Why owls fly while ostriches flounder: An empirical study of advice takers and non–advice takers

On account of its continued focus in public policy, external advice for owners/managers of small firms—so-called guided preparation—has become a topic of perennial research interest for small business scholars for over 25 years. Despite this, evidence surrounding the efficacy of this form of entrepreneurial support is far from certain. Drawing on a major longitudinal data set, this paper examines the differences between SMEs with owners/managers who take advice and those who do not. Our findings are quite emphatic: SMEs whose owners/managers take external advice (i.e. Owls), in general, result in better quality and more informed firms. By contrast SMEs whose owners/managers don’t seek advice (i.e. Ostriches) tend to be less innovative, less profitable, and more financially constrained than their counterparts. The work has important implications for policymakers, which suggests the need to encourage more pro-active SME advice takers, especially for innovative SME owners/managers seeking recourse to strategic forms of advice.