Entrepreneurs start new companies with a vision, a dream, a business plan, and some capital. They take risks. They reap rewards, and too often they fail.
The statistics for startups are grim—50 percent will fail after four years and 66 percent fail within 10 years. So how do small businesses increase their survival rates? Is there more to running your own business than instinct and gut feelings?
Statistical Significance With Mentorship
According to Score, the largest network of volunteer, expert business mentors, entrepreneurs are five times more likely to start a business and succeed with a mentor. In fact, a small business survey they conducted showed 87 percent were still in business after a year, compared to 75 percent for those without mentors.
Even more, MicroMentor, in their business outcomes survey, found that mentored businesses increased their revenue by 83 percent, while non-mentored businesses only increased revenue by 16 percent.
Experience is different from knowledge gained from books. It’s in the trenches, get your hands dirty and learn-from-it experience, and sometimes it’s a better and more efficient teacher with lessons that stick, both the good and the bad.
Those personal experiences and lessons learned, when shared in a mentoring relationship, can help the entrepreneur avoid serious pitfalls, guide them through rough patches, and encourage risks that lead to great rewards.
This is an asset that cannot be found in books; it has to be lived.
It’s common to hear, “It’s who you know, not what you know.” If this is true, and it often seems to be, a mentor has cultivated relationships—valuable ones—over the years and they will often be happy to share with those they mentor.
This can be invaluable, not only because they might cut you a deal, but also because it saves you a lot of time looking for a company that has the qualifications you are looking for.
Having someone in your corner who can offer reassurance based on similar experiences, guiding you and telling you not to worry, or advising what you should do is a game changer for entrepreneurs.
The bottom line is that this boosts self-confidence, something that is critical for success. A study conducted at the University of California, Berkeley Haas School of Business found, as The Telegraph reported, “Within a work environment, higher-status individuals tended to be more admired, listened to, and had more sway over group decisions.”
A Stronger EQ
Forget IQ, it’s EQ that can determine business success. Having a mature mentor can make all the difference for the young, inexperienced entrepreneur who is predisposed to making emotionally-based judgments.
Mentors will help navigate the minefield, show you how to keep emotions out of business, and encourage smart, decisive decision-making. This will help overcome hurdles that often trip up the newcomer.
Having someone in your corner and encouraging you when the going gets rough can make all the difference between sinking and swimming, even if it’s only a dog paddle.
It can also have a serious impact on mental health. There are reports that say entrepreneurs struggle with depression when they are unable to meet goals and expectations, but those with mentors struggle less and bounce back faster.
Klein Hall CPAs offers customized packages for start-up businesses. When utilized in addition to a mentor, small businesses find they get expert advice that helps their business avoid common pitfalls and build a solid foundation for growth. Contact us today and find out more about how we can help you.