Family business's performance is closely linked to how professionalized they are and how thoroughly they measure several metrics related to family, business, competition, innovation, and financial aspects. Professionalization in a family firm is typically related to the enforcement of merit-based recruitment, transparent governance, and the implementation of structured managerial practices, which can significantly influence the performance outcome. Professional family businesses are those that make decisions focusing on boosting competitiveness rather than just satisfying family members. Even the family member itself also needs to have different responsibilities for their family members and the company.
The business performance is typically measured through traditional financial metrics like revenue growth, profitability, and return on investment. The key financial metric to use in family business are Profit margin, Gross margin, Debt ratio, Inventory turnover, Total-asset turnover, fixed-asset turnover, Days sales outstanding.