The use of external business advice by SMEs in Britain

Abstract

This paper reports new survey results on the extent, sourcing and impact of external business advice to SMEs in Britain. The survey, covering 2547 respondents, is the largest and most definitive assessment to date. Its results demonstrate the very wide extent of external advice: used by 95% of respondent SMEs, an increase from 85.8% in a similar survey in 1991. The analysis of the survey assesses sources of advice in terms of the level of trust that exists between the supplier and the SME client. The market appears to be strongly segmented and dominated by high trust specialist sources (accountants, lawyers), customers, suppliers and business friends. Business associations and government-backed sources play an important but lesser role. The recent government initiative of Business Link has, however, established an important market, used by 27% of respondents. Impact assessments confirm the significance of high trust private sector suppliers for the most crucial supplies of advice. Variations in use occur by SME type chiefly by size but also by sector and growth record. Generally levels of use vary by SME type to a greater extent than levels of impact.