We’ve all heard that having business mentors can help you develop yourself and grow your company. But what is it exactly that these mentors can do for you? How can they help you move your company along?
Knowing exactly how you want your mentors to help you move forward can help you find the motivation to find these mentors, as well as give you the fire you need to ask your potential mentors for help in a compelling way. Here are the five main benefits of having a business mentor.
Benefit #1: How to Structure Your Company
Most entrepreneurs don’t spend a lot of time thinking about how to structure their company. Yet most mentors will insist on making sure you have your business structure correct from the get go. They’ve made structuring mistakes in the past and paid for it.
Do you have a solid options plan in place? Do you have iron clad operating agreements between all your partners? Are you operating with a legal entity that minimizes your personal risk and reduces the amount of taxes you need to pay? These are all structuring questions mentors can help with.
Benefit #2: Avoid Mistakes Others Made
Mentors will be able to tell you about mistakes that others in your industry have made. They’ve been around the block longer and know the pitfalls well.
Benefit #3: Learn to Hire the Right People
Building an A-Grade team is one of the most important factors to success in business. But how exactly do you do it? How do you lure employees from lucrative jobs to come work for you? How do you build a corporate culture? How do you inspire people?
Mentors can help you with this elusive aspect of your business.
Benefit #4: Investments & Exits
Investments and exits are some of the trickiest negotiations in business. Without someone experienced to guide you through the process, there’s a very good chance you’ll make big mistakes. How should you value your company? How important is it that you get some liquidation preferences? If investors want the right to hire an outside CEO, what should you say?
With acquisitions, how important are the terms versus the raw price? How do you value non-cash acquisitions, such as equity deals or performance based deals? What kind of earn out plan is fair? Most first time entrepreneurs simply can’t answer these questions without outside help. Having great mentors will help you through these important processes.
Benefit #5: Think Big
Mentors can help you think outside of your regular bubble. If you’re regularly only thinking at the $100,000 a year level, mentors can help you think at the $1 million a year or $10 million a year level. If you’ve never tasted success, it’s hard to imagine or plan for massive success. Mentors, on the other hand, can help you see and plan that far ahead.