AI (Artificial Intelligence) has opened up a new consulting model for family businesses: Fractional Executives. "By using a fractional executive, a family business owner can get help in crucial areas of their business such as leadership transition, succession planning and conflict resolution - without having to add a full time executive" suggests family business expert Don Schwerzler.
Family business expert Don Schwerzler has been advising family business owners for more than 50 years and is the founder of the Family Business Institute and their online organization Family Business Experts.com, both of which are headquartered in Atlanta GA.
AI fractional executives can meet the needs of a growing family business in a cost effective and flexible way. Now a family business that could benefit from a C-level executive but where the company is not large enough to support the cost of a full timer, a fractional executive would be the answer!
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In a Forbes Magazine interview with the developer of the first AI platform for fractional executives: "Fractional consultants is the name of the game in 2023 and beyond. Growing businesses require tactical and strategic support. Our two-year forecast is a significant increase in fractional consulting engagements across the board in all business areas, e.g., HR Sales, Marketing, Operations, Finance and Technology."
Family businesses are renowned for their profound economic influence and personal commitment, showcasing an exceptional blend of professional and personal values. Yet, these businesses often encounter unique challenges best addressed with specialized external assistance. One highly effective and increasingly popular solution comes in the form of fractional advising. This approach, primarily facilitated through a technologically driven online platform, can deliver substantial advantages to family-owned businesses.
AI fractional advising involves the engagement of experienced advisors on a part-time basis. Armed with deep industry knowledge and expertise, these advisors provide invaluable guidance and strategic advice at a fraction of a full-time advisor’s cost. This model is particularly beneficial for family businesses requiring expert input but lacking the resources or need for a full-time advisor.
The first "pain point" that fractional executives address is cost-effectiveness. Family businesses can leverage expert advice and insights without making a substantial financial investment. By freeing up financial resources, they can channel their investments towards critical aspects of their business, such as innovation, employee development, and customer satisfaction.
Further, fractional advising platforms utilize technology to provide immediate and ongoing access to various expertise. These platforms typically host advisors from various backgrounds and industries, making a wealth of knowledge and experience readily available. This capability directly addresses the pain point of limited resources, which is often faced by family businesses. Given the intricate dynamics and the diverse challenges these businesses face, such access to comprehensive expertise can be invaluable.
Another critical pain point fractional advising platforms can resolve is the lack of flexibility in traditional advisor arrangements. Fractional platforms are inherently flexible, adjusting to the specific needs of a business. Family businesses can receive advice when needed instead of adhering to a rigid advising schedule.
“All too often, most small to medium-sized businesses, particularly family offices and family-owned businesses, think advising is only for the big guys,” said one business owner. “AI Fractional advising is turning this thinking on its head.”
Incorporating AI technology in the advising process also brings efficiency and organization. A technological platform can be a central repository for project documentation, data analytics, communication, and timeline management. This integration can significantly simplify processes and enhance project management, another common pain point for businesses.
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Market research is a fundamental component of this advising model. Top-tier fractional advising platforms base their strategies and advice on comprehensive market analysis, ensuring their recommendations align with the business and the market dynamics. This blend of personalized advice and market insights significantly bolsters a business's ability to compete effectively and grow.
AI Fractional executives offer a fresh perspective, a benefit that family businesses, often deeply ingrained in tradition and established practices, can capitalize on. With an objective viewpoint and extensive experience, external advisors can identify hidden opportunities or underutilized resources.
Finally, the complex issues of leadership transition, succession planning, and conflict resolution are common pain points in family businesses. With their impartial stance and expert insights, Fractional executives can provide guidance and strategies to tackle these sensitive issues effectively.
As the business landscape evolves, the demand for cost-effective, flexible, and personalized advising solutions will continue to grow. Fractional advising platforms, particularly those designed for family businesses, are strategically positioned to meet this demand. These platforms present a viable solution for family-owned enterprises striving to navigate their unique challenges while preserving their cherished family legacies.
Using fractional executives open up a world of opportunities for family-owned businesses. This approach provides them a cost-effective way to gain valuable insights, access diverse expertise, and benefit from fresh perspectives. It's a win-win situation that promises to help these businesses survive and thrive in an increasingly competitive marketplace. Now let’s look at some use cases for using fractional executives
Marketing: Boosting Visibility and Brand Recognition
Consider a family-owned bakery business looking to expand its reach. A fractional advisor specializing in marketing could guide them in utilizing cost-effective digital marketing strategies, targeting the right demographics, and optimizing their social media presence. They could also provide insights into content creation and SEO practices to increase online visibility and improve brand recognition, leading to increased customer engagement and higher sales.
Sales: Enhancing Customer Acquisition and Retention
A fractional sales advisor can prove invaluable for a family-owned retail store struggling with customer retention and sales growth. They can analyze sales data, identify customer behavior patterns, and devise strategies to improve customer acquisition and retention rates. The advisor could guide the implementation of CRM systems for efficient customer data management, personalized outreach strategies, and customer loyalty programs, effectively boosting sales.
Operations: Streamlining Processes and Productivity
A third-generation family manufacturing business may grapple with operational inefficiencies. A fractional operations advisor can help identify bottlenecks, streamline workflows, and implement lean methodologies to enhance productivity. They can also introduce modern supply chain management strategies, quality control processes, and technology solutions such as ERP systems, improving operational efficiency and reducing costs.
Finance: Optimizing Financial Health and Profitability
A family-owned restaurant chain aiming to increase profitability could benefit from a fractional finance advisor. The advisor can assist in creating comprehensive financial forecasts, budget management, and cost control strategies. They can also provide advice on pricing strategies, expense tracking, and financial planning for business expansion. Furthermore, they can aid in ensuring financial compliance, risk management, and making informed investment decisions, thus optimizing the business's financial health.
These use cases demonstrate how fractional executives can provide expert guidance across critical business functions. By tailoring their services to the business's specific needs, fractional advisors offer a flexible, cost-effective, and efficient solution to the challenges faced by family-owned businesses,
When should a family-owned business consider using a fractional executive?
Fractional executives can deliver significant benefits across a broad range of family-owned businesses. While this model can assist virtually any business type, specific industries or structures might find it particularly advantageous. Here are a few examples:
In essence, any family-owned business that wants to leverage external expertise, manage resources efficiently, and adapt to modern business practices stands to gain from the services of fractional advisors.
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