I have been wanting to write on this delicate subject for years. I was always hesitant as I feared that I might be misunderstood. However, I have decided to run the risk and cross the Rubicon, hoping that my message is clear enough to set you thinking without being deemed to be offensive. I fully understand the drive in family businesses to save money on costs, to optimise every euro and to keep costs down. For many family business owners, this ingrained frugality is a cornerstone of their success, a testament to years of hard work and prudent management. However, there’s a fine line between smart savings and what can quickly become a false economy – a short-term saving that leads to significant long-term costs. When it comes to seeking external expertise, like a family business advisor like myself, who can offer a fresh perspective and specialised knowledge, a frugal mindset can inadvertently stifle growth and even jeopardise the very future of the business.

I fully understand the hesitation. Bringing in an outside advisor represents an immediate outlay of cash, besides a change in way of doing things for businesses that have always relied on their own internal capabilities. But I invite family business owners to reflect on the true cost of not seeking help. Let’s consider some common deficiencies that I see so often plague family businesses, and how “saving” on expert advice can lead to far greater expenses down the line.

Imagine a persistent leak in a pipe. You might ignore it, hoping it will go away, or perhaps try a quick, ineffective patch. Each day, the water drips, slowly but surely causing damage. Similarly, unresolved business issues – whether they’re operational inefficiencies, internal conflicts or market challenges – act as constant drains on your resources. Without a clear strategy or an objective eye to identify and address them, these problems fester, leading to:

• Lost Productivity: Employees spending time on redundant tasks or battling bottlenecks.

• Missed Opportunities: Inability to capitalise on market shifts or new ventures.

• Diminished Morale: Frustration and disengagement among staff.

Many family businesses thrive on tradition and established practices. While this can be a strength, it can also lead to tunnel vision. Without an external perspective, family businesses often lack:

• A Clear Strategy: Operating day-to-day without a defined long-term vision, leaving the business susceptible to market changes and competitors.

• Robust Data & Financial Reporting: Making decisions based on intuition or incomplete information rather than solid, data-driven insights. How can you confidently invest in new machinery or expand into new markets without a true understanding of your financial health and projections?

• Proper Corporate Structure: An outdated or inadequate corporate structure can lead to inefficiencies, unclear lines of responsibility, and potential legal or tax disadvantages. This becomes especially critical during succession planning, a notoriously delicate area for family business.

• Proper Operational Structure: Lack of proper job roles, clear lines of reporting, lack of proper process mapping and constant review of how these process can be made more efficient by having them adapted and aided by technology, clear outline of performance expectations for each employee backed with KPIs within a well oiled performance management system.

• Succession Planning: Perhaps one of the most critical areas where external guidance is invaluable. Without a structured plan for leadership transition, family businesses risk internal strife, loss of institutional knowledge, and even collapse upon the retirement or passing of key figures.

These “soft costs” – the cost that most family business owners cannot quantify as they are not immediately apparent – rarely appear on a profit and loss statement, but they silently erode profitability and future potential.

As I always tell family business owners, is to consider the value of external advisor like myself, not as an expense, but as an investment in the future health and prosperity of their business. The immediate cost of my engagement needs to be weighed against the significant, tangible benefits I can deliver, some of which are listed below:-

• Increased Profitability: By streamlining operations, identifying new revenue streams, and optimizing pricing.

• Enhanced Efficiency: Through process improvements and strategic restructuring and technology/digital investments.

• Mitigated Risk: By addressing compliance issues, improving financial controls, and preparing for future challenges.

• Clearer Direction: Providing a roadmap for sustainable growth and long-term success.

• Reduced Stress: Taking the burden of complex problem-solving from being completely on your shoulders, by having someone who can advise and help you share that burden, thus allowing you to focus on what you do best.

Ultimately, the goal is not to spend less, but to spend smarter. So I invite every family business owner to consider the broader picture: the immense value that a tailored, experienced, objective perspective can bring to your business. I assure you one thing – my whole being is geared as ensuring that through our strategic advice we help you and your family business transform those hidden costs and challenges into visible returns, ensuring your family business not only survives but truly thrives for generations to come. This is why when meeting a new family business I always start with an initial review to understand that business and to ensure that we can truly deliver value to that business – an initial review that we do at very low cost.