Their connections can open doors that would otherwise be closed and their experiences can save entrepreneurs from suffering from the same start-up mistakes they’ve already made.
Finding the best mentor for your business isn’t as simple as picking a name from a hat. You’ll need to be able to recognise what makes a great mentor, know how to approach one and then how to maximise the relationship.
Here are three steps for finding the most experienced mentor to help bring your start-up idea to the next level:
1. Recognising great mentors
The best mentors are those who ask a lot of tough questions and challenge you to exceed your goals. In doing so, they should share their own experiences and help you uncover new opportunities.
But the best mentors shouldn’t tell you exactly what to do. They understand their role as an advisor and that it’s your company to run, not theirs. Those who tell entrepreneurs what to do, and become upset when their instructions aren’t followed, often cause more damage than good.
Sometimes a mentor may ask to be compensated for his or her help and advice. But the best mentors will usually never ask for compensation and will be satisfied just by
2. Finding a good fit
A common mistake we’ve seen is going straight for the busiest, most well-known, and visible mentors. While this may occasionally work, it’s often more productive to analyse your own close network and look locally for mentors whom you respect with relevant experience.
Think about approaching the founders and key executives of companies in your space who you admire. They are usually more likely to invest time in your business than those with crushing demands from strangers.
To make that first connection, you might try sending a short email explaining what your start-up is doing and why you are reaching out. Avoid ‘form’ emails and always make it relevant and easy for the prospective mentor to help. Take a few minutes to read the person’s blog or Twitter account and learn about his or her background so you can personalise your note.
Some entrepreneurs start off by requesting a meeting over coffee. While this might seem like a good first request, it isn’t always. For example, the mentor could be an introvert who doesn’t drink coffee. Even if they did, they’d have to leave their office to meet with the person and most busy mentors won’t initially have time to meet.
Build up to that first meeting by establishing a rhythm of interesting and thought-provoking email communication. Demonstrate that you’re making regular progress on your product and close the feedback loop so the mentor knows you’re listening, analysing and reacting. When you do eventually ask to speak face-to-face, request a 15-minute meeting at his or her office.
Approaching a smaller number of mentors who have an actual connection to your business or your market and making sure they understand that connection early on usually leads to better long-term engagement between the mentor and the mentee.
3. Maximising the relationship
Once you’ve established a connection, and there is interest from both sides, it’s important to build a relationship over time. One way to do this is to check in regularly by email. Mentors should love to see your progress and take pride in knowing that their input has been helpful. Send a monthly email that reminds them of your past conversations and updates them on your progress.
Ask one new question in these emails to ensure the conversation continues. It’s important to keep these check-in emails short and to the point and not ask for too much at a time. For example, requesting a two-hour phone call once a week is probably going to be an unrealistic demand. Getting together at the mentor’s office for 30 minutes once a quarter can be an easier request to be fulfilled once you’ve established a real relationship.
While mentors shouldn’t ask for financial compensation, if they are consistently spending a considerable amount of time helping you to get going, you might consider granting them a small amount of equity in your company to offer a long-term incentive.
Great founders intuitively understand the importance and role of mentors. They recognise that start-ups are difficult, but realise that a great team paired with the presence of experienced and engaged mentors can make an enormous difference – and is often a strong indicator of future success.
Insurances To Consider If You Are Starting Your Own Business
Below are just some of the insurances you need to consider if you are starting your own business.
Starting your own business is a brave and bold step. You will be joining many others in the journey of becoming your own boss, and this can be a stressful time. You will need to have a sound business plan in place, as well as other aspects that will secure both your business and your financial future. These include certain insurances that are geared toward insuring your salary, your investments and yourself.
All small business owners should look into taking out funeral insurance so that their family is not burdened and can pay for their funeral, investment insurance so that their money is protected and commercial insurance to protect your business and your property.
Below are just some of the insurances you need to consider if you are starting your own business.
General liability insurance
General liability insurance is important because it will protect you and your business from any possible legal action taken by customers. This insurance protects you in case of any injury to or damage to a customer which happened on your property.
It is also important if you manufacture products, but this would fall under product liability insurance. If a product harms a consumer, then you are legally responsible for expenses which means that having liability insurance will help immensely with costs. If you sell homemade cakes, toys for children or even clothing, liability insurance should be at the top of your list.
Now, you might not think that funeral plans are that important but, in fact, they are. Not only for you but for the employees you might have. Funeral cover pays your family a lump sum within 48 hours of your death so that they can pay for your funeral without having to worry about expenses.
As a small business owner, funeral plans make sense. You will likely be the sole breadwinner, which means that your family will be under considerable strain if you die. The same can be said of your employees. Their families will need to be able to pay for their funerals, and it will also ensure that employees stay loyal to your business.
Funeral cover is a benefit that many companies offer their employees to ensure they’re happy and satisfied in their roles.
If you own property or are leasing a building, property insurance is vital. This insurance covers your office equipment, the signage both inside and outside the building, all office furniture as well as your inventory. These will all be covered for disasters such as fire or a storm as well as in case of theft or damage.
However, it is important to note that if your business is based in your home, your homeowner’s insurance will not cover any business equipment. This means that you will have to take out additional insurance for your business equipment. You will also need to speak to your insurer about disaster coverage, especially if your business is based in an area that is prone to fires and floods. Property insurance is important because it will protect your business from incurring costs it cannot afford.
Commercial auto insurance
If you use a company car or have bought a car specifically for your business, you will need to take out commercial auto insurance. Just as homeowner’s insurance will not cover your business inventory, personal auto insurance will not cover a commercial or business vehicle. This is why commercial auto insurance is so important.
If your employees drive their own vehicles to and from work, you should try to ensure that they have personal auto insurance. And if they use their own vehicles for business reasons, you could ask your insurance provider about covering the risk as part of your general liability insurance. This will keep them safe in case of any accidents that might occur during their trip.
It is a good idea to purchase or hire a company car for your employees to use for any business trips so that your employees are safe and correctly insured.
Look after your staff and business
Along with funeral insurance, workers compensation insurance is important for ensuring your staff is covered for any eventuality. And it will show them that you value them as employees, which will keep them happy and content in their roles.
This insurance will cover medical bills, death and disability benefits if an employee is injured on the job or on your property as well as salary protection. If you offer these as separate packages, you will not have to worry about worker’s compensation insurance but you will need to speak to an insurance broker about this. Protecting your employees is the mark of a true company leader, and happy workers are also more productive.
Carve Your Own Niche Without Competing Against Corporates
Business opportunities abound in the trustless business universe. Here’s how you can leverage new technology, solutions and consumer trends.
The trustless business environment is a pioneering space and therefore an ideal environment in which entrepreneurs can launch new products and services without having to compete against corporates — or even other established businesses.
As Bitcoin was the first to show, trustlessness is actually a form of distributed trust. Individuals agree on a way to transact and a system is devised that enforces the agreement. In the process, the need for large, corporatised or government intermediaries, like central or commercial banks or institutions such as Visa and Mastercard, is eliminated.
This strips cost out of transacting, simply because it eliminates layers of middlemen. It opens up markets small or medium-sized businesses simply couldn’t afford to go after otherwise.
Perhaps more importantly, it slashes the cost of starting and running a business. This lowers the barriers to entry, enabling entrepreneurs to more easily break into existing markets or create entirely new ones.
There’s been a lot said in the past 50 years (since the personal computer gave ordinary people access to information that they’d never had before) about the way IT is revolutionising business.
But trustlessness introduces a whole new paradigm of business, one that suits entrepreneurs down to the ground.
How to profit from the trustless universe
1. Three years ago, First Choice Global, a Kenyan start-up, broke the stranglehold ‘trusted’ global financial services conglomerates had on international money transfers. It enabled Kenyans working in the rest of the world to send money in a matter of seconds to their families, who were often unbanked and living in remote rural areas. It bypassed banks, using feature phones and the Mpesa system. It has since been expanded to the citizens of other African countries. The company makes its money on the exchange rates entailed in the transfers. Customers pay no fees.
2. The Ushahidi system, which also originated in Kenya but has been used all over the world, including the United States, works on the basis of voters and other members of the public using the app to report electoral fraud or disruptive incidents. Authorities are involved only when they are notified in time to intervene and keep elections legitimate. The system is in the hands of the electorate but monetised by licensing it to governments or electoral authorities.
3. When it listed on the NYSE in April this year, Spotify ditched the traditional model of listing. With no lockup period and no intermediary bankers, Spotify went public without all the typical shenanigans. There was no underwriting syndicate, no IPO allocations, no preferential treatment. Spotify offered shares directly, simultaneously, and equally to its 70 million paying users.
4. Bitcoin flourished because it has mechanisms in place by which all parties in the system can reach a consensus on how information and trust are shared by the network’s various stakeholders. Information about individual transactions is shared in detailed ‘blocks’ on which agreement must be reached by independent third parties known as miners, before the transaction is validated. The agreement is public.
Bitcoin is a ‘trustless’ system in the sense that there is no surrender of authority to a usually ‘trusted’ centralised organisation. It is also trustless in the sense that each party to each transaction and, therefore, all the parties to all transactions in the block chain are equal components of a distributed chain of trust and power. You don’t have to know other parties to the chain in order to be able to trust the overall chain.
Monetisation of the Bitcoin idea occurs as miners earn a transaction fee for using their resources to validate a transaction and also earn new Bitcoins for successfully solving the algorithm puzzle related to settling a transaction between the two people transacting. And, of course, Bitcoin is vying hard for the status of a currency. It has an external value in which people want to trade.
The Bitcoin example is more complicated and obscure than the others. But, the principle remains: The decentralisation of decision-making that technology enables means that, as long as the community of users you target agrees on the process needed to transact with you, you can start a business anywhere, any time.
Superficially, that sounds like the basis of any conventional business. But, there are two crucial differences. In the trustless world, you need to be:
- The trustless universe functions only if people can see, understand, and agree to what you’re doing and what is required of them to benefit from your idea.
- Acknowledge not only that other people have good ideas and could improve your product or service but also that they actually want to do so. It’s a source of innovation you couldn’t afford to buy. But you can harness it.
The decentralisation of decision-making that technology enables means that, as long as the community of users you target agrees on the process needed to transact with you, you can start a business anywhere, any time.
You don’t have to start from scratch
To profit from the trustless universe, you don’t have to be as radical as Bitcoin. As the three earlier examples show, a simple idea will do. And, you can choose to operate in an established industry.
Our own business is a case in point. We’re a stock exchange. Shares have been issued by businesses and bought and sold by investors for close to 600 years. So, our industry is well entrenched. But… we’re changing it. Not for the sake of being different but in order to create financial access and inclusion with the specific purpose of improving the national economy so that every South African’s life improves.
Our core idea is simple. We use technology to cut transaction, settlement, and clearing time from the usual three days to ten seconds. This removes the need for issuers, brokers, and investors to hold large sums of capital pending settlement. Ordinary people can, therefore, afford to buy shares because they need no more than R1 000 to transact. As a result, a retail market opens up, exactly like the Spotify example. Issuers have a vast new source of capital to tap into. (Think of the power of issuing shares to your most loyal customers. It’s the best loyalty scheme ever devised. Do you think they would ever buy anywhere else?) And, because our model cuts the cost of listing by up to 80%, a vast new range of businesses can afford to list, creating entirely fresh investment opportunities for institutional and individual investors.
Related: Satisfying A Key Niche
It’s one of those synergistic, seamless ideas that inherently translates into a reinvention of an industry. It is transparent, in that investors can use an app to get realtime information and make decisions about the companies listed with us. Also, our system is so granular that it can tell issuers exactly who is trading their shares. They can, therefore, control exactly how many and what type of shareholders they have.
The model is also democratic. It is principles-based rather than rules-based, acknowledging that entrepreneurs know best how to run their businesses and investors know best how to spend their money. Specifically, it is democratic in that it enables shared value. Everyone wins.
It is trustless in terms of relying on the generally agreed principles of the Companies Act to keep issuers both sustainable and answerable to their shareholders. We don’t impose additional rules on our issuers. Our market, which is everyone in Africa, is able to rely on consensus-driven definitions of business sustainability.
The trustless universe is still being defined by commentators and participants alike. However, it is already a practical reality and is happening all around us. Rather than waiting for it to be fully defined and ‘trusted’, focus on the fact that it’s a frontier. You get to make your own destiny. Go make it.
6 Ways To Become An Entrepreneur Without Starting From Scratch
You can get into the game with more than money.
Creating a start-up offers promise for generating revenue that can lead to big profits down the road. Most think that the only way to start a business is to build a product from ground up – layout the blueprint, make your first hire and build from there.
This isn’t the only way to start a company, especially if you want to become an entrepreneur but don’t have a concrete business idea or maybe you feel that age isn’t on your side.
I present to you six ways to become an entrepreneur, without starting a company from scratch.
1. Buy an existing business
One of the best ways to invest in a start-up is to buy one that is already in business. When you buy an existing business, you can reduce your risk since the business model has already been proven. There are tons of ways you can buy existing businesses, including via a platform, such as Flippa and BizBuySell.
For example, Flippa offers a way for buyers and sellers to meet and conduct business sale transactions for websites. As one of the largest marketplaces for buying and selling online businesses, Flippa facilitates the buying process as an auction-style platform where you can bid on an ecommerce business. These businesses are typically established and already have the traffic and revenue to support a viable business that you can later develop and scale.
BizBuySell offers a way for you to buy existing businesses but requires an application to join its membership. Whichever option you choose, just make sure to research the company, understand why the business is being sold and whether it fits your business and financial goals.
2. Offer your services for equity
Do you have any unique skills that a startup can benefit from? Are you a lawyer, accountant or marketing pro? List all the skills you can offer a startup to can help them build a better business and be crucial in their journey.
The next step would be to find start-ups that lack that specific skillset and offer it to them in exchange for equity. Professionals are known to get up to 20-40 percent in equity, depending on the current stage of the company. The earlier the stage, the larger share you could get.
If you’ve got a unique insight into growing a company using a marketing strategy you’re really good at, use that as your pitch to a start-up that is primarily run by engineers who don’t yet have a marketing professional on their team.
3. Buy a stake
You can also buy a stake in the company by investing cold hard cash. Just remember to do your research on the company and understand how the equity allocation works. For instance, a new start-up may offer equity equivalent to how much you contributed.
That means if you contributed $25,000 in a start-up with a $200,000 valuation, and the other investor contributes $50,000 while the owner contributes $125,000, you can expect a 12.5 percent stake in the company while the other investors have a much larger stake in the company.
This article was originally posted here on Entrepreneur.com.
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