The Short Lives of Most Businesses
Approximately 26,000 new companies are formed each year in North Carolina. In that same year, over 23,000 companies fail due to poor management and operational mistakes. The statistics are worse for rural communities, minority populations and veterans. This means that good ideas go to waste along with the grant and investor funds that helped get these companies started. As a result, the potential growth of revenue and new jobs is lost also.
Having assistance for emerging entrepreneurs considerably reduces the number of failures. Entrepreneurs should be seeking out business mentors that can help them through the early years of their business.
Entrepreneurs Need Mentoring
North Carolina has a comprehensive array of entrepreneurship education programs throughout the community college and university systems including various other private and public organizations. The problem is that we have little help for entrepreneurs once they have completed these programs and actually try to start a business. Actually starting a business is a whole lot harder than passing academic tests about the subject.
The issue is that all of these entrepreneurs have need of business management and leadership expertise including:
- Business strategy and planning discipline to make sure the business is focused on a viable market with a winning product/service that has a competitive edge
- Forecasting and financing ensuring that sales plans are realistic and that cash is well managed
- Operational discipline and judgment to increase the chances of success by making fewer mistakes
- Industry connections that can help accelerate the business and its operations
- Start-up company experience that can instill the wisdom of what it takes to really start and manage an emerging business
Entrepreneurs often do not know where to turn to perform even the most basic things in creating and managing a business. They need help with such issues as:
- Putting the legal and regulatory infrastructure in place for the company along with the necessary human resources programs
- Financing the early months of the company in order to cover start-up costs, capital equipment and operating expenses
- How to accomplish technology transfer, protect intellectual property and apply for patents and trademarks
- Getting the necessary campaigns and skills in place to execute their marketing and sales plans
- Establishing industry relationships that will further enable sales and operational efficiency
Mentors Connect the Dots for Entrepreneurs
For the majority of the companies that fail, the missing ingredient that could have ensured their success is basic business and operational “know-how.” This is the void that a mentor fills. A mentor provides business guidance to entrepreneurs and helps them make the right decisions as they start and operate new companies.
Mentors increase entrepreneurs’ chances of success by providing them needed business wisdom, resulting in increased revenue. Good mentors are seasoned business executives who establish long-term mentoring relationships and are available whenever needed. Their services include:
- Advising entrepreneurs on the viability of their business ideas, helping them to get on the right track from the beginning
- Identifying research to understand their market opportunities, creating the in-depth understanding of their customers and other industry players that is needed
- Developing an effective business model and business strategy so they know how they are going to make money and/or achieve their social purpose
- Identifying marketing, sales, prototyping and financing needs to make sure the company has the right infrastructure to accomplish their sales goals
- Helping establish appropriate business infrastructure so that the company has the necessary legal and regulatory infrastructure in place
- Advising them on business operations so that the right support is in place for marketing, sales and customer support
- Dealing with marketing and sales issues so that the hundreds of issues that always come up are properly dealt with
- Identifying the needs for protecting intellectual property so that the company is not exposed to losing their differentiation and barriers to entry
- Providing management guidance for their business decisions to make sure they are both thoughtful and effective
- Referring entrepreneurs to business resources that will help them in both operations as well as reaching out t new customers and partnerships
Get a Business Mentor
If there is any doubt in your mind, don’t hesitate. If you are a new entrepreneur, get a mentor. Even if you are not so new to entrepreneurship, get a mentor anyway. In either case, the mentor provides the impartial set of eyes you need to hold you accountable for meeting your own objectives.
The key to selecting the mentor is their being impartial. They have no horse in your race. So, chances are you don’t know your next mentor right now, but one is out there that can help you. Find one.
About the Author: Bill Warner is co-founder of EntreDot, and non-profit organization that helps entrepreneurs start new businesses. He is on the management team of Bunker Labs, a Fund Executive of the Inception Micro Angel Fund (IMAF-RTP), an angel investor organization and Managing Director of Paladin and Associates, a business consulting firm.