Advice and Advisors

1. 1

   Two-thirds (66%) of small-business owners have one person with whom they are likely to consult before making a critical business decision. In 56 percent of those cases (37 % of all cases), that person will be a family member. The one person sought out for critical decisions in order of frequency is: a spouse, a partner/co-owner, a professional advisor/counselor, an employee, and a son.

2. 2

   One-third (34%) of small-business owners have no one person that they turn to prior to making a critical business decision. About 55 percent of those owners handle the decision “solo.” The remainder either change the one advisor with the situation/decision or routinely consult with several people.

3. 3

   In the last 12 months, 84 percent of small employers sought advice from one or more counselors (persons not in the firm and not the firm’s customers). The average number of counselors (types, not individuals) solicited was three and one-half to provide advice on an average of five different topical areas.

4. 4

   Accountants were the group most likely to provide solicited advice. Fifty-nine (59) percent of small businessmen and women sought an accountant for such purposes in the last year. The next most commonly solicited advisors were family members (by 44%), lawyers (by 39%), other business owners (by 34%), suppliers (by 31%), and insurance agents and brokers (by 30%).

5. 5

   The advice solicited from counselors was commonly taken. However, a relationship appeared between the likelihood of taking the advice and paying for the advice. The chances of taking advice rose when small-business owners paid for it.

6. 6

   Small businessmen and women often did not pay for the advice that they received or they paid for it indirectly through purchase of other goods and services. However, payment (or the lack thereof) was tied to the type of advisor. Lawyers, for example, charged 75 percent of those soliciting them; supplier charged 3 percent.

7. 7

   Fifty-seven (57) percent of small employers say that they received helpful, unsolicited suggestions from an advisor or other non-customer outside the firm in the last year. Forty-two (42) percent received them from more than one type of advisor. Family members, other business owners, and accountants provided them most frequently.

8. 8

   “Accounting, bookkeeping, and taxes” was the subject on which advice was most frequently sought. Seventy-three (73) percent report that they asked for advice on one or more matters in the last year.
   
   • Advice was also frequently sought on “legal questions” (by 56%), “computers, software, Web sites and telecommunications” (by 53%), and “industry-specific technical matters” (by 48%).

9. 9

   Outside advisors are important to most small-business owners. Yet, they are rarely the single person owners turn to prior to a critical business decision. Rather they assume the role of “expert,” filling a temporary, though possibly on-going, need.

Volume 2, Issue 5, 2002
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 1Is there ONE person, inside or outside your business, that you are likely to talk to or discuss matters with before addressing a serious problem or making a critical business decision? Top 100
• 1aIs that person (business confidante) a family member?
• 1a1Which family member (is the business confidante)?
• 1bWhich BEST describes that person (business confidante)?
• 2Are you more likely to discuss a serious business problem or a critical decision with several people, a different person depending on the problem or decision, OR are you more likely to handle it yourself without outside input?
• 3A(solicit advice from) An accountant.
• 3A1Did you take the advice?
• 3A2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3B(solicit advice from) A family member.
• 3B1Did you take the advice?
• 3B2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3C(solicit advice from) A banker.
• 3C1Did you take the advice?
• 3C2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3D(solicit advice from) A management, marketing or financial consultant.
• 3D1Did you take the advice?
• 3D2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3E(solicit advice from) A lawyer.
• 3E1Did you take the advice?
• 3E2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3F(solicit advice from) An engineer.
• 3F1Did you take the advice?
• 3F2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3G(solicit advice from) A supplier.
• 3G1Did you take the advice?
• 3G2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3H(solicit advice from) An insurance agent or broker.
• 3H1Did you take the advice?
• 3H2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3I(solicit advice from) A designer including a Web site designer.
• 3I1Did you take the advice?
• 3I2Did you pay for the advice, was it free, or was it part of the cost of something you purchased?
• 3J(solicit advice from) Another business owner.
• 3J1Did you take the advice?
• 3J2Did you pay for the advice, was it free, or was it part of the cost of something you purchased:?
• 4A(advice topic) Advertising, marketing, or promoting your business.
• 4B(advice topic) Human resources and personnel matters.
• 4C(advice topic) Legal questions.
• 4D(advice topic) Accounting, bookkeeping, or taxes.
• 4E(advice topic) Management practices or business strategy.
• 4F(advice topic) Industry-specific technical matter.
• 4G(advice topic) Computers, software, Web sites, or telecommunications.
• 4H(advice topic) Loans, financial analysis, or cash management.
• 4I(advice topic) Evaluation of prospective purchases or business investments.
• 4J(advice topic) A government rule or requirement not including taxes.
• 4K(advice topic) Business lay-out or design.
• 5A(unsolicited advice) An accountant.
• 5B(unsolicited advice) A family member.
• 5C(unsolicited advice) A banker.
• 5D(unsolicited advice) A management, marketing, or financial consultant.
• 5E(unsolicited advice) A lawyer.
• 5F(unsolicited advice) An engineer.
• 5G(unsolicited advice) A supplier.
• 5H(unsolicited advice) An insurance agent or broker.
• 5I(unsolicited advice) A designer including a Web designer.
• 5J(unsolicited advice) Another business owner.
• 6A banker’s advice helps me manage my business’s financial needs better.
• 7How often do you consult a banker for business advice? Do you estimate:?
• 7aWhat type of advice do you usually ask from a banker? (Allow two responses.)