A recent survey of 340 Indiana firms found external advisors are highly prized by companies with annual sales of $19 million or less and employ 100 or fewer workers.

The survey was conducted by James Lowry and Joseph Chapman, marketing professors at Ball State.

"The owner or chief executive officer of a small firm often feels like someone suspended in air without any visible means of support," Lowry said. "He or she is driven, but may not have a reliable support system to assist in resolving problems. By using external advisors when specific business problems arise, business people can compensate for the lack of a specialized internal staff usually found at larger companies."

In order of importance, respondents said their five most critical problems were sales/marketing, personnel/recruiting, organization/administration, government regulations and taxes.

The top five business advisors identified by respondents were accountants, lawyers, bankers, family members and trade associations.

Also called upon regularly were insurance agents, friends, computer service companies, consultants and private investigators.

The survey found when it came to sales/marketing problems, respondents relied heavily on consultants. Businesses spent an average of about 33 hours per month on sales/marketing problems with suppliers.

With personnel/recruiting difficulties, companies used lawyers or business service firms. To resolve organization and administration problems, respondents depended on a variety of consultants. The key advisor to resolve problems associated with government regulations were trade associations. For taxes and tax planning, accountants were the overwhelming choice.

For accountants, lawyers and bankers, this study demonstrates a significant market exists among small and mid-sized firms for their expertise on specific business problems, Lowry said.

Trade associations and insurance agents, who are also highly valued, may want to strengthen their advisory functions, he said.

"Another implication of the study is the importance of family members and friends to the owners or chief executives," Lowry said. "Trust, loyalty, expertise, similarity of viewpoints and cost-free counsel are factors that cause businesspeople to consult with family members and friends."

By Marc Ransford, Communications Manager

(NOTE TO EDITORS: For more information, Lowry may be reached by e-mail at jlowry@bsu.edu or by phone at (765) 285-5180. Chapman may be contacted at jchapman@bsu.eduor (765) 285-8171.)