The accountancy and business advisory firm found in its latest survey that Scottish businesses remain ambitious and focused on growth, but the majority are also increasingly concerned about the potential impact of tax increases (84%), inflationary pressures on costs (81%) and changes in government policy (79%) over the coming 12 months.

The survey also revealed that a third of respondents experience an incident, with 20% of those occurring during the last three years – and 67% of respondents say they are concerned about the threat of a cyber attack.

The 2026 Family, Privately Owned and Owner-Managed Business Survey is Armstrong Watson’s sixth to date and one of the largest of its kind, with 840 businesses from across all sectors and regions sharing their views.

It found that recruitment struggles continued as 63% of businesses reported difficulty recruiting new talent, compared to 85% across the region in its previous survey. The main issue, cited by 77%, is a lack of skilled or suitable candidates.

It also showed that 48% of businesses highlight having the right people in the business as one of the biggest barriers to growth over the next three years. More than half (53%) have implemented measures to improve staff retention, while the use of salary sacrifice schemes has increased, with 46% now offering them, compared with 31% in 2025.

The findings also suggest family-owned, privately owned and owner-managed businesses have not lost their appetite for growth, as 74% of respondents have a business plan with actionable goals.

Across the region, 44% of respondents are now using AI within their business - a significant increase in the last 12 months, up from 23%, with a further 23% are actively considering AI adoption.

Paul Dickson, chief executive and managing partner at Armstrong Watson, said: “It’s perhaps unsurprising that concerns around taxation and inflationary pressures have risen to the top of the list of anticipated economic impacts for businesses over the coming 12 months. Businesses have experienced a period of significant political change, alongside continued reforms affecting employment costs and National Insurance contributions, succession and business taxation.

“Many owners are still assessing what these changes will mean for their businesses, investment plans and future growth. These are not short-term issues, which means businesses are having to think more strategically about how they operate and grow.

“What’s particularly encouraging is that many businesses are not standing still. We have seen a significant increase in AI adoption - uptake across Scotland has almost doubled -,  greater investment in staff retention initiatives, and a growing focus on succession planning. Despite the challenges, there remains a strong appetite to innovate, improve and prepare for the future. The key will be balancing ambition with resilience and ensuring businesses have the right advice and support around them as they navigate change.”