Key Takeaways
Family business directors should build a focused box score of three to five measures tied to the company’s strategy and shareholder objectives rather than relying on a broad dashboard of available metrics.
Benchmarking is most useful when directors evaluate performance on both an absolute and relative basis, selecting peer comparisons based on industry, size, tax status, and ownership priorities.
Consistent measurement over time helps boards distinguish meaningful trends from temporary variances, identify unexplained performance gaps, and assess whether differences from benchmarks are deliberate and aligned with strategy.
Family business directors review financial statements, budgets, and forecasts throughout the year. Those materials help explain how the company has performed against its own history and plans. But at some point, most boards also look for an outside reference point. Relevant benchmarks help frame those conversations.
Our 2026 Family Business Benchmarking Study provides that perspective. The study draws on 2025 financial data from 46 privately held family businesses and includes public company observations for market context. It examines cash reserves, debt, capital investment, revenue growth, margins, and shareholder distributions. We developed the study to help private family business directors ask better questions about their own companies rather than provide a set of universal targets.
Over the next few weeks, we will use the benchmarking study to work through a series of practical board questions. This first post considers how directors should choose and interpret benchmarks, and the remaining posts will dive deeper into how to interpret the results from the benchmarking study and what those might mean for your family business. In each case, the benchmark is a starting point for understanding and evaluating the company’s own performance and priorities.
Build Your Box Score
We have written before about the value of a family business box score. In sports, a box score is a structured summary of what happened. It cannot recreate every inning or possession, but the right statistics help tell the story of the game. A family business needs the same discipline.
Your box score should contain a limited set of measures connected to the company's strategy and the shareholders' objectives. Selecting these is an important governance decision. A company focused on growth should track whether new investment is producing revenue, cash flow, and adequate returns. While a company focused on resilience might pay close attention to liquidity, leverage, and its capacity to absorb a weaker year. A board balancing current income and long-term appreciation should monitor distributions and changes in business value. The study offers candidates for that box score, but it does not prescribe the box score itself.
Management will pay attention to what the board measures. If the box score emphasizes revenue and EBITDA alone, it may reward growth even when working capital and capital expenditures consume cash or the company assumes more risk. But adding every available metric is not the answer, as a long dashboard can obscure the measures that matter most.
Assess Performance on an Absolute & Relative Basis
Once the board has selected the measures, directors can begin to assess performance in two ways. Absolute performance compares current results with the company's history, budget, and long-term plan. Directors should understand how each measure changed and whether management delivered the expected outcome. Relative performance compares those results with similarly situated businesses and can reveal practices or risks that internal comparisons alone would not show.
The family business sample in the study includes 28 industrial companies and 18 retail, wholesale, and service companies. Twenty companies had more than $100 million in total assets, while 26 were below that threshold. The study also includes 29 S corporations and 17 C corporations. An overall median can conceal meaningful differences within the group.
The principal findings illustrate the point. Median cash equaled 6% of sales for the total sample, but the median was 3% for companies with more than $100 million in assets and 8% for smaller companies. Median Debt / EBITDA was 0.58x for the total sample, compared with 1.18x for the larger companies and 0.26x for the smaller companies. The figures show how quickly the reference point can change when the comparison group changes.
Directors can view the study through four comparison lenses:
Industry. A useful peer group should face similar economics, working capital requirements, and investment needs.
Size. The study separates companies above and below $100 million in assets because scale can affect the results.
Tax status. Entity structure affects how directors interpret distributions, taxes, and retained earnings.
Ownership priorities. Similar businesses may choose different financial policies because their shareholders have different risk tolerances and time horizons.
The public sample includes 1,075 S&P 1500 companies across eight industry sectors. It provides market context, not a direct scorecard for a private family business, as differences may reflect scale, ownership, or financing choices rather than management quality.
Consistently, Over Time
A useful box score is updated consistently. When operations are stable, it is easy to continue with business as usual. Tracking the same core measures helps the board recognize gradual changes that might otherwise go unnoticed.
Trends usually tell directors more than a single observation. The board should compare the company's trend with the benchmark using consistent definitions. A persistent unexplained gap deserves more attention than a one-year variance tied to a known investment or disruption.
The box score should change when strategy, capital needs, or shareholder priorities change, but the board should explain why. Otherwise, the dashboard can tell whatever story is most convenient that year.
The board does not need to include every potential metric on its dashboard. Select three to five measures that match the company's current priorities, then ask:
What result is the company trying to achieve?
Which measures best show whether management is making progress?
How have those measures changed relative to history, budget, and the long-term plan?
Which study comparison is most relevant to our business?
What explains the difference, and is it consistent with our strategy and ownership priorities?
If the difference is deliberate, directors should be able to explain the expected benefit and monitor whether it develops. If the difference is unexplained, the benchmark has done its job by identifying a question that deserves management's attention.
Conclusion
The best performance measures do more than report what happened, they help directors understand why it happened and how future decisions should respond. That is the value of combining a focused box score with relevant benchmarks and reviewing both consistently over time. Over the next three weeks, we will use this framework to dive deeper into the benchmarking study, focusing on how the findings from the study can help you and your family business.
