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United States Small Business Administration 
Office of Advocacy 
RS 149_______________________________________________________________________________________________







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Purpose

The Office of Advocacy of the U.S. Small Business Administration
has long recognized the need for government agencies and others
to be more efficient and effective conveyers of information to
small businesses. Similarly, the need to more effectively gather
and use information is often a high priority for small business
owners and managers.

This project was designed to illuminate the processes by which
small business owners and managers acquire information needed
for making strategic decisions for their businesses and planning
for the future. Specifically, the research focused on four areas:
(1)from which sources did small businesses receive information,
(2) why was the information needed, (3) how useful was the information
they received, and (4) what was important to the small business
owner or manager among the sources of information.

Scope and Methodology

Data was collected from a sample of 1,247 small business owners
or managers. Computer-assisted telephone interviews (CATI) were
conducted between Feb. 22 and March 30, 1994.

The sampling procedure yielded a size-industry mix that differs
from the universe of small business in several respects: companies
with no employees or with more than 100 employees were excluded,
and firms were sampled from only five selected industries. These
procedures allowed a slightly more equal spread across industry-size
categories than a simple random sample would produce.

Data were obtained on company characteristics such as size, industry,
revenue and number of years in business, as well as information-gathering
and -using practices. The survey data are available on diskette.
All data were subjected to descriptive analyses (univariate frequencies
and cross-tabulations) and hypothesis testing (Chi Square) procedures.

Highlights

- Informal business contacts such as customers, suppliers and
competitors were the sources of information most frequently used
by small businesses. Other important sources were newsletters
and magazines published by trade or professional associations,
and meetings of these groups. Direct mail advertising and newspapers
and magazines were more important than television and radio.
- Unlike the findings of earlier studies, this survey found
that family members were not considered particularly important
as information sources - nearly two-thirds of the respondents
reported rarely or never receiving information from family members.
- Variation among the use of sources was related to the out-of-pocket
cost of obtaining the information and to the nature of the industry's
products and services. While finance, insurance and real estate
companies tended to be the heaviest users of government information,
construction and retail firms had the strongest links to their
suppliers. Manufacturing firms were the most heavily dependent
on customers.
- Managing the business was the primary motivation for acquiring
information. The types of information most frequently sought were
related to technology, computers, management skills and purchasing
decisions. Nearly three-fourths of respondents reported actively
seeking information about regulations - such as employment and
safety laws - that affected their business operations.
- Ease of understanding, timeliness, accuracy and relevance
are all elements of useful information. Accountants and trade
and professional associations are the providers of the most useful
business information for small businesses.
- Governments, especially the federal government, are comparatively
remote from daily business operations. Their information is rarely
industry-specific or relevant to local circumstances; relatively
few respondents deem governments to be sources of useful information.
Government officials and government reports were among the least
cited sources of business information.
- Small business owners and managers most frequently use - and
respond best to - information provided by sources they already
know and trust. The most important, prevalent and useful information
sources were those who knew a lot about the "consumers"
of the information, the business conditions they face and their
immediate local context, and who could tailor information to meet
specific needs. These information sources had the strongest incentives
to be responsive to the needs of individual information consumers.
- Accountants, suppliers, customers, and trade and professional
associations all have a business interest in strengthening their
relationship with small businesses. The federal government must
expand its work with these industries and take advantage of their
existing routes of communication with small business owners and
managers.



Ordering Information

The complete report is available from:

National Technical Information Service
U.S. Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4650
(703) 487-4639 (TDD)

Order Number: PB95-100293

Cost: A06; A02 Microf.
*Last Modified 6-11-01