Like any other aspect of personal growth, entrepreneurship is a journey. Or, perhaps more precisely, it’s a battle for survival. Like in any other battle, you need allies on your side to look out for your interests. Starting a business is hard enough as it is, but going it alone raises your chances of failure dramatically. The wiser the people you surround yourself with, the greater your odds of financial success.
Here are four types of mentors that you need to support your progress as an entrepreneur.
1. Financial mentor
In recent years, society has become increasingly critical of the idea of profits, particularly the notion of profit as an incentive for doing business. In the UK, comedian-turned-activist Russell Brand has been especially vocal about this point.
Regardless of whether you think this development is a good thing or not, the reality is that businesses need to be profitable in order to survive. If your expenses exceed revenue for too long, you will eventually go out of business – this is a mathematical certainty.
There are some entrepreneurs who are lucky enough to have a family member who is skilled at managing money. Perhaps your dad or uncle is a CPA and can give you some tips about managing cash flow correctly.
Alternatively, early-stage businesses often apply for seed funding from banks or business angels. Sometimes the investment comes together with an offer to provide financial guidance; for example, there are banks who give aspiring entrepreneurs access to management consultants within their network as part of the investment deal. If you work one-to-one with a business angel, it is in both of your interests, financially speaking, to ensure that the capital investment is allocated intelligently.
2. Legal mentor
There’s no faster way to go out of business than to get on the wrong side of the local government authorities. Fines, litigation, taxes... what a nightmare! Fortunately, it’s possible to work with a mentor or two in this field, ensuring that you spend more time building your empire and less time bogged down in red tape.
For example, a good tax attorney can save your business money, keeping you on the right side of the law and allowing you to reinvest money that might have otherwise been given to the government. If your business is disrupting a well-established field like banking or fine dining, a good lawyer is essential to keep your company compliant with regulations.
Moving to the bigger picture, having veteran entrepreneurs in your network is a great way to make sure that you set up your business in the most appropriate part of the world. Perhaps there’s more of an opportunity for you in the US than the UK. The only way to know is to speak to people who’ve done what you want to do.
3. Subject-specific mentor
Whatever niche your business is in, it’s helpful to have regular contact with people who know more than you about your target market.
What this looks like in practice will depend from business to business.
For example, a friend of mine founded an app start-up that aims to revolutionise the treatment of depression in therapy. For her, it has been necessary to consult with leading therapists on a regular basis. With their collective years of experience, the therapists are well-placed to judge whether her product provides value for their patients.
4. Emotional mentor
Finally, and arguably most importantly, successful business owners need someone in their life to help them handle the emotional ups and downs that come with entrepreneurship. Partners, friends and family can be a great help, but there are times in business where it can be valuable to speak to someone with specific expertise in this area.
If you need to fire 10 hard-working employees because you can’t afford to keep them anymore, being able to speak to a business veteran who knows how it feels to witness former colleagues without the security of a paycheck is a huge bonus for your emotional health. Nobody enjoys firing their friends. A good mentor understands this because he’s experienced it firsthand.
Or perhaps you have a client who is particularly aggressive and demanding – even emotionally abusive. In the most stressful situations, it can be useful to work with a therapist qualified to help you process the emotional fallout more quickly.
The more of these types of mentors you have access to, and the wiser the mentors, the more likely your business is to be profitable. It is a sign of intelligence and humility to learn from your own mistakes, but the most successful people learn from the mistakes of their mentors as well.
Which mentors in your life do you value the most? Let me know in the comments below.