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Mentoring

I have the best gig in the world.  I get to help people move their dreams forward.  I have the opportunity to help college kids who are just starting out.  I can advise business owners who have hit a plateau, reach out and find the next big thing that will propel them to higher levels.  It is all a big rush.  I have talked previously about things that Young Entrepreneurs should know (some seasoned business owners could use these lessons as well).  I have written about why someone would use a mentor and Real Social Networking.

But until now, I haven’t written much about what makes me want to get involved with a business.  It just so happens that last week I interviewed a number of business owners who were looking for mentors. They each were smart, focused and clear about their mission.  But I asked each what they hoped to get out of a mentoring relationship and I literally got blank stares.

For me, there are 8 things that I am looking for when looking to take on a new mentoring opportunity:

  1. Is the business owner able to clearly articulate his or her business?  Does she understand her proposed business model? How does it make money?  What does winning look like?  Who is the competition?  What makes you unique and thus memorable in the marketplace?
  2. How well does the entrepreneur take to proffered alternative ideas?  In almost every first encounter (and many subsequent ones as well), I will offer up some differing opinions.  I look for reaction and thought process when the entrepreneur replies.  I am absolutely not looking for the entrepreneur to just accept my thesis. Rather, it is how they respond.  Are they argumentative?  Are they passive?  Are they confident? Can they riff off of my idea to get to a better place? Some of my biggest failures as an advisor are when the entrepreneur has all of the answers and feels the need to continue to do what they want to do without seriously considering alternative opinions.  Why invest time and effort in the mentoring relationship?
  3. Does the entrepreneur have a reasonable level of vision?  By this I mean, is the entrepreneur focused only on global strategic issues with no real plan to get anything done?  Conversely, it is almost as bad to have one who is buried in the minutiae of running the business with no thought beyond the next payroll cycle. While each entrepreneur has a preference for one or the other, it is critical that the entrepreneur develops to have both levels of vision in play at all times.
  4. Is the entrepreneur a professional? Even the youngest should have the basics down.  Business cards, website, firm handshake, thank yous, elevator pitch of the business — all are critical.  But most important, is your word your bond?  If you promise something, can I count on it?  This is where a lot of folks fall down.  In most cases, I am volunteering to help you.  The least you can do is to make promises you can keep and engage me wisely.  Part of my value to you is access to my network.  I cannot squander that resource on folks who cannot follow through.
  5. Is there a plan?  Can you build a plan for what you want to do and then live to the plan?  Can you stay away from the ADOS — Attention Deficit… Ooh Shiny — method of project planning?  There are going to be lots of shiny objects out there.  You need to stick to your plans and get stuff done.
  6. Have you got a reasonable financial plan?  You need to keep your monetary requirements as low as possible.  Looking for investment is the biggest shiny object project out there.  I have seen more business falter through the fund raising period than at any other time.  The entrepreneur is focused on making investor pitches and not running the business.  Can you wait to get financing until you have a solid revenue stream?  Your multiples and percentage of the company that you will retain will certainly be enhanced by waiting.
    Yes, I know, some companies need a significant amount of financial assistance to get a prototype up and running. Do the best job that you can of bootstrapping the company and using Friends and Family to get you to the revenue stage if at all possible.
  7. Are you enthusiastic about your venture?  You need to have energy to sell me on the concept and sell others as well.  It will come through as you describe your company.  You don’t have to be a marketing whiz to be enthusiastic.  One of the company owners I met last week was a PhD candidate in materials science.  She was as enthusiastic about the potential of her company and product as any of the other CEOs I have met recently.
  8. Lastly, do you understand my specific skills and capabilities?  Is there a fit with the company’s business plan and the CEO’s capabilities?  I am a mentor and not a miracle worker.  There are areas in which  I can help a business that come very easily to me, either because of specific experience or my particular aptitudes. If the business really needs something else, I would try to help them find the right type of mentor to solve that problem.  In many cases, the company will require several mentors, who will each work on areas of specialization.  It often helps if the mentors know each other and can collaborate, but it is not necessary.

It is a thrilling thing for me to be able to be a part of the growth of young companies.  I take the charge of mentorship seriously and hope that the CEOs and founders find value in the journey.

Change

Has anybody got any spare change? This economy has made it difficult for everyone, except possibly, the guys (and gals) at Goldman Sachs.

But that is not exactly the type of change that I was thinking about.  The change that I want to talk about today is related to change in your business.  As an advisor to small businesses, sometimes I work with folks who have run their companies for 4, 6 or even 8 years.  Over that time they have developed a business concept that has built a client base and some revenue stream.  But there they are. Their goal is to grow their business, but they are having a rough go of it.  None of the concepts or ideas are working.

So, one way to get things moving, they think, is to bring in an advisor.  Ah ha, someone who has been there and seen a lot of other companies.  Somehow they find out about me (Thank you to all of you who refer business my way). So we talk. I ask questions and they are caught up in the moment of thinking about a big payday.  “I know that my concept is worth 4 or 5 times what I am making now.  Look at my customers. All I need is someone to show me the path. I’m willing to do anything.”  And in a few cases, this is probably right.  The company may only be a couple of small tweaks away from greatness.

But way more often, there is disappointment on both sides.  Why is this? I believe that a big portion of this is resistance to change.  The business owner cannot give up what got her to the current point.  Sometimes it is that the owner is doing the work that his employee should be doing (what got him there).  Other times, the entrepreneur is feeling that doing the hard work of selling, implementing new programs or developing relationships with partners is below her.

Change is the starting point for the next level of business.  Most businesses run in a predictable pattern.  Up to about $1 million in revenue, the owner (and entrepreneur) can manage the business by himself.  He can figure out the right hires and engender enough loyalty to build a stable business.  At about $1 million, in order to grow, the entrepreneur needs to change. Things need to get more formalized.  You need sales forecasts, HR forms, partnership negotiations, perhaps even a new business model.  The owner needs to get out from servicing the customer directly on a daily basis and start to lead the business in these new directions.  In the cases where the owner is capable of growing and changing, this is the start of the entrepreneurial-managerial journey.  You are not just running a business, but at this level you are also leading a team that will help to propel the business.

As hard as I try to help an entrepreneur evaluate their readiness for the types of changes that I have described, very few are ready for the reality. It reminds me of the saying “What got you here, won’t take you there.”  You have to be willing and capable of change. You have to look at change as an opportunity to learn new things or to try out talents in different areas.  Will you be successful? Maybe not, but by not trying you certainly will not be able to get to the next level.  Perhaps you will find out that you are capable of performing some of the skills, but woefully inadequate to do others.  Fine.  Now would be the time to grow your strengths and find others to join your team that can do the painful stuff.  Over time, if you look seriously at increasing your talent base, you will become a much stronger businessperson.

But at the heart of the matter, you have to be willing to change – go out on a limb and try something new.