The Market for External Business Advice Services in Britain

Robert Bennett and Paul Robson

Working Papers from Centre for Business Research, University of Cambridge

Abstract: This paper assesses the extent of use of external business advice by SMEs using new survey evidence from the Cambridge ESRC Centre for Business Research Survey of 1997. It analyses external advice by source and by main field. The chief focus is on the fields of advice sought which are shown to draw mainly from advice on taxation and financial management, computer services, advertising, staff training and development, new technology, staff recruitment and marketing. The main differences between firms in choice of advice source relate to their size and growth history; sector differences are statistically significant only for advice on public relations, new technology and product and service design. Size effects show a generally increasing pattern of use with size, rising from about 23% of respondents for firms of 1-4 employees to 44% for firms of 50-99 employees. After that size, the pattern of use either levels off, or for three main fields of advice it has an inverse 'U' shape. The impact of advice is also assessed. The main impact is 'moderate', highest in fields such as computer services, product and service design, taxation and financial management and staff training and development; and lowest in the fields of advertising, staff recruitment and market research. Impacts are most strongly related to growth history of the company and to business size; sector effects are at best weakly significant.

Date: 1999-03
Note: PRO-1
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