723
Case
Study
Oak Tree Inn: growth challenges facing a
family-run tourism business
Ron Livingstone
The Oak Tree Inn is a very successful tourism business in a small, picturesque village called Balmaha
(with a population of around 60 people), on the east bank of Loch Lomond, one of Scotland’s most
iconic natural locations and within Scotland’s first ever National Park. The award-winning inn is a
family-owned business comprising holiday accommodation (sleeping 90 guests a night), an authentic
Scottish bar, restaurant, artisan coffee and ice-cream shop (both home produced) and a popular village
shop. It employs 100 staff (some seasonal). The business had a turnover in 2018 of £3m ($3.8m, €3.4m)
and the owner-directors have aspirations to grow to £10m ($12.8m, €11.3m) by 2025. However, the
question now is, how to continue to grow this successful business, given that its location has a restrictive physical capacity in the area for growth in the number of customers able to visit?
Business development and growth
Sandy and Lucy Fraser had been running an electrician
business and a bed and breakfast business in and around
Balmaha for some 20 years when, in the mid-1990s,
they explored plans to design and build a new tourism
offering, The Oak Tree Inn. At the time, Balmaha and the
east side of Loch Lomond were described by one bank
manager they approached for support as a, ‘graveyard of
tourism businesses’. In the mid-1900s Balmaha had been
a very popular destination for the residents of Glasgow,
at that time a large industrial city about 20 miles (32km)
away, but the rise of cheap holidays to continental Europe
and further afield, plus other recreation options all led
to a steady decline in the popularity of Balmaha as a
destination.
The Fraser family, Sandy, Lucy and their eight children,
however, had great faith in the opportunities and possibilities and in 1997 the Oak Tree Inn opened its doors.
The bank manager asked where the TV, juke box and
pool table were, since in his long experience of lending
money to businesses around Loch Lomond, no pub or
inn business had ever survived without them. Sandy’s
response was that he had deliberately left them out
since he wanted his guests to come and interact with
each other. Set in wonderful scenery and an outdoor
setting, Sandy believed that he would succeed by offering an experience. The Frasers have achieved this with
a bar and restaurant carefully built to reflect the older,
traditional design of Scottish inns, a large real fire as a
focal point in the bar, reclaimed pitched pine wood, many
Scottish artefacts lining the walls and picturesque views
from the ceiling to floor windows. The first year business
plan income projection was £300,000 gross ($388,000,
€340,000); they ended their first year by achieving more
than double that target, proving the instant success of
their business proposition.
The Oak Tree Inn building is now central to all other
activities. Since 1997 the Frasers have expanded their business activity and grown income by purchasing six other
properties and building two new tourist accommodation
houses in Balmaha. They have also opened up a village
shop, artisan coffee and ice cream parlour and in 2018
opened a private jetty onto Loch Lomond so as to expand
their market to the users of the loch (Scottish word for
lake). They currently have further plans for development
which include a possible micro-brewery, a coffee roastery
and smokehouse all to add to the offering to their guests.
Over the past 20 years the Fraser family have had a clear
and consistent vision that they will provide a unique and
outstanding visitor experience, for day visitors and tourists
staying overnight. This will be built around provision of a
high quality and decidedly memorable visitor experience
through the offering of artisan products and extraordinary dining and socialising experiences.
Source: Kay Roxby/Alamy Stock Photo
This case was prepared by Ron Livingstone. It is intended as a basis for class discussion and not as an illustration of good or bad practice.
Not to be reproduced without permission.
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Oak Tree Inn: growth challenges facing a family-run tourism business
724
Table 1 Top ten reasons visitors choose to go to the National Park, compared to overall reasons for visits to Scotland

Source: VisitScotland Visitor Survey 2015/16.
Table 2 Financial performance

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Oak Tree Inn: growth challenges facing a family-run tourism business
726
Developments in the surrounding area
The Fraser family started with a vision to make Balmaha
village and its surrounding area a destination of choice
once again. Their view being that this was key to their
business success and that it could be achieved through
careful planning and sensitive development. It would
also provide employment for family members and local
residents, with opportunities for young people to stay
and build a life in the area. In addition to the decline of
Balmaha as a destination, one of the main constraints is
that the business is located on the east side of the loch
which has a 15-mile (24km) narrow and dead-end road
running up the side of it and through Balmaha, so there is
no through-traffic to capitalise on to boost business.
At around the same time as the stones were being laid
for the building of the Oak Tree Inn, the Scottish Parliament was laying down the legislative foundations for the
establishment of Scotland’s first ever National Park which
was formally established in 2002 as the Loch Lomond
and the Trossachs National Park. The investment and profile-raising activity of the formation and running of the
National Park has supported the wider economic, social
and environmental development of the area. There is also a
long-distance footpath called the West Highland Way
which runs through the village and the growth in popularity of such walks (it takes six days), other outdoor pursuits
such as water sports on the loch has all had positive impacts
on the tourism-related businesses in the National Park.
In addition, the Scottish government sees tourism as
one of the key industries for the country’s future growth
and has key strategic projects to help boost the sector
which is one of the most important for the Scottish economy. Approximately 14 million people visiting the country each year (Scotland has a total resident population of
5.3 million). Spending by tourists is around 5 per cent of
GDP and the sector accounts for more than 7 per cent of
employment in Scotland. The Loch Lomond and Trossachs
National Park itself attracts over 4 million visitors a year,
with approximately 59 per cent from Scotland, 21 per cent
from the rest of the UK and 20 per cent from overseas.
19 per cent were from local areas, 43 per cent were on
day trips to the National Park and 38 per cent stayed
overnight.1 Figures 1 and 2 provide specific numbers for
Balmaha and the annual value of tourism to the whole
National Park. Table 3 provides information on why people choose to visit the National Park.
For Balmaha in particular, there has been investment
by the National Park Authority in a new visitor and interpretive centre, enhanced visitor car parking and investment in new trails and walkways. There was also a locally
supported development to get a statue and garden built
just next door to the Oak Tree Inn to honour Tom Weir,
a television celebrity countryside climber, walker and
author from the 1970s and 1980s. This statue and commemorative garden alone attracts around 100,000 visitors every year (many of whom will go in for a coffee,
tea or ice-cream or more at the Oak Tree Inn). This wider
context of development has with no doubt, helped the
Oak Tree Inn business. It has been so successful that quite
often the road has to be closed by the police in the peak
summer time due to too many visitors. This in itself has
now brought a fresh business challenge – how to grow the
business if there is restrictive physical capacity in the area
for growth in the real number of customers able to visit?
Running and growing a family
business to ensure a sustainable
future
The stated aim of the business is to more than triple
revenue between 2018 and 2025. However the specifics of how this will be achieved have not yet been
Figure 1 Visitor numbers for Loch Lomond and the Trossachs National Park’s Visitor Centre in Balmaha
(200m from the Oak Tree Inn).
Number of visitors to Balmaha’s National
Park Visitor Centre
120000
100000
80000
60000
40000
20000
0
2011 2012 2013 2014 2015 2016 2017

94993
Number of visitors
Source: Loch Lomond and the Trossachs National Park
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Oak Tree Inn: growth challenges facing a family-run tourism business
727
Table 3 Balance sheet

Figure 2 Total value of tourism in the National Park (£ GDP)
Total value of tourism in the National Park (£m)
Total value of tourism
in the National Park (£m)
400
390
380
370
360
350
340
330
320
310
300

2014 2015 2016 2017
Source: Loch Lomond and the Trossachs National Park (using the STEAM tourism economic impact model).
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Oak Tree Inn: growth challenges facing a family-run tourism business
728
fully worked out or stated in detail. The business has
undoubtedly developed strongly within the Balmaha
village area and is arguably the strongest business presence in the east of Loch Lomond. The owners’ plans are
to seek to expand within the National Park area and
beyond, based on their approach of selling a memorable experience.
The business is however very much still run and managed by family members, four in particular (including the
two parents, Sandy and Lucy). There is no formal and operational decision-making board and decision making is
still very much undertaken without any formal processes.
Developments and investment can largely be based on
opportunities which are presented rather than through
a formal plan for development. There are no solid management information systems and no systems of instances
of full evidence-based decision making. However it is
acknowledged that the business has, nonetheless, grown
and been successful to date.
Developing an organisational structure which supports growth is seen as a key matter for attention, along
with ensuring effective communication throughout the
business. The business has grown quickly from a family-focused entity with heavy family involvement, up to
20 hours a day at busy times, 7 days a week, 365 days a
year. The systems and processes are yet to fully develop to
support the further growth aspiration.
The owners themselves appreciate and recognise that
these are issues and that they do need to have more sustainable and robust decision making and monitoring
processes in place. They also recognise that they need a
stronger approach to setting their strategy and removing themselves from day-to-day operational activities (for
example it is not uncommon for one of the owners to be
called up to resolve a lack of water into a holiday apartment, or to have to step in to resolve a minor staffing rota
issue). By their own admission the owners have been lucky
in strategic choices they have made and these have been
based more on gut (entrepreneurial) instinct rather than
by detailed analysis or robust evidence based decision
making. Whilst they have grown successfully as a ‘big fish
in a little pond’, they are already creaking at the seams
with a £3m turnover business and recognise the need to
change their management systems and structure in order
to support the next stage of growth.
As with many tourism businesses, the business relies on
seasonal staff to support the boost in guests during the
peak tourist months of May through to August. There can
be a challenge here in sourcing such staff and traditional,
excellent staff have come from Eastern European countries and have tended to return year after year to work
at the Oak Tree Inn. However with the uncertainty over
developments in the relationship that the UK has with the
rest of Europe, there has been a dramatic drop off in the
availability of such staff. In addition, the opportunities to
train and develop seasonal staff to the levels of expectation of the business in terms of exceptional customer
experience and the core offering of an artisanal range
of high-quality products, can be challenging when compressed into short-term contracts.
In common with many food and drink providers in
the UK, the bar and restaurant elements of the business
experience at times a higher turnover of staff than other
industries. Staffing flux can also be a challenge in both
the day-to-day operations of the business and in continuing to develop the Oak Tree Inn ethos and ensure
guests benefit from the Balmaha experience. There is
an emphasis that employees can and should feel very
much part of the family environment. The essence of
the business to date has been around the Fraser family
and it is hoped that staff working at the Oak Tree Inn
feel that they are working within that family environment (for example some key job interviews deliberately
being held in the lounge of the family home adjacent to
the Oak Tree Inn). A priority desire is to establish a core
team of staff and a reliable staff base for all aspects of
the business, who are multi-skilled and able to swap
between elements of the business as varying demands
dictate as well as supporting cross-selling. With up to
90 guests staying a night, the opportunities for add-on
selling opportunities can support the overall revenue
of the business.
The success and sustainability of rural enterprises is
dependent to a large extent on the availability of suitable
staff. There is however a challenge in rural areas of the
UK in providing reasonable cost living accommodation
for employees. With a lack of available affordable housing in the countryside, it is difficult for businesses like the
Oak Tree Inn to attract employees to settle either on their
own or with family. Providing employment opportunities
for young people who have grown up in the area is one
part of a possible solution, however many young people choose to move away for further education or other
employment choices.
A key factor of the range of Oak Tree Inn provisions is
the offering of locally sourced, grown or made products.
There is pride taken in detailing the various ingredients
to ensure they deliver on their promise to provide good,
Scottish food and drink. Authenticity and consistency of
their food, drink and gift offerings is an essential element
of the Oak Tree Inn business. Food and drink producers are
mapped out on promotional materials and menus, gifts
all have local provenance, unique flavours of ice-cream
are made on the premises in a separate manufacturing
unit and coffee is ground on-site from beans personally
sourced by one of the owners. Ensuring consistency in
the quality of all offerings as the business scales-up is a
key consideration of the business owners.
With the decline in visitor numbers and resulting
decline in business activity in Balhama up until the early
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Oak Tree Inn: growth challenges facing a family-run tourism business
729
2000s, there was little local competition for the Oak Tree
Inn until 2018 when there was a new planned tourism
development in the village. The impact is unknown at this
time, however it will likely be a challenge to the Oak Tree
Inn. Further afield, there are also new tourism developments around Loch Lomond which all provide alternative
choices for customers to visit and possibly stay, in preference to Balmaha.
The owners are very aware of the possible impact of
increasing competition and changes in customer engagement, and have been in no way complacent at any time
in the decades of business development. As Sandy Fraser
states, ‘If you are standing still with a business you are
actually going backward’. One area which they have
embraced in recent years is the power of digital communication and presence to boost business. The owners
strive for an active social media presence, well designed
web pages with excellent search engine optimisation,
e-newsletters and the use of digital technology such as
video talking heads, TouchCasts and Virtual Reality. This
is seen as a key area for future development and the selling of some products online to a global audience is being
examined.
With Sandy Fraser being born and growing up on
the east side of Loch Lomond and his father and mother
before him running a bed and breakfast in Balmaha (and
winning a prestigious UK national award), alongside his
father working many years in the forestry industry, there
is a strong passion for working with the community. The
longer-term benefits to the community of a successful
and sustainable business are aspects that Sandy and Lucy
Fraser talk of often.
There are many stakeholders in the region, from
the local Buchanan Community Council (representing
the community to the local authority, Stirling Council
as well as enabling a wide range of activities which
encourage the well-being of their communities), the
Friends of Loch Lomond (a well-respected and relatively influential independent conservation and heritage charity), to the National Park Authority itself (which
carries out many activities but is primarily, ‘to protect
and preserve the natural and cultural heritage of the
park. It informs everything the Authority does, from
enhancing the visitor experience to promoting sustainable social and economic development’). In a rural
setting, within a National Park and in a sector (tourism)
which is a high priority for the Scottish Government,
there are many people and organisations keen to have
input and an influence over direction of this key Scottish business sector.
Table 4 SWOT

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Oak Tree Inn: growth challenges facing a family-run tourism business
730
Future possibilities and opportunities
The owners of the business recognise that they need to
transform the way that their business is managed and
organised. It has grown beyond the smaller, successful
family business dynamic but is still heavily reliant on the
key family members to operate at all levels of the business.
With the aspiration to triple revenue over seven years and
to ensure a resilient, sustainable business, with strategic
and growth decisions made through robust processes and
reliable information systems, the owners are grasping the
challenge, however the exact solution is not yet formed.
Opportunities to grow custom and income in Balmaha,
the main heart of the business, have been a key focus. For
example, with restrictions sometimes put in place to stop
cars from going up the road to Balmaha due to serious
congestion on the no-through road, the actual number of
visitors in the area could be capped. Future growth opportunities to expand footfall and headcount appeared limited. However in response to this and seeking other ways
to get more people into Balmaha, the Frasers took five
years and over £100,000 ($130,000, €115,000) of investment to get a pontoon installed with direct access to Loch
Lomond. This was opened in 2018 and the intent is to seek
to attract many of the tourist boats to land and eat at the
Oak Tree Inn. In addition, there are opportunities to procure a boat and to offer cruises with meals and to collect
guests from other landing points around the loch.
Accommodation occupancy rates vary throughout the
year from fully booked and a waiting list during the summer to low rates in November or January (as detailed in
Table 3). A key challenge for many tourist accommodation
providers in Scotland is to extend the season beyond the
key summer months of May to August and into the ‘shoulder months’ of March/April and September/October.
There are also challenges to provide new and different
experiences which may attract guests to stay and eat in a
spectacular setting such as through the growing trend for
experience and well-being vacations.
The business itself has carried out internal analysis
on the village shop and it is not performing as well as it
could. The owners have therefore commissioned a review
of the appropriateness of all the stock which it carries and
further ways the shop can attract a higher income and
margin. For example, there are opportunities with those
visiting for the day, staying in other accommodation, or
with attracting to the shop some of the 100,000 plus people who walk part of the West Highland Way each year.
There will also be opportunities for additional sales to
those guests using the Oak Tree Inn accommodation, the
bar, the café and the restaurant which are all being examined along with opportunities for what could be suit able
for online retail. There are also ideas around offering outdoor activities and other experiences for individuals or
groups being sold from the shop or online.
The business is also considering how it could replicate
the Oak Tree Inn at other suitable locations around the
National Park and then possibly further afield in Scotland
and internationally. Key to this is ensuring that the quality
and consistency of the food offering is of the same high
standard at all locations. Opportunities for a large central
kitchen to be established which then supplies the various
locations are being considered along with enhanced training and support programmes for all staff.
The café and ice-cream business has been established under the brand name St Mocha and is set-up in a
business and operational model which can be replicated
either through organic expansion or through franchise.
There has been one such expansion to a leased café
building on the west side of Loch Lomond and a planned
expansion for an outlet on the southern edge of the
National Park.
In order to achieve the stated corporate objectives and
achieve sustainable business expansion the business may
have to consider a mix of new activities both in Balmaha
and beyond, as per some of the examples given. The
owners will have to examine their core beliefs of having a
business which strives to provide a distinctive and special
experience for all customers with a high level of expected
customer service and care; all this whilst still believing and
living the essence of the nature of a family business and
extending this ethos to all employees and supporting the
local communities within which their business operates.
With the owners’ concept to seek opportunities to replicate elements of the successful business, they will also
have to challenge the way their business is currently run
and managed. There is no doubt that the business has
grown successfully over the past twenty years and before
that, established and grew prosperous businesses to support their family for two decades before that. The challenges over the next seven to twenty years are twofold.
First in achieving the target of tripling income by 2025,
and then, ensuring further growth, resilience and sustainability for the next generations of the Fraser family and
the communities where the businesses operates.
Reference:
1. National Park latest information, dated 2016.
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