Entrepreneurs drop bankers for family on Business Advice

Business owners are more likely to seek business advice from their spouse

Business owners are more likely to seek business advice from their spouseBusiness owners are more likely to seek business advice from their spouse than their non-executive director or banker, research by accountancy firm MGR has revealed.

The survey found that accountants are business owners’ first choice when seeking business advice (38% of respondents), but that their husband or wife was the second most popular choice (15%). Just one in eight (13%) business owners said they would be most likely to turn to their non-executive director.

John Thompson, professor of entrepreneurship at the University of Huddersfield , said:

“Family and friends can be good initial sounding boards but there is always a risk they will only tell you what you want to hear,”

“But formal and informal contacts will always remain important for the would-be entrepreneur – many actually know someone who could provide help with an issue, but don’t appreciate the potential value of the people they’ve met.”

Workwise UK chief executive, Philip Flaxton, said it is natural to gravitate towards family members for a second opinion, but the value of a non-executive director cannot be underestimated.

“Non-executive directors have a whole range of different skills that can be invaluable to businesses, but there is usually a cost associated with appointing one,” said Flaxton. “If a business can afford it, I would always lean towards getting a non-executive director in.”

He added that there are potential pitfalls when using family members as a source of business advice

“In terms of financial or legal advice, they are not the best qualified so you need to be very careful as it can lead you into a lot of trouble”

“However, I can understand why business owners are leaning away from seeking advice from bankers, especially given the bad press they have had recently,” he added.

The MGR survey also revealed that Sir Richard Branson, Peter Jones and Sir Alan Sugar are the celebrity business advisers entrepreneurs would most like to turn to – ahead of either Chancellor Alistair Darling or Prime Minister Gordon Brown.

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