Seventeen years ago, we saw venture capital firms doing something to drive startups to greater success: pairing an entrepreneur not just with working capital, but an expert business advisor as well. Our founder Bud Colligan connected the dots: small businesses are the engine of job creation in America, but more of them fail then they should. His innovation in founding our organization was to bring the tools that empowered tech companies to brick-and-mortar businesses around the country. That lesson is more true today than it was even twenty years ago.
Mentoring Doubles Your Small Business’ Chances
According to the U.S. Small Business Administration, half of all non-mentored small businesses fail within their first five years. And even then, only 30% of them make it to the ten-year mark. But for small business owners with an advisor or mentor, the difference is striking: 70% of those small businesses that work with an advisor survive: double the rate for unmentored small businesses.
Many small business owners began their companies after early success pursuing their skills and passions: be it designing jewelry, curating a retail shop, opening a restaurant, even starting a small farm or landscaping company. They start wearing all of the hats: CEO, marketing, product development, supply chain, and sales. Then they hit their first wall: success.
The actual day-to-day needs of growing your business, and making that growth sustainable, are beyond the skills of any one person. For example, you may have made a name for yourself at farmers’ markets around the area, or maybe with a food truck or popup. But now that you’re ready to open a storefront, how do you find investors? Write a business plan? Develop a brand strategy? Navigate city permitting? And who has the time for all this?
This is where having an advisor or mentor is crucial. It means having the outside perspective of someone who’s navigated the waters that you’ve yet to dip a toe in.
Online Business Advising Is A Game-Changing Innovation
It’s common for entrepreneurs to seek advice from varied economic and entrepreneur development organizations that offer “technical assistance,” yet this typically translates to one or two staff who have limited capacity, or industry and discipline expertise. Some organizations have responded to this limitation by hiring costly consultants to advise them. And across the board, finding a local mentor yourself can seem like a costly proposition for a small business owner who’s already wearing all of the hats. Enter: online mentoring.
BusinessAdvising.org, for example, leverages technology (an online platform with an internal, proprietary matching algorithm) and volunteerism to provide small business owners with high-quality mentoring, at a low-cost that removes geography as a barrier. If your company is in downtown Omaha, and the best advisor for your business lives in Tampa, BusinessAdvising.org can make that match happen.
Sanjay Sinha is Relationship Manager at California Bank & Trust, and a volunteer advisor with BusinessAdvising.org. An advisor and mentor like Sanjay digs in deep with the companies he helps. During one of his mentoring stints, he spent more than 20 hours working with GAMA-GO, a giftware retail and wholesale shop. GAMA-GO had been in business for over 10 years, had strong sales, but had struggled with profitability. As he often does, Sanjay helped turn a light-bulb on for GAMA-GO’s owners to see that simply increasing sales doesn’t mean a company will be profitable. After working with Sanjay, GAMA-GO ended up solidly profitable for multiple years in a row AND increased their workforce.
The BusinessAdvising.org program works with the small business community in an effort to create new networks and facilitate meaningful growth. The organization strives to extend its reach to minority groups; last year, 54% of the businesses that BusinessAdvising.org advised were women-owned, and over 65% of the jobs maintained or created were held by employees from traditionally underserved communities. These new quality jobs are providing a foundation for healthy and vibrant local economies.
Find Or Become A Mentor
Small businesses as a whole create better jobs, keep more money in local communities, and drive the social and economic health of our entire country. But they face so many challenges: a harder time accessing capital, less favorable distributor and wholesale pricing than big companies, and an uneven playing field against online retailers who don’t need to collect sales tax.
So how can you help? If you’ve built up a body of experience, volunteer your time as a mentor or advisor. And tip off a small business owner you’d like to support to the value of mentoring through a platform like BusinessAdvising.org. If you’re an entrepreneur yourself, sign up today for a mentor from BusinessAdvising.org.