'Going corporate' key to family business success: KPMG

Corporate structures in family businesses including having a board, M&A activity, and capital investment are key to achieving growth in family businesses, according to the latest KPMG Enterprise/STEP Global Family Business report.

The new report - which surveyed 2683 family businesses in 80 countries, including Australia - looked at the evolution of family-owned enterprises and the strategies they use to sustain growth across generations.

The study highlighted the importance of governance and entrepreneurship to deliver success into the future and revealed trends specific to high-performing family businesses.

In Australia, family businesses represent about 70% of all businesses, with a value of around $4.3 trillion. Over half of the Australian workforce is employed by a family business, KPMG said.

KPMG Enterprise Family Business global head Robyn Langsford said the study highlighted the massive transfer of wealth in Australia which will take place over the next 15 years.

Family Business Australia estimated this will total $1.1 trillion by 2030 and $2.6 trillion by 2040.

"The movement of wealth over the next decade means a focus on sustainability and growth for family businesses. It's not just about their survival but also their ability to succeed across generations," Langsford said.

"Growth today is about financial expansion, resilience and adaptability. Family business leaders must expand their field of vision, so their focus goes beyond succession to a meaningful transition of capital across generations."

Langsford said family businesses globally have picked up pace with M&A activity, with 60% of targets being other family businesses, which has started to attract outside investors.

"Private equity firms are becoming increasingly interested in supporting the growth of family businesses and are looking to provide essential funding and expertise, and aid in successful transitions and long-term growth," she said.

The report found family businesses should address traditional issues such as governance, along with new emerging opportunities, particularly with technological advances.

Long-term growth drivers that were highlighted included, enhanced governance, fostering multi-generational engagement, prioritising sustainability, leveraging growth capital and M&A, and considering private equity.