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2013-11-19 10:57:51
Words by Richard Dunnett
Research shows small businesses with mentors are more likely to survive. But why do SMEs need a guiding hand and why would anyone want to become a mentor?
When Richard Branson chose to follow in the footsteps of low-cost airline entrepreneur Sir Freddie Laker and launch Virgin Atlantic the elder businessman told him: "You'll never have the advertising power to outsell British Airways. You are going to have to get out there and use yourself. Make a fool of yourself. Otherwise you won't survive."
Almost 30 years on and the very thought of a business world without Branson's eccentric, perhaps foolhardy but always
brilliantly clever, self-promotion seems almost impossible to imagine.
By passing on his experiences Laker wasn't just Branson's inspiration he was his mentor, too.
Ruth Lowbridge, chair of the Small Firms Enterprise Development Initiative (SFEDI), believes all businesses, from the entrepreneurial start-up to an established company looking at succession planning, need a mentor at all stages.
"All the books in the world wouldn't be able to tell you the day-to-day things you'll encounter when starting or growing a business," she says.
Last November business minister Mark Prisk launched the SFEDI's Get Mentoring scheme, which aims to recruit and train thousands of mentors from the small, medium and micro-business community.
The project received 1.8m of grant funding from the government and counts many major UK trade associations and business representative bodies, including the IoD, as partners.
"Businesses tell us that they want to get advice from other experienced businesspeople and we know that those seeking support are more likely to succeed,"explains Prisk.
"Mentoring can deliver significant economic benefits from just a small commitment of time and resources. Building a relationship with a mentor can have a positive effect on your business, whether you are just starting up or are already established."
The scheme aims to train 15,000 mentors who will agree to give at least two hours a month of free mentoring. They will then be deployed across a range of mentoring organisations accessible via mentorsme.co.uk, a national web portal backed by the British Bankers' Association, which was launched last summer in order to provide a single point of access to mentoring services.
Why use a mentor for your business?
Figures suggests that 70 per cent of small businesses that receive mentoring survive for five years or more, which is double
the rate compared with non-mentored entrepreneurs, and are 20 per cent more likely to experience growth.
Many small businesses look for mentors who have expertise in functions such as finance, sales and marketing, public relations, and strategy and planning.
"You don't even have to be in the same business as the person you're mentoring," Lowbridge explains. "More often than
not a small-business owner wants to talk about the more generic areas of how a business works such as taking a product to market, checking whether or not it's fit for purpose, dealing with the tax office or debt management."
Using a business mentor should not be seen as a sign of weakness but as part of a company owner's professional development, she insists.
"If you were employed in the corporate environment then the company would give you continuous professional development and you would meet with your line manager. A business owner doesn't have anyone to give them feedback, which is where a mentor comes into their own."
"Sometimes people only ask for help when they've got a problem but you may need a different type of mentor for a different issue, challenge or opportunity from maintaining a business to growing it."
Why become a mentor?
There are many reasons why a businessperson might become a mentor, not least to pass on and share expertise. "Our own research shows that the best form of support comes from other business owners who have 'been there, done that' and had the hands-on experience of starting or running a small business," Lowbridge explains.
Under the Get Mentoring scheme, those wishing to apply for free training must meet certain criteria.
"We ask that they have run their own business or have had some small business knowhow and experience of how a small business works," Lowbridge explains. "That could be by running their own or working within a company that is a small business."
She is keen to point out that true mentoring is a two-way street with mentors also learning from the experience. "From talking about your business experiences good and bad you will also gain feedback from the mentee who is starting or growing the business. Often that learning can help you to grow your own business better."
But she warns there's a clear distinction between a mentor and an advisory service. "A mentor shares their experience but does not advise," she says. "In mentoring you are always pulling encouraging and asking questions, trying to get the individual to learn for themselves not pushing.
"If you're starting to direct them by saying, 'If I was you, I would do that' that's what I would call a push approach. That's not what a mentor is there for."
"My mentor has been invaluable"
Guy Levine, 32, set up digital marketing agency Return On Digital in September 2008 after selling his web development business. Following two years of rapid growth he turned to a mentor for help
My previous business was a successful virtual operation that employed freelancers so when I launched Return On Digital with four
full-time staff I realised I didn't know how to plan for expansion or when to take on someone new.
I'm a proficient businessman but I'm embarrassed to say, until two years ago, I'd never put a budget together. We were making money but it was clear I needed a mentor to implement professionalisation and put reporting structures in place. It was important to find a mentor who had 'been there, done that', which is what I gained with Andrew Thomas a former executive director at Bounty. Our first meeting wasn't easy he grilled me but his mentorship has been invaluable.
We sat down and decided what needed to be put in place and how to do it, starting off with budgeting and planning. I now meet with Andrew for half a day a month and in each meeting we always set five priorities to achieve before next time.
It's a paid mentorship, which sharpens our discussions and I value it because it's a line on my budget. But it's been financially rewarding. This year we're on target for a 1.2m turnover up from around 400,000 before Andrew's input. Our net profits have increased and we now employ 15 people.
As a young business everyone is under 35 we had a wealth of enthusiasm and technical experience but needed some 'grey hair' and life experience, which Andrew has given us.
"Mentoring is so rewarding"
Experienced entrepreneur Andrew Pearce, 40, is joint chief executive of low-cost conference calling company Powwownow. At the age of 23 he founded outsource contact centre InkFish. He sold it eight years later for 12.5m
I became a mentor six years ago because I wanted to give something back to young entrepreneurs. Since then I've mentored eight small businesses in the technology, gym and the shopping voucher sectors. I give my time free of charge half a day a month face-to-face and I'm always at the end of the phone or contactable by email.
I look for mentees with passion and enthusiasm who are in love with their product or service.
Often when I first meet entrepreneurs they're running around like headless chickens doing lots of things to keep the business alive. Mentoring is about listening to them and rationalising what they want to do.
Mentees can believe they know everything. As a mentor there is a fine art in leading them in the right direction when they are not on course and making sure they really focus on the core strategy of the business.
There are also times when you have to put your foot down telling them they can't take a salary this month because there is no money in the business isn't fun but they have to learn you can't live on investments alone.
But the rewards are great. Not only do I feel the mentees' sense of achievement one company I mentored has boosted its turnover from 250,000 per annum to 5m in five years but as a 40-year-old mixing with 20somethings it keeps me young and up-to-date with new technology and trends.
"Sharing in their success is a great feeling"
Mark Prisk, minister for business and enterprise, explains why strengthening the mentoring network is vital
How crucial is mentoring to entrepreneurs?
We know that mentoring can be an effective way of promoting more successful start-ups, as well as higher productivity and growth among established businesses. Strengthening the mentoring network is vital if we're going to help the UK's budding entrepreneurs.
What's the government's role in this?
I strongly believe this should be business-led government shouldn't be trying to control or dictate. However, I think government has an important role to play in supporting and facilitating the mentoring network so that people know where to find information on mentoring and mentoring organisations.
Have you ever been a mentor?
I spent some time as a business mentor for The Prince's Trust and have seen first hand how mentoring can inspire and motivate young entrepreneurs.
What did you enjoy most about it?
Building a lasting and mutually rewarding relationship with the mentee. Helping someone else to overcome obstacles and achieve something sharing in their success is a great feeling. Building trust and personal interest takes time. But it's worth it when you see your mentee's business grow and prosper.
What's the most important piece of advice that you would offer to someone starting out as a mentor?
Remember to take an interest in the person as well as their business. Listen to what they say. Don't assume that you know what they're thinking or asking, or even that you know the answer.
Why should a potential mentor offer their time for free?
For me, it's mainly about the personal fulfilment from investing in others seeing my mentee succeed and feeling valued as a role model. You will develop your own relationship management and communication skills, and you might learn new ways of tackling challenges in your own business.
For more information on becoming a mentor visit www.getmentoring.org or to find a business mentor
go to www.mentorsme.co.uk
February 2012: Director Magazine