The Collins English Dictionary defines mentor as a “wise, trusted advisor, a guide”.

Nearly everybody has someone they turn to in times of need for that little fillip to help them through life’s journey. So too, in business can a mentor provide some well-founded advice to overcome an obstacle, solve a problem or encourage a move to the next level.

Unfortunately many small business operators are unaware of the benefits of engaging a mentor to help them achieve maximum business potential.

Being proactive is the key, be it for a beginning business, developing business or an established business that may be encountering problems or just someone who isn’t sure how to take the next step.

Make the decision to act early rather than late as it is easier to maintain than fix. Once engaged, a business mentor is able to develop, with assistance and cooperation from the business operator, tailored solutions and programs.

First step is a business health check.

Areas of concern, issues or problems are identified and prioritised for rectification or improvement. As the business operator you are given practical advice that works for your business, you will increase your knowledge and skill base and feel more confident by the encouragement and professional support.

Business mentors’ suggestions and ideas are bias-free, non-emotional and impartially made with complete integrity based on their broad industry experience. This experience is too valuable not to be accessed. Mentors bring clarity to business issues and provide more efficient ways to achieve goals and objectives. They provide options and strategies to plan and implement improved business practice.

Two case studies illustrate this point.

One involves improving marketing resources. This business already operated a six-figure marketing budget. Research covering the previous three years showed 30% to be ineffective. This money was redirected to more effective successful marketing strategies.

Not a bad result for a few hours with a business mentor.

In the second case study, the business wanted a more in-depth understanding of the financials. A range of spreadsheets covering direct and indirect costs, break-even calculations and profit tables was examined. Better financial decisions were then made based on this examination with immediate and effective benefits.

Sometimes business operators think it is a sign of weakness or failure to access a mentor. Two examples from quite diverse fields demonstrate this is not so.

Businesses do face many challenges and a business mentor can be a vital part on the road to success. Shop around, choose one for you. There are a number of State and Federal programs available to help business operators working in conjunction with business mentors advance their business development.

How often do we hear in the after-game wash up a coach say, ‘we lost concentration, took our eye off the ball and it cost us the game’.

Sport is only a game; business is your livelihood.

Lifting your business game then becomes serious, sometimes requiring outside help, a coach if you like, alerting business managers to looming concerns or identifying areas needing adjustment.  Coaches - business mentors provide expert appraisal and analysis and make recommendations for remediation. Often problems are quite simple needing only an impartial business health check to pinpoint a problem enabling business to return quickly back on target.

If the way has been lost, even slightly, don’t pretend it’s not happening. Face the fact that the annual plan may have to be tweaked.  Not withstanding anything else, financial circumstances have certainly changed since July 2009.  As I have said before in this column not ALL problems can be foreseen; but if business plans have been monitored regularly most should have been avoided.  If the concern is not easily identified or remedied – again, seek help.  Businesses do lose their way and without direction can quickly become unprofitable.

It is vital that a business knows exactly where it is at this time of the year because at the time of going to press there are only about seventy days to next financial year.  What then still needs to be done?

Business managers will be conscious of working towards the current year’s goals.  What was to be achieved when setting out last July?  Is the business still on track?  Have all, some, none of the targets been achieved?  A quick revisit to the business plan will reveal if the eye has been inadvertently taken off the ball.

A worthwhile tactic at this time is to work backwards, that is envision the end of year goal, then organise what needs to be done to achieve it from where the business is now.  It is not too dissimilar to a batsman envisioning a century and working his innings in batches of ten runs at a time.

Both a long innings and achievement of year-end targets need firm foundations.  Are resources that are currently in place in the business able to provide that foundation to support progress to the end of financial year goal?  Again, if there is uncertainty seek a mentor’s help.

Hopefully none of the above will prove too traumatic and the business is ideally placed to move ahead in July because planning is well in hand for 2010/11.  Isn’t it?

Oh, and what about 2012, 2014, 2016?  How is the business to be situated then?

Most businesses want to change but are not sure how to improve the business. In my 14 years of business mentoring, I have found owners will invest resources and want the best results for their investment. Sounds fair enough, but what should the business owner be investing in, new equipment, staff, business advice, education, new skills, training? There can be a long list of requirements. Answer – business owners are always looking for efficiencies, but what about change?   

If an owner doesn’t have the skills set to effect the changes, how does the business owner know what to look for and how to assess it?
 
Generally speaking I have found that most obstacles in business are knowledge and information based. Knowledge could include Small Business Management skills, Technical knowledge, Communication skills, public speaking skills etc.    

Ego and Pride also has a fair bit to do with the resistance to change.  Year after year the same problems, the same cash flow issues, the same staff issues and the same tax issues, the same profit issues.        

Growth is about Change, Status Quo is about Change, and if we don’t change we will become extinct. Change requires courage and business owners need to be open to new ideas, adapting old strategies and adopting new ones. The strategies that worked 10 years ago, are not working today; its time to find some new ways of conducting business (Change).
Organizations that are slow to change or don’t respond could find it difficult to maintain current profitability. Owners that want to improve the position of the business are open to Change. If we change nothing, nothing changes.

Think about creating a new culture in the business, one of education and training. Look at new techniques for performance, identifying those areas of change will require a thorough investigation. Be open to a range of options and understand that to change, the first thing is “Are You as a business owner Ready and Want to Change”

In Summary – barriers to change are technical and personal.

We must know the costs. Best practice suggests that every business should have a financial budget for each financial year. If the business doesn’t have one then now is the time to prepare one. The first budget that should be prepared is the cash flow budget and profit and loss budget. It includes forecasting sales, expenses and capital requirements.    

When we analyze the profit and loss report, cash flow forecast report and sales budgets reports; compare the budget to actual performance regularly. Gain an understanding of the cost centres and understand the characteristics of each one. We know the constant costs such as rent, insurance wages etc, but what about all the variables?  What impact do they have on cash flow?    
The same understanding is needed for sales performance - how are sales performing to expectations. Are there budgets in place for the sales team? What are the direct costs associated with each sale? A key area linked to income is the costing of the marketing plan which measures the return on investment for each initiative. Knowing the numbers here can lead to increasing the marketing efforts into activities that are working and get rid of the ones that are not working.    

Planning is essential for business. It is not a “one-off” activity; treat it as an ongoing process. It can provide the business with the overall direction and a summary overview of the way it is likely to operate and an indication of how profitable and viable it is in the market place.

Knowing the numbers will be useful in looking at the assets needed to operate the business, ensuring the business can raise the capital to finance the assets needed. It will also make sure that the business has the funds to meet the commitments as they are due.

It helps the owner know what to look out for and what to control. The owner can make informed decisions based on factual information, not just guesses. Without knowing the numbers we are flying blind.  In summary there are numerous budgeting templates out there so I would suggest talking to your accountant and bank manager.

What is this planning all about?  It is a document that defines the business, a bit like a Road Map for the next 12 months. It identifies your goals, and assists in the daily running of the business. The development of the plan encourages the business owner to write down key objectives, helps allocate resources properly, provides specific and organized information, and is a crucial part of the financial package.

The benefits of preparing the Business Plan are; it sets out a clear direction to help ensure that the opportunity you have identified matches your goals and ambitions. Planning allows the business to examine ideas carefully, and assists in the decisions covering time, resources and financial commitment. A key area in the development of the plan is that it helps challenge old ideas and creates a climate for new innovations.

The main areas that it covers includes an Executive Summary(key points),  a marketing plan, operations plan, management and staffing, financial forecasts, risk assessments, an action plan, and I would ad market research information as well.

I have found from my experience that there are many barriers to planning which include fear of the unknown, fear of the future, fear of failure, and fear of success, and how do we write them. The business is changing quickly and planning is not seen as worthwhile.

Before starting the business plan obtain advice from your accountant and bank manager, and check out the templates. There is a wealth of information and resources available and source a template that suits your business. 

The business plan doesn’t need to be complicated. They are a desk top document that is used daily to measure the performance of what has been planned. When it is measurable it is easier to evaluate and manage.