We have all heard that effective mentoring is a powerful thing. But what if we told you, that for new entrepreneurs and businesses, it could be the difference between success and failure, and help minimise and mitigate risks in business?
Mentoring takes a person with potential and purpose and opens them up to a whole new level of understanding and capability. It can also provide a life-long network —and that’s just the beginning!
In business, it supports risk management by reducing the chances of failure in start-ups. With a staggering 90% of businesses failing within the first few years of launching, mitigation of risk in entrepreneurship is paramount and this is why mentoring and mentoring programmes should be prioritised!
So, how exactly can mentoring maximise the chance of business success and help entrepreneurs achieve better results, faster?
An important role of the mentor is as a conveyor of tacit knowledge. Mentees aren’t just learning concrete skills from their mentors. As past experiences are shared, they pick up how their mentors came up with their great idea, how they brainstorm, find solutions, network and interact with collaborators, and so on—knowledge that is difficult to codify and is often learned by doing. This tacit knowledge helps the entrepreneurs consider possibly overlooked options, and analyse different scenarios, consequently preventing them from taking hasty or potentially detrimental decisions.
Mentoring has been shown to be one of the best sources of innovation, inspiration and long-term competitive advantage, all of which are vital for even the smallest micro-entrepreneur working in the most challenging contexts to an innovation entrepreneur aiming to scale and reach new markets.
Dr Nigel Stone, one of our mentors and facilitators, who previously founded and exited a successful start-up but did not have a mentor at the time, says:
The entrepreneurial journey is a difficult one, where many internal interferences that include fears, insecurities or limiting beliefs, can cause entrepreneurs to mentally struggle. The majority of these cannot often be addressed by business-focused programmes. There needs to be a focus on the person in front of the business, to open up, and be honest with themselves in a safe environment.
A mentor can help create this safe space. Mentors support entrepreneurs to clarify their personal and professional visions, establish their priorities and roadmaps, identify and explore their blind spots, personal development areas or opportunities for resource allocation, and manage their own learning processes. They give them the safe space to reflect and ponder on the potential ramifications of their decisions as well as the tools to navigate them.
Entrepreneurs learn to regulate their ego and strengthen their resilience, making them iterate much faster, pivot, or recover as needed, thus, building up their capacity to navigate the harsh entrepreneurial journey.
82% of businesses fail due to cash flow problems. Additionally, 79% of businesses that fail started out with insufficient funds.
An effective mentor understands the importance of managing cash flow and can guide the entrepreneur in the right direction when it comes to reining in unnecessary spending or investing and growing what they have. This can help to safeguard their business from cash flow issues.
The same applies to team building, marketing and a variety of other areas an entrepreneur has to tackle thoughtfully. Having someone who has walked the path before can reduce costly mistakes.
Entrepreneurs cannot afford to fail. Entrepreneurs cannot afford not to have a mentor!
Mentors can help reduce risk and boost success rate in business and entrepreneurship. They can get entrepreneurs out of sticky situations, keep them from making avoidable mistakes, and help them make decisions more quickly—all of which can save them time, money, or relationships. And it’s no wonder why 70% of small businesses, entrepreneurs and teams that received mentoring survive more than five years (non-mentored entrepreneurs’ survival rate is twice as less) after all!
Curious to learn how you can bring mentoring to the entrepreneurs you work with?
