Lineage quarterly perspective - Q1 2026
Over the past quarter, we’ve seen a big shift in how private and family-owned businesses are thinking. More founders and families are mapping out exit pathways for the next two to three years, and many are thinking of bringing private equity into the mix, not just for cash, but for capability.
The play is clear: renew now, sell well later.
It’s also been a quarter of margin pressure and tight trading, with little revenue growth. Input costs keep grinding higher — wages, energy, logistics, regulation — while customers and consumer spending is soft and promotional intensity remains high. Businesses are actively destocking to protect cash, which helps working capital but dampens short-term revenue.
At the same time, there’s a wave of board and leadership renewal sweeping through founder and family-led businesses. Many recognise that the same playbook that built their success won’t carry them through this next cycle. Boards are being refreshed with independent directors, and often Chairs, who bring sharper commercial instincts, deeper financial discipline, and fresh thinking on growth, brand and transformation.
This is where we’re doing a lot of work right now, helping founders and families renew strategies and market positioning and bringing in new board members and executives who can add a commercial edge and help the business compete harder. We’re helping clients adopt more structured strategic planning, invest in brand renewal, and build leadership capability that can deliver performance at pace. In short: helping founder-led and family businesses evolve towards a quasi-private equity mindset — with the discipline, clarity and accountability that comes with it — while keeping what makes them special: agility, long-term vision and deep relationships.
What’s ahead for the next 12 months
Capital discipline is the new growth story. The businesses that win will be those managing capital deliberately — prioritising safety, productivity and margin quality over unchecked expansion. They’re redeploying cash into systems, process, and people that lift efficiency and resilience.
Rates easing, but not relaxed. Even as rates start to soften, the cost of money will keep pressure on lazy capital. That’s forcing sharper decision-making and cleaner balance sheets.
Private capital reawakening. Liquidity is returning, and private equity is back in the market looking for quality founder-led assets with structure, a growth story and succession lined up.
Exports on the rise. A weaker Aussie dollar is boosting manufacturers’ export ambitions — those who can keep supply consistent and manage FX risk are building offshore traction.
What we’re seeing among the best operators
The most successful businesses we work with are doubling down on what makes them different. They’re clear on their competitive advantages — whether that’s talent, relationships, innovation, or deep domain expertise — and they’re investing behind it. They’re outcompeting others not by chasing volume, but by tightening focus: better people, sharper execution, stronger customer connection.
They’re building leadership teams that move faster, communicate better, and create real energy around performance. And they’re blending the best of both worlds, the entrepreneurial pace of founder-led culture and the trust & authenticity of business families, with a greater performance edge.
What we’re telling clients
Set your posture now. If an exit is on your radar for FY27–28, start your renewal today — get your structure, growth story and metrics in order.
Rebuild contribution margin. Instead of just cutting costs, review brand and channel strategies, evaluate pricing, unit economics, and SKU mix to strengthen margin resilience.
Refresh governance early. Bring in directors and executives for the market you’re in, not the one you grew up in.
Invest in productivity. Channel capital into tech, systems and people that improve throughput and reduce waste.
Compete on what only you can do. Leverage talent, innovation, and relationships for an advantage.
Bottom line:
It’s a more careful, disciplined market — but far from a bleak one. Founder-led and family businesses that manage capital intentionally, invest in leadership renewal, and double down on their true competitive edge will be the ones setting the pace.