Both Mark and Joel make good points. One of the biggest reasons is that PM's are looking at different things than those involved in either managing the company, or delivering the project. They're focused on making the 'project' successful, not the product, and not the client/sale.
A real-life example - my BIL and I have been friends since we were kids, and we spent a large portion of our early career in the same field of construction. He stayed focused on the field aspect, and I moved more towards management. Every so often we'd get together and he's ask me what a construction PM 'did'. I'd explain it to him, and he'd tell me that all of the things I mentioned should be done by the Superintendent, and he still didn't understand.
Fast forward a few years, and he'd started his own company. He was explaining an issue he was having with a client that he couldn't get resolved. I gave him my view and some ideas about how to resolve it (it was an issue I routinely ran up against), and they worked. But he didn't change anything and still didn't understand.
Fast forward two more years, and he's closed up shop. He couldn't keep up with trying to manage the field, AND make sure the pm side of things was done correctly. Projects were late, materials didn't show, prices were outrageous, etc. And when he told me what had happened, they were all things that a good PM would have focused on (maybe even part-time), allowing him to focus on installation and construction. Now he understands, but as Joel said, sadly it was too late.
So my advice - tell him that by hiring a competent PM (part-time) will allow the three of you to focus on the 'product', him to focus on securing more work, and if the PM's any good, they should be able to provide enough value to pay for themselves.