Beware when engaging friends and family

Top tip presented by Gary King of Tendo.

Beware when engaging friends & family

I’m actually here in Granary square just outside Kings Cross.

It’s an absolutely beautiful, stunning setting. I’ve been in a local bar with a couple of new clients today, working with them on their business issues.

I just want to share with you a couple of frustrations from recent examples of business owners who have engaged a family member, a close relative or a friend to get support for their particular services.

So, one is a client that was a sole trader. I questioned her about whether she should be a limited company, given the size of the business . Her accountant was a long-standing family friend that was giving her a reduced price for his services.

Now, what that actually meant is that the reduced price was translating into a reduced service. What should have been done is the business flipped around to being a limited company, but it wasn’t and he kept her as a sole trader. When we analysed it, we found this was costing her an extra three and a half thousand pounds a year!! When she found this out, she was in tears, she was three and a half thousand pounds worse off. She obviously exited this ‘expert’ advisor.

I was then with another contact yesterday who has been using a family relative for some of his financial support, only to find that the some of the systems weren’t set up correctly, some of the codes weren’t set up correctly. What he’s found is that it’s taken him three months to unpick all of the issues that were caused by effectively buying a service at a reduced price and getting a reduced service.

So be very, very aware of engaging with close family friends or relatives or people close to you on a friends and family rate because often it means that they reduce the service levels based on the price that you’re paying.

So look, I hope that’s been of interest.

Goodbye from an absolutely stunning Granary square, you can just see the fountains there, and the Christmas tree and the bars lit up in the background. So I’m going back inside now because is it’s freezing.

I hope that’s been of interest. Take care for now.

Tendo business consultancy