accolade for the Yorkshire and Humber area, Bagnalls has come out on top again, this time as the overall national winner. The awards themselves, organised by the Department of Education, receive over 1,100 entries every single year. These submissions come from both companies and individuals across a range of sectors, including construction, IT, science, healthcare and many more. This placed Bagnalls in direct competition with various household names, including supermarket giant, Tesco and construction heavyweight, Kier Group, both of which were Highly Commended within the Equality, Diversity and Inclusion Award category. Designed to champion and reward the achievements of exceptionally talented and dedicated apprentices and T Level students, the awards also recognise the support and efforts of apprenticeship and T Level employers. Stephen Bagnall, Group Managing Director at Bagnalls, commented: “We are honoured to have been named National Winner of The Aptem Equality, Diversity and Inclusion Award, especially as the National Apprenticeship and Skills Awards celebrates its 22nd anniversary!" “EDI is incredibly important to us as a company, gifting us with a varied team that has the skills and experience to tackle whatever comes our way! Plus, with a significant number of our management team beginning their careers with us as apprentices, our apprenticeship scheme remains one of our most important and rewarding assets.” Bagnalls’ Group People Director, Ellie Jobes, said of the win: “This award is a wonderful recognition that all of our Bagnalls branches are working together to promote apprenticeships across a diverse audience." “We have seen a particular impact in increasing number of female painters, as well as supporting those joining the industry from low-income backgrounds. I want to say a huge thank you to all of our colleagues who work tirelessly every day to make sure that our apprentices have a positive experience working for Bagnalls.” Find out more about Bagnalls’ apprenticeship scheme and why the company is so passionate about supporting the next generation of young talent entering the painting and decorating industry.

After more than two years of commissioning, Robinsons Brewery have completed their £8.4 million investment in their new brewery. The announcement comes after the family brewers shared that test brewing had begun at their new brewhouse earlier in the year. Reflection on the transition, Oliver Robinson said, “It was a big decision to move our brewhouse from Stockport town centre after more than 185 years and six generations of brewing history. However, we had to look to our future and ensure our business is sustainable for our future generations. Our business has evolved over the years, and this has meant we have adapted our brewing operations to ensure a viable future for our brewing”. Brewing remains vital to Robinsons business plans, with cask beer production and sales bucking the industry trends. Across Robinsons pubs sales of cask beer are five times the on-trade average making up 28% off all beer sales. Having consolidated their brewing and packaging onto one site, Robinsons have already made great energy savings in gas, electric and water usage. The new brewhouse, which has been fully commissioned since March, has already seen the brewery’s energy consumption drop by 12%. Oliver went on to say, “The efforts of the teams involved in this project has been incredible. From our property team, and the external contractors; to the dedication and passion of our Project Brewing team, who have been heavily involved right from the start. It has been a huge investment and of course not without its logistical challenges, but to be in the position we’re in now, it really is testament to the knowledge and commitment of our team." "The way the wider brewing and production teams have come together this year, to learn and operate the new brewhouse also deserves a mention. It’s a big change to have undergone for our brew teams, some of whom have been with us for over 40 years – but they’ve embraced it. We’ve got a fantastic amount of brewing experience within the business and we’re incredibly proud of that. The experience of our team has ensured the beer quality remains excellent, and the change has gone unnoticed by our customers, to that we owe great thanks.”

Hospitality and service industry businesses could face fines and the prospect of an employment tribunal if they don’t comply with the Tipping Act, two experts have warned. The Employment (Allocation of Tips) Act 2023 rules that employers must pass on all tips, gratuities and service charges to workers without deductions. This Act impacts more than two million workers including those who work in restaurants, bars, retail shops, hairdressers, taxi firms, beauty parlours, and many more. Specialists at UK top 10 accountancy firm Azets, have issued the warning prior to the festive season when more tipping is likely in the busiest period for the hospitality industry. It also comes ahead of proposed changes due to come into force next year which will tighten legislation even further. H-J Dobbie, Head of HR Consultancy, and Julie Gunnell, Associate Director of Growth Payroll at Azets, the UK’s specialist business advisor to SMEs, have combined to offer guidance to employers. Julie Gunnell said: “This Act has now been law for a year and employers are obliged to discharge their responsibilities fairly and pass on 100 per cent of all tips to hard-working staff who earned then." “If not, staff can hold bosses fully accountable by bringing a claim to an employment tribunal, and this could lead the minority of businesses who continue unacceptable tipping practices being made to pay fines or compensation.” Looking ahead to 2026, the Government has confirmed measures to enhance current tips laws will come into effect from October 2026 if the Employment Rights Bill becomes law. The proposed changes are: Employers will be required to consult with workers or their representatives before creating a tipping policy, which in reality means that most employers will have to revisit their current tipping policy. Employers will be required to update their tipping policy every three years. H-J Dobbie said: “We know that the vast majority of employers are fully supportive of the Tipping Act, not least because it properly rewards dedicated, deserving and often low paid staff, but also because it builds trust with customers who are more likely to tip if they can be sure of its ultimate destination." “When it comes to the Tipping Act, employers should use a clear and objective set of factors to determine the allocation and distribution and ensure that they give due consideration to all workers involved in providing service to customers, including temporary, zero hour and agency workers to avoid discrimination, but not the genuinely self-employed." “Record-keeping is also a requirement, and the employer must create a record of how every qualifying tip has been dealt with, detailing all qualifying tips received by the employer at the place of business, and the amount allocated to each worker. Records must be kept for a period of three years beginning with the date on which the qualifying tip was paid." “Workers can make a written request to view their employer’s tipping record for a period dating back up to three years, provided they worked for the employer for the full duration of the requested period. They can only make one request in any three-month period, and an employer must provide its tipping record within four weeks.” The Government has produced a Code of Practice on the Tipping Act which is available as a free resource. It provides overarching principles on what fairness is for the purposes of the law, the areas in which employers need to make decisions to comply with their duties, and how they should apply these principles in their specific places of business. Key points include what are qualifying tips, employer-received tips, worker-received tips, digital tipping, ‘out-of-scope’ tipping, non-monetary tips, how a place of business is defined, the fair (not necessarily equal) allocation of tips, and timescales for the payment of tips. For more information, visit the Government website here

Most senior executives and employee reward and benefit leaders across privately-owned and publicly listed UK-based companies are already making good use of employee benefit trusts (EBT), reveals new research* from Ocorian , the specialist global provider of services to corporates – but the majority believe they will need additional external support for employee incentive plans in the near future. Nine in ten (90%) of senior executives and employee reward and benefit leaders feel that their company is using its EBT effectively, compared to just one in ten who say they aren’t. The study from Ocorian reveals which particular benefits of EBTs employers are using most. More than nine in ten (93%) respondents say their company uses EBTs to hedge their future commitments to deliver shares to employees, and 95% say they’re being used effectively to manage the administration and costs of major vesting events. When it comes to using their EBT for off-market purchases, over half (58%) of senior executives and employee reward and benefit leaders say they already do this. The remaining 42% say they have considered doing so. However, Ocorian’s UK study reveals that companies are looking for extra support when it comes to managing their employee incentive plans. Almost three quarters (72%) of senior executives and employee reward and benefit leaders admit that their company currently outsources all administration support for their employee incentive plans externally, compared to around a quarter (26%) who manage this internally. But this is set to grow with over three quarters (78%) of respondents predicting that their company’s use of external support will increase over the next two years, including 25% saying there will be a dramatic increase. This compares to 18% who say it will stay the same and just 3% predicting less use of external support. The main reason for using external support to operate their company’s employee incentive plan is to improve the service levels for participants in the plan. Keeping costs down, and the additional functionality of providing a portal for participants were the second and third reasons. The fourth benefit given was that for many organisations, the sheer size of the plan means that external support is necessary in order to effectively manage and run the plan. Brendan Dowling, Head of Employee Incentive Services, Ocorian said: “Our new research indicates that senior executives and HR leaders are clearly getting it right when it comes to maximising the potential that employee benefit trusts can bring, but are seeking extra professional support and advice when it comes to employee incentive plans." "They understand the benefits that these programs can bring, but operating them in an efficient, resource-effective way can be challenging for in-house teams. At Ocorian, we have a dedicated team with a depth of knowledge and technical expertise that can ease the burden of administering employee incentive schemes.”

Carruthers and Jackson , one of the leading global data consultancies and part of the Praesto Group, has today released their latest Data Maturity Index which identifies soaring AI use but issues around employee data literacy. The 2025/26 Data Maturity Index found that most organisations exist in something of a mid‑maturity data plateau, characterised by pockets of progress alongside worrying areas of stagnation. The annual poll of over a hundred global data leaders highlighted the proliferation of AI tools. 40% said that AI is now being used by a high number of employees, either across their whole organisation or in certain departments (up from 21% in 2024). For the first time, no respondents said that AI is not being used at all. However, despite this increase in AI use and dependency, there is no progress being made in bridging the gap on data literacy. 58% of data leaders reported that most of their employees are not data literate, and a further 3% said almost no employees are data literate in their organisation. When asked about the obstacles to achieving better data literacy, the most cited topics were a perceived lack of leadership buy-in, a lack of time and resources, deep-rooted cultural resistance, and poor access to appropriate training. Caroline Carruthers, Co-Founder and Chief Executive of Carruthers and Jackson said: “There is an urgent need to invest in people to unlock the true potential and value of data and these AI tools." "Organisations appear to be embracing tools and technology to help leverage the power of data but unlocking the transformational potential needs to be considered through a more human lens.” In other report findings, 28% of responding organisations said they still have no data strategy. There was also a clear trend towards more of a department-specific approach to data governance and frameworks, with 42% of data leaders saying they have adopted multiple different approaches across their organisation. 36% said there is still little or no data governance framework in their organisation. Though the marginal year-on-year decrease (39% in 2024, 41% in 2023) points towards greater maturity, there remains a large proportion of organisations operating without a framework. Caroline Carruthers added, “Organisations like this could soon find themselves stuck in something of a data ‘black hole’ in which they are unable to maximise the potential of their data while being exposed to significant risks. As we see a continued trend for organisations having multiple governance approaches and frameworks, it may make it even more difficult to develop and maintain a cross-business strategy and navigate out of this sticky situation.” “This will become even more stark as we enter the ‘second coming’ of data. Whereas major discussions about organisational approaches to data were once shaped by GDPR, now we’re seeing strategic conversations that are less about ‘how to be compliant’, rather, they are centred around more purpose-driven topics. Where do we want to go with our data? Why? For whom? And to what end?” “Organisations that want to convert AI into value must stabilise their data foundations: fix quality and integration gaps, make governance practical and lightweight, and invest in role‑specific literacy and operating models that embed analytics into decision workflows." "Without those steps, organisations will continue to live on the mid-maturity plateau, if not slip backwards.”

Family businesses form the backbone of many economies, often admired for their long-term outlook, entrepreneurial spirit, and deep sense of stewardship. Yet, the very qualities that make them resilient, family loyalty, shared history, and collective identity, can also pose challenges when personal dynamics spill into strategic decision-making or when generational shifts blur the lines of authority. To thrive across generations, family firms increasingly adopt robust governance structures that balance emotional ties with professional discipline. Good governance does not dilute the family’s influence; rather, it channels it constructively to support sustainable growth. At the heart of this approach lie several foundational pillars. 1. Clear Purpose and Shared Values A defining advantage of family businesses is their ability to anchor decisions in a shared purpose. But as families grow and branches multiply, assumptions about what the business stands for can diverge. Good governance begins with articulating: A unifying vision for the enterprise Core values that guide behaviour Shared expectations around growth, risk, and legacy Many leading family firms conduct structured values-clarification workshops or create a family charter to capture these principles. This document becomes the moral and strategic compass for both family members and non-family executives, ensuring that cultural continuity is not left to chance. 2. Formalised Family Governance Structures Family governance provides the forum through which relatives engage with the business in an organised and constructive manner. Without formal platforms, discussions tend to occur informally—often around dining tables—creating potential for confusion and conflict. The cornerstone structures typically include: Family Assembly : A broad gathering where the entire family is informed, educated, and connected to the business’s progress. Family Council : A representative body that acts as the interface between the family and the business, shaping policies on ownership, employment, communication, and philanthropy. Family Constitution or Charter : A living document outlining agreed-upon principles, such as succession rules, share transfers, dispute-resolution mechanisms, and family employment criteria. These structures professionalise the family’s role, reduce ambiguity, and promote unity. 3. A Competent and Independent Business Board A well-functioning board is essential for any business, but in family enterprises it plays an especially crucial role in balancing the influence of owners with the needs of the company. Best practice includes: Appointing independent non-executive directors, who bring objectivity, professional expertise, and a willingness to challenge assumptions. Defining a clear mandate for the board, separating operational oversight from day-to-day management. Ensuring board diversity, not only in skills but also in perspectives, particularly as the business navigates succession, digital transformation, or international expansion. Family members who serve on the board must do so based on competence and commitment rather than entitlement. 4. Transparent Decision-Making and Professional Management Transparency is the antidote to suspicion and misunderstanding. As family businesses transition from entrepreneurial to institutional, they benefit enormously from: Documented decision-making processes Professional management teams, with roles filled by the best-qualified individuals rather than relatives by default Clear role descriptions and reporting lines Regular performance reviews—for both family and non-family staff Some families adopt a “family member employment policy”, specifying qualifications, experience requirements, and evaluation criteria. This ensures credibility and protects the business from perceptions of nepotism. 5. Succession Planning as a Continuous Process Succession is often the most emotionally charged element of family business governance. Effective firms treat it as a long-term, iterative process rather than a last-minute event. Strong succession planning involves: Identifying leadership potential early Creating developmental pathways, such as external work experience or formal education Setting clear timelines and transition phases Maintaining open communication among generations Embedding contingency planning for unexpected events A transparent succession plan not only secures the future of the business but also protects family harmony. 6. Conflict Management and Communication Mechanisms Where there is family, there will inevitably be conflict. The difference between resilient family firms and fractured ones often lies in their ability to manage disputes constructively. Key governance tools include: Codes of conduct and communication guidelines Mediation or advisory committees Regular structured family meetings Education programmes for the next generation, building emotional intelligence, financial literacy, and leadership skills By acknowledging that conflict is natural, families can prevent it from becoming damaging. 7. Responsible Ownership and Stewardship Generational continuity hinges on cultivating responsible owners, not merely shareholders. Good governance encourages: Financial literacy training A clear understanding of ownership rights and duties Engagement in long-term strategic thinking A mindset of stewardship—leaving the business stronger for the next generation Family firms that foster collective responsibility tend to be particularly resilient during crises. 8. Sustainability and Social Responsibility Integration Family firms often view sustainability not as a corporate obligation but as a legacy ethic. Governance structures that explicitly embed environmental, social, and community commitments ensure: Consistency across generations Long-term risk mitigation Alignment with evolving societal expectations Boards increasingly adopt ESG frameworks, ensuring that sustainability is woven into strategy, reporting, and family values. The Future: Blending Tradition with Professionalism Modern family businesses are proving that tradition and innovation need not sit at opposite ends of a spectrum. By embracing professional governance structures, they preserve what makes them distinctive, long-term thinking, entrepreneurial drive, and deep-rooted identity, while equipping themselves for the complexities of contemporary markets. Good governance is not about bureaucracy. It is about clarity, fairness, and resilience. Ultimately, it empowers families to steward their enterprises with confidence, ensuring that both the business and the relationships behind it can thrive for generations to come.

If the first quarter of the 21st century has taught business leaders anything, it is that stability is no longer the norm, it is now the exception. Yet among the companies navigating this era of volatility, family businesses have shown a remarkable ability not only to survive but to evolve. In 2025, many family firms stand stronger and more future-ready than their corporate counterparts, shaped by a world that has tested their resilience, values, and adaptability. From geopolitical shifts to technological leaps, from social change to environmental pressure, family firms have had to learn swiftly and deliberately. Here are the most significant lessons their leaders have drawn from the world they’ve operated in during 2025. 1. Resilience Is Built Long Before It’s Needed The shocks of the early 2020s—the pandemic, supply chain breakdowns, inflation spikes, and energy crises—taught family firms that resilience is not something to deploy in a crisis; it is something to build in anticipation of one. In 2025, family business leaders have adopted practices that challenge earlier generations’ belief in “sticking with what works.” They have: Diversified revenue streams to avoid overdependence on a single market, Strengthened cash reserves, Digitised operations to reduce manual bottlenecks, and Created flexible staffing models that preserve loyalty while adapting to seasonal and economic cycles. The lesson is clear: resilience is not stubbornness. It is preparedness paired with agility. 2. Agility Isn’t About Speed—it’s About Direction Corporate giants often move quickly but pivot slowly. Family firms of 2025 have learned that agility means knowing which direction to move in before accelerating. Surrounded by unpredictable market conditions, leaders have become: More data-literate, using analytics to guide investment and pricing decisions; More experimental, running low-risk pilots before major roll-outs; Faster at decision-making, thanks to flatter governance structures; More realistic about risk, avoiding both paralysis and overconfidence. The modern family enterprise understands that agility is not simply reacting—it is choosing wisely under pressure and being prepared to change course when evidence demands it. 3. Digital Transformation Is Not Optional For years, family firms lagged behind large corporations in adopting technology. By 2025, that gap has all but vanished. The disruptions of the previous decade made digital innovation unavoidable, and family businesses came to see technology not as a threat to tradition but as a means of preserving it. Leaders have learned that: Automation reduces cost without compromising craftsmanship, E-commerce makes even local firms global, Digital record-keeping strengthens governance and succession planning, AI can support, rather than replace, human judgement. Technology is no longer an add-on—it sits at the heart of strategy. The best-performing family firms are those that integrated digital tools while keeping their distinctive identity intact. 4. Purpose Must Be Proven, Not Claimed By 2025, consumers and employees alike expect authenticity. Family firms have long talked about values and legacy, but the world now demands evidence. Leaders have discovered that purpose is only meaningful when demonstrated publicly and consistently. This has changed how they operate. Family firms increasingly: Publish sustainability commitments and measure progress, Involve employees in shaping social impact programmes, Invest in local communities through education and apprenticeships, and Use values to guide decisions on suppliers, pricing, and product design. The lesson: purpose is no longer a sentimental ideal. It is a strategic asset that must be lived, not laminated. 5. Governance Needs Professionalisation Without Losing Soul The world of 2025 is too complex for ad-hoc decision-making or informal family councils around the kitchen table. Most leading family businesses have embraced more professional governance while fiercely protecting the culture that makes them unique. They have learned that: A clear separation between ownership, management, and family roles prevents conflict, Independent board members bring challenge and expertise, Formal succession plans reduce emotion-driven crises, and Transparency builds trust both inside and outside the business. Crucially, professionalisation has not stripped family firms of their character. It has amplified it, ensuring that values drive strategy, not sentiment. 6. Succession Is a Journey, Not a Hand-Over Moment For decades, succession was treated as a single decision—typically made late and reluctantly. In 2025, family business leaders have realised that succession is one of the most strategic, long-term processes they will ever manage. Key lessons include: Next-generation leaders need early exposure to governance, not just operations, Experience outside the family firm enriches leadership capability, Psychological readiness matters as much as technical expertise, and Retiring leaders must let go gradually, not abruptly—or not at all. Many families now spread succession over 5–10 years, with shared leadership models that allow wisdom and innovation to overlap. 7. People Are the Most Powerful Competitive Advantage The tight labour markets and shifting expectations of the 2020s taught family businesses that workers are not merely resources—they are core stakeholders. Leaders discovered that what motivates people today is not the same as what motivated their parents or grandparents. In 2025, employee expectations revolve around: Meaningful work, Flexible working patterns, Opportunities for growth, Psychological safety, and Authentic leadership. Family firms, often known for loyalty and human warmth, have leaned into this strength. Many now outperform larger corporations in retention, employer reputation, and intergenerational appeal. 8. Sustainability Is No Longer a Generation’s Problem—it’s a Business Imperative For a long time, family businesses saw environmental sustainability as a moral good but not necessarily a commercial priority. The last decade has changed that. Climate regulation, shifting consumer behaviour, and resource pressures have made sustainability a board-level priority. Leaders have learned that: Sustainable operations reduce long-term cost, Green technology attracts both customers and investment, Younger family members expect climate leadership, and Long-term ownership creates a rare accountability to future generations. For family businesses—already thinking in decades rather than quarters—sustainability aligns perfectly with their natural DNA. The Family Firms of 2025: Grounded, Global, and Future-Focused The world of 2025 is not easy for any business. But family firms have shown that adaptability, values, and long-term stewardship are powerful assets in unstable times. The lessons they’ve learned are both practical and philosophical—and together, they illustrate why family enterprises continue to be among the most trusted and resilient institutions in the modern economy. As Paul Andrews, Founder and CEO of Family Business United concludes, "Family businesses are resilient and take things in their stride, adjusting decisions accordingly and taking into account the changing economic and political circumstances in which the operate." "2025 has seen a lot of uncertainty and family business leaders have has to respond accordingly. The often quoted long-term view where family businesses tend to think in generations has shortened somewhat as they focus on what needs to be addressed today. However, decisions continue to be made with an eye on the future." "One thing that is for sure, to thrive in a constantly changing world. family businesses need to carry their history lightly and focus firmly on their purpose and make decisions accordingly."

The spirit of generosity was in full swing last week as family businesses from across Yorkshire came together at Sound Leisure in Leeds for the annual Family Business Festive Food Parcel event. Hosted at one of the world’s last remaining traditional jukebox manufacturers, proudly family-run with Chris Black at the helm, the event brought together guests, supporters, and community members with one shared aim: to support Yorkshire families in need this Christmas. In the days leading up to the event and on the day itself, attendees donated hundreds of food items, filling boxes with essential food items and festive treats. Guests also had the opportunity to step behind the scenes at Sound Leisure, gaining insight into the craftsmanship and heritage that has shaped the business into a global icon of British manufacturing. Following the factory tour, volunteers worked together to assemble food parcels, which have since been distributed through schools across Yorkshire to ensure they reach families who need them most during the holiday season. Family Business United worked closely with Luke Consiglio and his team at The Pantry UK who create 40,000 meals for children in schools across the UK daily. Through their network of schools and the knowledge of the headteachers in schools across Yorkshire, deserving families were identified to be recipients of the food parcels created by the campaign. Paul Andrews, Founder and CEO of Family Business United, expressed his gratitude for the overwhelming support: “We were absolutely delighted with the response this year." "The generosity shown by the family business community is truly inspiring, and the items donated will make an incredible difference to those receiving them." "As an organisation, family is at the centre of what we do and it’s heart-warming to see family businesses and members of our broader family business community come together to support families across Yorkshire at a time of year that can be particularly challenging.” The event showcased not only the strength of Yorkshire’s family business community but also the shared values of compassion, collaboration, and commitment to making a positive impact. As the festive season approaches, the success of the Family Business Festive Food Parcel event stands as a reminder of the power of community and the meaningful change that can be achieved when people come together. As Paul concludes, "We would like to thank everyone involved in making the event happen and for donating items that are going to bring some festive cheer to families that need it the most. Thank you all." You can check out a selection of photographs from the day in the gallery below: