The effect of business advisers on the performance of SMEs

Abstract

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.

The Growth of Small Businesses: Towards A Research Agenda

“…Small businesses are generally thought to be resistant to seeking formal external support (Blackburn et al, 2010), but where it occurs, fast growing firms are thought to seek them out and use them more frequently than slower-growing firms (Storey, 1994). It is, however, an open question whether or not the advice so received is a cause of the growth in question or simply a manifestation of the normal relational orientation of growing firms since mandated contact with support providers tends to increase with the size of the firm (Berry et al, 2006).…”

Assessing the Impact of Knowledge of Government Business Support Services on Propensity of New Graduates to Venture into Business

“…While some studies have found a positive relationship between the use of business assistance from GBSS by SMEs with the growth of their businesses Berry, et al, 2006;Caniels & Romjin, 2006;Dyer & Ross, 2008) or positive impact in certain areas (Caniels & Romjin, 2006;Dyer & Ross, 2008), other authors have found that external support from the government has not impact whatsoever on SMEs performance. It has been noted that GBSS sponsored programs are not fully utilized by SMEs (Berry, et al, 2006;Boter & Lundstrom, 2006;Ramsden & Bennet, 2005). (Wiklund & Shepherd, 2003) found that regular contact with GBSS agencies result in a favourable influence on the growth of the small businesses and Berry et al, (2006) found that owners who frequently sought business assistance services experienced positive growth compared to those who did not.…”

“…It has been noted that GBSS sponsored programs are not fully utilized by SMEs (Berry, et al, 2006;Boter & Lundstrom, 2006;Ramsden & Bennet, 2005). (Wiklund & Shepherd, 2003) found that regular contact with GBSS agencies result in a favourable influence on the growth of the small businesses and Berry et al, (2006) found that owners who frequently sought business assistance services experienced positive growth compared to those who did not. Bennet and Robson (1999) proposed that the impact is only marginal for SMEs in the services sector but significant for SMEs in the manufacturing sector.…”

“…GBSS has been widely discussed in the literature and researchers have been using theories related to resources based view and networking to study the impact of GBSS on the performance of the beneficiary firms (Bennett & Robson, 1999;Berry, Sweeting, & Goto, 2006;Chrisman, Mc Mullan, & Hall, 2005;Ramsden & Bennet, 2005). However, there is a lot of debate about the actual impact of GBSS on SMEs.…”

Conception and Directions of Using Dea Method to Measure the Efficiency of Local Governments – Selected Aspects

“…Prezentowane w literaturze badania (Devi, Samujh, 2012;Berry et al, 2006;Carey i in., 2005;Blackburn i in., 2010;IFAC 2010) wskazują, że taką rolę mogą pełnić osoby zawodowo zajmujące się rachunkowością, co stwarza szansę na dywersyfikację usług biznesowych oferowanych w związku ze społeczną odpowiedzialnością MŚP.…”