Purpose -Following on studies of the reported importance of a range of external advice and a study of the impact of marketing advice on small and medium-sized enterprise (SME) performance, this study seeks to examine the relationship between business performance (growth) and the nature and degree of a wide range of business advice used by a sample of owner/managers of SMEs in the Manchester City-region of the UK. Design/methodology/approach -The study was conducted with 140 SMEs in the Manchester City region using an administered survey instrument. Findings -The degree of use of a range of external advice was positively related to the growth rate of the SME. In common with most previous research, the most sought-after advisers were external accountants and network contacts. Academic advice was sought very rarely. This study extends previous research and examine the nature of the advice provided by external accountants, which was found to include business, emergency, and financial management support in addition to statutory advice. The degree of provision of this additional assistance was associated with higher growth.Research limitations/implications -The relationship of advice and growth has been examined using a survey instrument. Further research is needed to understand how advice is sought, provided and used. Practical implications -Accountants, network contacts and others were significant providers of advice and, where this advice was used, then SMEs reported higher growth rates. The direction of effect is probably in favour of the value of advice, but there could be virtuous cycles of advice and growth. However, the nature and quality of advice sought, offered, understood and embedded in business practice networks and contributing to social capital require further study. Originality/value -The research extends previous studies by the range of advice and the nature of advice provided by external accountants, considered in relation to firm performance.

No abstract

Through the 1980s the U K venture capital industry, with its perceived focus on risky and innovative businesses, has experienced substantial growth in terms of the number of funds, amounts invested and number of individual investments. I n this article, the Tyebjee and Bruno (1984) venture capital deal creation model which was originated in the US has been used to explore the process of venture capital provision and the development of relationships between venture capital funds and operating business managements. An empirical study of how UK-based venture capital funds operate has been undertaken. The findings generally corroborated the model in a U K context. I t was also observed that while venture capitalists actively worked to nurture good relationships with operating business managements they were prepared to act decisively and proactively to protect their investments when they saw them being threatened fundamentally. There v a s also some evidence which suggested a slackening of interest in innovative, technology-based businesses, particularly those in their early stages of development. Further work is needed to identify if there are conceptual problems with the provision of venture capital to these types of businesses or implementation problems which are tractable. BACKGROUND

Commentators on the UK venture capital industry have observed that it has reached a watershed in its development, with the players of the 1980s having to reassess their positions and possibly, in some cases, their continuing viability as independent operators. It has been suggested that increasing numbers of UK venture capitalists are moving towards a more`hands on' approach to postinvestment relationships with investees in the hope of improving performance and investment out-turns. Research in the USA suggests that the hoped for improvement by this route is not a foregone conclusion. In this paper we examine how a longstanding and successful UK venture capitalist makes a widely publicised`hands-o' approach work ± and how their investees see the approach working. Our research supports the view that, over time, and by a process of feedback learning from post-investment performance monitoring, investees are selected that are compatible with this particular approach. Our ®ndings demonstrate that mutual trust is one of the most vital elements in successful`hands-o' post-investment relationship building ± and that achieving this requires careful and considered nurturing. Moreover, because`hands-on' involvement can be expensive in terms of investor management resources and against the stated investor policy, relationships of the principal±agent type were kept to a minimum as far as was possible consistent with protecting investments. INDUSTRY BACKGROUNDThe early stirrings of a UK venture capital industry began in the UK in the 1930s (Lorenz, 1989), but it was only in the early 1980s that it really began to develop and expand. At the foundation of the British Venture Capital Association in 1983, there were only 36 members. Six years later in 1989, the industry had grown to a peak of 124 venture capital ®rms. This rapid expansion in the UK can be attributed to several factors, particularly the growth of the US venture capital industry in the mid 1970s which provided a role model and information for the UK counterpart (

No abstract