back to list of analyses
BAB41 January analysis
The first survey of 2006 included questions on insurance cover for temporary incapacity, dependency upon IT, time set aside for own training, reviewing costs, outsourcing administrative services, accreditation and adviser/client confidentiality.
In total 193 Advisers responded to this Survey.
Survey Findings
In the January survey of Business Advisers, panellists were asked to say, from their own experience, what proportion of small firms has temporary incapacity/ critical illness insurance. 56% of UKBAB respondents said less than 10% take this type of cover, whilst 40% of respondents said between 10% and 30% of small businesses. In the parallel survey of smaller businesses, panellists were asked whether they carry this type of insurance cover. 33% of respondents to the survey say that they do.
34% of the Business Advisers responding to the UKBAB believe that up to 10% of clients have proper mechanisms in place against major IT systems failure, while 37% think that 11% - 20% have proper mechanisms in place against major IT systems failure. The remaining 29% say that more than 20% of clients are prepared in this way. This contrasts with the results from the UKBB, where 75% of respondents said that they have proper mechanisms in place against major IT systems failure within their companies.
19% of respondents to the UKBAB believe that owner managers never take time out for training, whilst 77% of UKBAB respondents believe that 1 - 5 days annually is what owner-managers allow for training themselves. Only 4% think that this time is more than 5 days. One comment received on this topic noted that business owners who do not have the means to assess their own skills and effectiveness may be unaware of their training requirements but that when weaknesses are identified they are keen to resolve the problem as quickly as possible.
The question was asked of owner managers themselves, in the parallel UKBB survey. 19% said that they never take time out, while 52% take from one to five days per annum and 29% take more than five days.
When it comes to their own training, responding Business Advisers tend to take more time on average. None of the respondents to the UKBAB never take time out, but 32% take from one to five days per annum and 68% take more than five days.
Time was judged to be the greatest constraint in resisting training for the business advisers responding to the UKBAB, with 78% choosing this while 15% chose cost and 9% chose relevance.
UKBB respondents were asked the same question, and time was selected by 44%. Costs and relevance were more pertinent to this group, each being selected by 24% of respondents.
There is a plethora of service companies offering to provide functions such as book-keeping, recruitment and IT maintenance to all sizes of businesses. Take up of these outsourced services can vary by the size of firm but the January UKBAB survey focused on firms with ten employees or fewer. All results have been adjusted to exclude 'don't know' responses. In the January UKBB survey, businesses were asked directly whether they outsource these functions.
Comments related to these four areas included observations that book-keeping and payroll needed to be done every week but IT maintenance and recruitment were less frequent requirements so this might influence decisions on whether to outsource or not. Also that many small business owners may more readily accept their lack of knowledge when it comes to payroll and book-keeping but think they have the right skills to carry out recruitment.
83% of respondents estimated that book-keeping is outsourced by between 1% and 50% of very small companies, with 12% estimating this outsourcing at 50% - 75%. The results from the UKBB showed that book-keeping functions are outsourced by 23% of all respondents, but amongst the smallest firms the rate is 31%.
Outsourcing payroll functions is expected to be more prevalent. 67% of UKBAB respondents estimated that payroll functions are outsourced by between 1% and 50% of very small companies, with 23% estimating this outsourcing at 50% - 75%. The results from the UKBB showed that outsourcing payroll functions is more prevalent among respondents: 34% do this, 33% and more in firms with 10 full-time employees or fewer.
The experience of UKBAB respondents on outsourcing IT maintenance is more widespread than for book-keeping and payroll. 53% of UKBAB respondents estimated that IT maintenance is outsourced by between 1% and 50% of very small companies, with 21% estimating this at 50% - 75% and 19% at more than 75%. UKBB respondents say that more IT maintenance is mainly provided externally, with 55% of all responding firms outsourcing this, but 46% for companies with 1 - 10 full-time employees.
Outsourced recruitment was thought to be less frequent in very small firms and 28% of respondents thought none of them do it, while 38% thought that only between 1% and 10% of very small firms would use outsourced recruitment services. The UKBB findings for firms with 10 or fewer full-time employees was that 8% use outsourcing for this.
Business advisers were asked to what extent they encourage clients to review their costs regularly, and 76% of respondents said that they did this to a high or reasonably high extent In the UKBB panellists were asked how frequently they review their costs. The findings were that 57% of respondents review their business costs every month, while 23% look at them twice a year, with 16% reviewing annually.
Business advisers were asked how much their clients were willing to reveal all aspects of their businesses to them when clients are seeking advice. 72% of responding advisers say that clients are highly or reasonably highly willing to disclose all aspects of their businesses, and no advisers report complete refusal from their clients. However, when business owner managers were asked if they would be willing to reveal all aspects of their businesses to providers of business advice,in the parallel UKBB survey, only 51% of UKBB respondents said they would be highly or reasonably highly willing to reveal all aspects of their business operations, while 7% would not be willing at all.
Business advisers were then asked what impact lack of disclosure has on their effectiveness. 59% of respondents said that it constrained their effectiveness highly or reasonably highly, but 9% said it did not at all affect effectiveness.
The relevance of professional standards were the topics for the final two questions in the UKBAB January survey.
The topics gave rise to a number of individual comments. Several were suggesting that clients are largely unaware of what formal accreditation is available for business advisers, and even if they have heard of the qualifications or standards, they do not understand the significance. Some comments indicate that there is a lack of a nationally respected unified standard as opposed to a registration system.
80% of respondents consider as that achieving a given professional standard is important or absolutely crucial to enhancing performance in the provision of business advice. 81% of respondents regard the achievement of professional standards as absolutely crucial or important to improving individual advisers marketability and career prospects.
In your experience, how important is the achievement of a given professional standard in business advice:
Listed below are extracts from feedback into the January 2006 Survey BAB41
Views expressed are those of individual panellists and may not represent those
of the University.
Business advice for general issues (employment law, finance etc) is easy to source, but our business finds advice specific to our industry very hard to get. We rely on helpful directors of other packaging companies for such advice. However they are not a source to be "abused" as a friendly co-operation with other packaging companies is vital for our survival.
We are a 2 director and 1 employee company who do book keeping in house but payroll out. Like many small businesses recruitment, IT etc is only necessary from time to time so is outsourced AS AND WHEN NEEDED - it is not like book keeping payroll that needs doing every week.
As for adviser accreditation / professional standards- over the years i have had lots, TMB, Selectassure, Nat Bus Consultants Register etc - it has NEVER been a factor in a client choosing me to do work , other than to get a BL subsidy. Hardly any business has heard of SFEDI let alone understands what it means. Prof standards only make sense when they are difficult to get and so mean something for those with compared to those without, valued by the client and can justify charging higher fees. Long way off with bus advice - how many people look for a coach with prof standards when looking for coaching - how many know the significance of the standard and how it differentiates.
Interesting topics but difficult to answer with a click.
I have noticed that many advisers I come across are ex-bankers, usually semi-retired (and male!). They tend to draw on a life time of business knowledge therefore have little need of a formal qualification, however, I do think that business advising is a different skill to running your own business.
I believe that owners of businesses that do not have means to assess their skills and effectiveness are unaware of their training requirements and this is the reason they do not undertake higher levels of training. In the main, when weaknesses in their own skills are identified, most managers are keen to resolve the problem as quickly as possible.
I would like to comment on the questions re Business Advice Standards, I have been concerned lately regarding how many inexperienced people are giving business advice. I do believe in achieving a standard but there is no substitute for experience and I feel very strongly that business advisers should have both. Much of my feedback from clients mentions the value of real life examples. Question: How can new graduates give clients real life examples when they have not lived a life yet?
Regarding the value of professional standards for business advisers - I would rate this more highly if I felt that professional standards existed. All too often the way to get onto an approved register, e.g. SBS register, is to fill in a mound of paperwork, pay a fee, and it's done. That is not a professional standard, merely a fund-raising exercise!!!!
The question of the impact of adviser qualifications is strongly related to marketplace perceptions. Myself and all my colleagues are SFEDI accredited, I have doubts whether this has any meaning or carries any weight with any of our clients.
In relation to the questions regarding advise standards if this alludes to the adviser standards promoted by SBS they are irrelevant and never referred to by anyone in the vast majority [if not all] of BLs post the hue and cry when sbs first wasted very significant sums of money on their creation and delivery [by people who appeared to know little about occupational standards nor how they should be applied/used] certainly they have done absolutely nothing to raise and unify the standards of advice provided by adviser across the country. If the question relates to inherent advice standards then it is of critical importance to be certain that advise given is the best it can be and proper support is given to client to implement changes that might result.
Clients will buy business advice off any Tom Dick or Harry and are not sufficiently educated to differentiate between qualified advice und unqualified advice.
Out-sourcing by small businesses: perhaps oddly, many small business owners accept their lack of knowledge when it comes to payroll and book-keeping/accounts, but somehow think that they have the right skills to carry out recruitment for themselves.
A nationally recognised Business Advice qualification would be beneficial. However in my 10 years as a BA I have never been asked about my qualifications. But then I do not work in the public sector.
