According to research by global logistics brand UPS, mentoring significantly reduces the risk of business failure for startups. Their research shows that 70% of small startups who survived their first five years received mentoring, while the remaining 35% did no. The greater number of startups that survived their first five years, then, received mentoring.
Research done by Forbes shows in addition that 92% of small business owners agree that mentors have a direct impact on the growth and survival of their business. And a Kabbage report revealed that 84% of small businesses reach profitability in the first four years of their business, with 68% attaining profitability in the first year. The early years of any business are therefore a crucial make-or-break period, and business mentors are vital to their success.
However, only 22% of small businesses had mentors when they started their business. Another 17% indicated they have or had an advisor, possibly a paid relationship for consulting and advice. This leaves 63% of business owners who do not have any professional guidance at the outset of their business.
Mentors can offer far more for your startup than teaching you the ways of business. They can connect you with clients, they can introduce you to providers and vendors, and they can even help you find other companies in allied sectors to collaborate with. There is no better connection than someone who wants to see you succeed.
Growing a startup is difficult.
Regardless of how many hours you spend researching startups, you won’t truly know how difficult it is until you set up your own. Having a mentor who already has first-hand entrepreneurial experience and/or is leading a company at the highest level, is an important factor in the success of any startup.
A good mentor will provide you with unbiased advice from a different perspective, lessening the risk of you jumping into something which you are not prepared for. Failures are bound to occur in any startup, since a mentor already has valuable experience they know what type of failures to expect and can advise you on how to avoid them.
Startups have limited amounts of capital.
One of the major challenges during the early stages of a business is finance. Attending courses, conferences, webinars, or events are less cost effective than a mentor who can also offer a more personal approach to advising you on your startup. You will find that a genuine mentor is not in it to maximise their own gain, they simply want to give back to the entrepreneurial ecosystem.
Mentorship can get you access to a new network.
Most startup mentors have been a part of their industry long enough to be part of a vast network of people who can be of great value to your business. Since mentors are usually connected to other entrepreneurs, there is the potential for collaboration, partnership, and growth of your own personal network.
It’s also a great way to find early adopters for your product and potential service providers. If a mentor doesn’t have the answer, they will find someone within their network who does. Mentors will also have access to interested investors, who generally feel more comfortable investing in a startup referred to them by someone they know.
Honest and realistic perspective
Mentors are a good sounding board for exploring whether your visions and subsequent plans are realistic and responsible. Their outside perspective means that they will notice issues which you may not have considered. They will be the first to tell you if your startup is not ready for the next step, if your idea is not yet fully developed, or if your solution doesn’t solve a real problem for a potential customer.
Knowledge of your industry
A mentor will be of great benefit to you and your startup, both personally and professionally. So take your time in finding one. A mentor who has operating experience in the same or similar industry will help you to gain general industry and market knowledge. Alternatively, if your mentor has industry contacts within their network this will benefit you even more.
Ideally, you are looking for a confidant, teacher and role model, someone who’s honest but compassionate, listens to your problems, offers an experienced perspective, promotes positive change, and encourages self-reliance. However, to be a good mentor they don’t necessarily need all these qualities, provided that within their network there’s someone who does.