Advisors on Critical Decisions

1. 1

   Business confidantes are the most common and influential small-business advisors. Two of three (67%) owners have such a person, that is, a single person who they consult prior to addressing a serious business problem or making a critical business decision. Business confidantes have typically served in that capacity since the business was founded.
   

2. 2

   Twenty-three (23) percent of the small-business owners do not engage any person or persons in their deliberations when confronting a difficult business problem or critical business decision. They rely on themselves.
   

3. 3

   Engaging different people for different situations appears to be the most productive consulting style in terms of profitability and employment increase/loss of the three styles examined. Relying on confidantes appears less productive and not engaging anyone appears even less so.
   

4. 4

   The firms/occupations that small-business owners most frequently solicit for advice and/or counsel are accountants, insurance agents/brokers, other business owners, suppliers, bankers, IT consultants, including Web designers, and lawyers in that order. Thirty-five (35) percent consulted an accountant more intensively in the last 12 months than any other outside advisor.
   

5. 5

   The median amount of time that a small employer or his/her designee spent with the firm/individual that he/she worked with most intensively the last year was 16 hours. The median amount of money spent on it was about $2,000. The average was significantly higher.
   

6. 6

   Small employers who solicit advice tend to implement that received. However, most carefully filter it, picking and choosing what they find useful and discarding the rest. About two of three who solicited advice in the last 12 months were able to implement a majority of what they received.
   

7. 7

   The subject matter of the year’s most critical decision varied widely – sales or marketing, 22 percent; operations or purchases, 21 percent; finance, 17 percent; and disposition or changing size of the firm, 13 percent. Fifteen (15) percent claim the year’s most significant decision involved the very existence of the business.
   

8. 8

   Discovering critical problems that need to be addressed is often more challenging than resolving them. In one of three cases, owners were surprised to find the matter that created the year’s most critical business decision.
   

9. 9

   Within a week of discovering the matter that required the year’s most critical decision, half of small-business owners began to pursue a corrective course of action. Those waiting longer solicited counsel from more people about the matter. But the speed of instituting corrective action was not related to the seriousness of the matter.
   

10. 10

    Small-business owners are substantially more likely to solicit information than they are to solicit direction. They also typically consult more people when the business decision is more serious.
    

11. 11

    The most helpful advice paid consultants and vendors and suppliers typically provide is adding detail and depth to the owner’s basic ideas.
    

12. 12

    Forty-seven (47) percent of small employers did not seek out anyone to discuss the year’s most significant business decision. The most frequent reason (56%) offered for pursuing this closely held course of action is that they knew what they needed to do as soon as they recognized the matter. The second most frequently cited reason was privacy (22%).

Volume 12, Issue 1, 2012
ISSN 1534-8326

William J. Dennis, Jr.

• 1Is there ONE person that you are likely to talk to or discuss matters with prior to addressing a serious problem or making a critical decision involving this business?
• 1aIs that person an immediate family member, that is a spouse, parent, child, brother or sister?
• 1a1Does that immediate family member work in the business?
• 1a2ADoes that immediate family member provide business advice for a living?
• 1a2BDoes that immediate family member own a business separate and distinct from this one?
• 1a2CDoes that immediate family member manage a different business or a department in a large organization?
• 1a3Which immediate family member are we discussing? Is he or she a:?
• 1bIs that person a:?
• 1b1Do you consider that person a mentor?
• 1cHas that person been your closest business advisor since you first entered THIS business?
• 2Are you more likely to discuss a serious business problem or a critical decision with several people, a different person depending on the situation, or are you more likely to handle it yourself without outside input?
• 2aWould at least one of those people with whom you might discuss the decision be an immediate family member, that is, a spouse, parent, child, brother or sister?
• 2bDoes this business have a formal Board of Directors?
• 2cDo you have an informal advisory group that periodically meets to review your business and offer advice or counsel?
• 2dIs the primary reason that you make critical decisions about this business without consulting others because:?
• 3A(solicit advice from) An accountant
• 3B(solicit advice from) An engineer
• 3C(solicit advice from) A Women’s Business Center
• 3DA banker
• 3EAn insurance agent or broker
• 3F(solicit advice from) A university-based small-business or entrepreneurship development center
• 3G(solicit advice from) A supplier
• 3H(solicit advice from) A marketing or advertising consultant
• 3I(solicit advice from) A lawyer
• 3J(solicit advice from) A management consultant
• 3K(solicit advice from) A business owner
• 3L(solicit advice from) SCORE
• 3M(solicit advice from) A designer, not including a Web designer
• 3N(solicit advice from) A computer or software specialist, including a Web designer
• 4With which of those people or organizations did you work most intensively with over the last 12 months?
• 5Please estimate the number of hours in the last 12 months that you and/or your employees worked with this person, including hours putting together any materials that this person needed to help you.
• 6Please estimate the total costs of that person or firm’s services over the last 12 months?
• 7Which BEST describes the type of task that person or firm performed for you. Did he or she:?
• 8Did you implement all, most, some or none of the advice, suggestions, or recommendations that this person or firm offered?
• 9Did the outcome of your relationship with that person or organization prove:?
• 10Which BEST describes that decision. Was it:?
• 11On a scale of 1 to 10 where 1 means SLIGHTLY more important than most decisions you make for this business and 10 means HUGELY more important than most decisions you make for this business, how important was this decision?
• 12Which BEST describes the stakes of your decision for the business? The decision meant:?
• 13Could the decision be BEST described as:?
• 14Which BEST describes the general subject matter that business decision is related to? Was it:?
• 14a(business decision) Did it more specifically involve:?
• 14bDid it more specifically involve:?
• 14cDid it more specifically involve:?
• 14dDid it more specifically involve:?
• 14eDid it more specifically involve:?
• 15Did you recognize the existence of the matter that your decision addressed or did someone bring it to your attention?
• 15aDid you recognize the matter your decision addressed gradually, over an extended period of time, or suddenly, in a very brief period?
• 15bOnce you recognized the issue you needed to address, approximately how long was it before you started a course of action to address it? Was it:?
• 16Prior to making the decision about the proper course of action, did you seek-out a person, persons, or group to discuss the matter and/or possible solutions?
• 16aAbout how many different people did you talk to or consult on this matter prior to making your decision?
• 16bWas (one of those people/that person) an immediate family member, that is, a spouse, parent, child, brother or sister?
• 16cEarlier, you identified ONE person that you consult with about business-related issues. Did you consult that ONE person when making a CRITICAL decision involving this business?
• 16dWas (one of those people/that person) another owner of this business?
• 16eDid you hire and pay a person or firm to help you decide how to resolve the matter?
• 16e1In terms of value for the time invested and money spent for this person or firm, did you get:
• 16fWhat was the most important reason that you did NOT hire a professional to help you address the matter?
• 16gDid a supplier, banker, insurance agent or someone else who provides advice as part of a product or service influence your decision?
• 16g1Would you describe that influence on your decision as:?
• 16hDid you look for and find a FREE or very low-cost organization or public agency, such as SCORE, a Small Business Development Center or a community organization, to assist you with the matter?
• 16iWhat was the single MOST important reason that you did NOT use one of these free or very low-cost sources of help?
• 16jIn the end, did that person, persons or group with whom you discussed the matter:?
• 16kWhat was the primary reason you did not seek out anyone to discuss the matter prior to making your decision? Was it because you:?