Friends and family most likely sources of advice for small business owners

Small business leaders are more likely to seek business advice from family and friends than they are to ask for help from a professional, research finds.

A study by government programme Growth Vouchers reveals that 69 per cent of decision makers in small businesses have approached someone in their personal life for help, compared to 57 per cent who have taken advice from a professional.

This is despite 36 per cent of business leaders saying they are most likely to trust guidance from a professional above other sources of advice.

Furthermore, 60 per cent of small business leaders say they would gain from some form of professional advice, with sales and marketing reported as the area that most (30 per cent) businesses think they would benefit from support in.

This is closely followed by making the most of digital technology, which 26 per cent of business leaders say they would benefit from advice on.

Cost is highlighted as the most common reason why people do not seek professional business advice. Of the 1,000 small business decision makers surveyed, 43 per cent of those who have taken advice from friends and family say they did so because it was free; and four in ten businesses (40 per cent) that haven’t taken professional advice felt that it is too expensive.

Other barriers to accessing professional advice are lack of time (reported by 12 per cent of respondents) and uncertainty over how to access it (reported by 9 per cent of respondents).

Business minister Matthew Hancock says, ‘Expert business advice is incredibly important for many of the UK’s smaller firms and helps make sure they reach their potential. We know professional advice can be costly and that there is a lot of choice out there, so we are simplifying the government’s businesses support schemes to make it easier to find and access the right support at the right time.

‘This is all part of our plan to make the UK the best place in the world to start and grow a business.’

Businesses that have already benefitted from receiving support from the Growth Voucher programme include Bath Boutique Stays. Managing director Marcus Whittington says, ‘As a businessman, I’m always looking for opportunities and ideas to enhance and to grow our business and to support our hardworking team.

‘We have requirements within the business to develop the brand and enhance our sales process and marketing. Growth Vouchers is something that was presented to us and looked like an ideal opportunity to provide funding for expert advice.’

Friends and family ‘fund small firms’

One in ten small and medium-sized enterprise (SME) owners are finding finance from friends and family, research claims.

A survey of more than 500 entrepreneurs carried out by Close Invoice Finance discovers more SMEs are been forced to source funds from areas other than banks.

The poll finds less than six per cent of companies are confident they will be able to secure cash from banks, compared to 73 per cent of those quizzed one year ago.

David Thomson, chief executive of Close Invoice Finance, comments: ‘With banks now closing their doors to SMEs, owners are relying on friends and family for financial support, placing immense pressure on these most precious relationships.’

In addition, Thomson claimed cash control is more important to SMEs over the recession, meaning they have to pay close attention to sourcing working capital and combating late payments.

See also: Friends and family or venture capital?

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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