The use of external business advice by SMEs in Britain

Abstract

R obinson Building, Sidgw ick A venue, Cambridge CB3 9DE, U K This paper reports new survey results on the extent, sourcing and im pact of external business adv ice to SM E s in Britain. The survey , cov ering 2547 respondents, is the largest and m ost de nitive assessm ent to date. I ts results demonstrate the v ery w id e extent of external adv ice: used by 95% of respondent SM Es, an increase from 85.8% in a sim ilar survey in 1991. The analysis of the survey assesses sources of adv ice in terms of the level of trust that exists betw een the supplier and the SM E client. The m arket appears to be strongly segm ented and dom inated by high trust specialist sources ( accountants, law y ers) , cu stom ers, suppliers and business friends. Business associations and governm ent-backed sources play an important but lesser role. The recent gov ernm ent initia tiv e of Business L ink has, how ev er, established an im portant m arket, used by 27% of respondents. I m pact assessments con rm the signi cance of hig h trust priv ate sector suppliers for the most crucial supplies of advice. V ariations in use occur by SM E typ e chie y by size but also by sector and grow th record. Generally lev els of use v ary by SM E typ e to a greater extent than levels of im pact .

Discouraged Advisees? The Influence of Gender, Ethnicity, and Education in the Use of Advice and Finance by UK SMEs

“…Link did not exceed 30 per cent (Bennett and Robson, 1999a). The two differences between our sample and that of Bennett and Robson (1999a) are that: first, theirs was composed of manufacturing and business services, whereas ours covered all sectors; and second, ours was restricted to enterprises that have bank accounts at Barclays Bank.…”

“…Kon and Storey"s (2003) theory of discouraged borrowers highlights potential borrowers from banks who may offer perfectly reasonable business proposals but who "do not apply for a bank loan because they feel they will be rejected" [and more recently considered in studies such as Roper and Scott (2007) and Brooksbank et al (2007) (gender), Fraser (2007 (ethnicity), Wyer et al (2007), and Freel et al (2007)]. We would posit that trust, as described by Bennett and Robson (1999a) -and further developed in Bennett and Robson (2004) -leads to a situation in which there are discouraged advisees. In this case, we argue that it may be that owner-managers do not approach particular sources of external advice because they are not confident they will receive (and do not trust the advisers to provide) useful information.…”

“…The impact of external advice upon SMEs has been examined in a number of studies (for example, Robson and Bennett, 1999a). Elsewhere, Mole (2002: 156) argued that business advisers from Business Links simply do not have the "professional kudos" and, indeed, the same level of impact as accountants and solicitors due to the "contractual basis of their relationships".…”

“…The two differences between our sample and that of Bennett and Robson (1999a) are that: first, theirs was composed of manufacturing and business services, whereas ours covered all sectors; and second, ours was restricted to enterprises that have bank accounts at Barclays Bank. Despite these structural variations in the two samples, both confirmed the predominance of accountants as a source of advice.…”

Towards a Model of Technology Adoption: A Conceptual Model Proposition

“…In spite of attempts by the Government, the small business sector still has problems and is often suspicious of those that work to help them (Bennett and Robson, 1998). There is now a plethora of government funded support services available for SMEs and this in itself can be confusing for owner-managers.…”