Why A Mentor is Key to Small Business Growth and Survival
By presidential proclamation, November is National Entrepreneurship Month and a time for recognizing the grit, determination, innovation and contribution of America’s entrepreneurs and small business owners to the nation’s economy.
Amidst all the celebrations, however, it’s hard to ignore the fact that only half of all small businesses survive more than five years (source: SBA Office of Advocacy) and about 10-12 percent of all employee-based firms close each year.
There is growing evidence, however, that connecting your business with a mentor can change this statistic.
A mentor can be a game changer for small business
Research proves that small businesses that receive three or more hours of mentoring achieve higher revenues and increased business growth.
Even better, according to a 2014 survey by The UPS Store, 70 percent of small businesses that receive mentoring survive more than five years – double the survival rate of non-mentored businesses.
Small businesses agree. The same survey found that 88 percent of business owners with a mentor say that having one is invaluable.
“For many, starting a business can be overwhelming – it’s no longer just about exploring a passion or following a dream,” said W. Kenneth Yancy, chief executive officer of SCORE, a non-profit mentoring and business counseling organization. “A mentor can help navigate the complex challenges that often come with being a business owner, and the guidance from someone who has been there themselves can be a real asset.”
Mentoring at work: Cloth Interiors
Having a mentor can be an invaluable resource for anyone who has chosen to go it alone in business, but how do these relationships work?
Teri Cardinelli, proprietor of Cloth Interiors, a custom window treatments and fabrics showroom, learned a lot from her mentors by putting their experience to use in her own.
Having operated a part-time business out of her Kennebunk, Maine, home for 25 years, in 2012 Teri decided it was time to commit full-time to her business and move out of her home office.
Teri has tremendous talent and technical skill, but needed help getting the business details organized. She started attending two evening workshops offered by SCORE – one on marketing and other on finance. She also connected with two SCORE mentors, Sandy Carlisle and Lisa Allison. SCORE mentors deliver free and confidential advice for start-ups and existing businesses.
“Teri had extensive background in her craft, which she needed to recognize and draw upon. Most of her issues were in the areas of business management and marketing, which SCORE is exceptionally well equipped to address,” said Sandy.
With SCORE’s help, Cardinelli started making a plan for her business; found a perfect location; organized her bookkeeping, contracts and pricing; and got ready for her grand opening in May. She did all this while completing jobs, adding new customers and showing a solid profit and positive cash flow in every month of 2013.
As Cardinelli explained, “From that first meeting, I got the validation I was on the right track, experience to point me in the right direction, wisdom to guide me through my ideas and suggest better ones, and encouragement to know what my real value is to myself and my clients. That is a lot to have on my team. Because of Sandy and Lisa, my confidence just kept on building and my business began to grow.”
One month after its grand opening on May 15, 2013, Cloth Interiors of Kennebunk, Maine was nominated by the Seacoast Chapter of SCORE as a small business success story for 2013.
Teri Cardinelli’s experience is one of many success stories made possible through small business partnerships with SCORE. With 320+ local chapters and 11,000 volunteers, SCORE can match small business owners with mentors across 61 industries, both in-person or over email.
Sponsored by the SBA, SCORE also provides inexpensive or free business workshops, webcasts and free business tools, templates and tips online. SCORE also offers a free email advice line. Simply type in your question and a SCORE mentor will contact your directly to see how they can assist.
Other sources of counseling and support
SCORE is not the only source of support in the community. Check out these other resources committed to making your small business a success:
- Small Business Development Centers (SBDCs) serve more than one million small businesses and aspiring entrepreneurs each year through free face-to-face business consulting, low-cost training (covering business planning, how to access capital, marketing, regulatory compliance, exporting and more). Funded in part by the SBA, SBDCs represent the most comprehensive small business assistance network in the U.S.
- Women’s Business Centers are part of a nationwide network that provides business training, counseling and other resources to help women start and grow successful businesses. Tied closely to the SBA, WBCs are also able to advise women about business financing such as SBA loan programs. If you are interested in selling to the U.S. government, WBCs can also provide guidance and training resources to help you get started and navigate the process.
- Veterans Business Outreach Centers provide training, advice, mentoring, business planning assistance and much more. Funded by the SBA, there are 16 centers across the U.S. ready to help.
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From Military Base to Business: Resources that Help Veterans Make the Move to Entrepreneurship
During the week of November 3-7, the nation and the U.S. government recognized and celebrated the second annual National Veterans Small Business Week. And rightly so – one out of every 10 small businesses in American is started by a vet. These companies employ nearly 6 million workers and generate more than $1.2 trillion in revenues. Moreover, statistics show that the success rate of these veteran-owned businesses is higher than other startups – perhaps a reflection of the discipline, skills and leadership experience acquired in military service. As SBA administrator, Maria Contreras-Sweet states, “…this is a talent pool we must nurture.”
To help veterans succeed in the transition from service to entrepreneurship, extensive support from both the public and private sector is readily available. Here’s a rundown of free training, financing and mentoring opportunities available to vets.
Get your business off the ground with Veterans Business Outreach Centers
Whether you need help putting together a business plan or need the advice of a business counselor, SBA’s Veterans Business Outreach Centers (VBOCs) provide free entrepreneurial development services including business training, support, mentoring and more. VBOCs are situated throughout the U.S.
Boots to Business Program – SBA and DoD help vets make the transition to business
Boots to Business is a free, three-step training program developed to introduce and train transitioning service members to business ownership. The program is sponsored by the SBA and is offered as a component of the Department of Defense’s (DoD) redesigned Transition Assistance Program (TAP) renamed Transition GP.
Boots to Business gives vets the tools and knowledge they need to identify a business opportunity, draft a business plan, connect with local small business resources and launch their small business.
Need capital? Low-fee loans and workshops boost veterans’ access to funding
If you need financing to start or expand, consider the SBAExpress loan program. It offers low-interest rates and streamlined, expedited procedures for members of the military community (responses to loan applications are made in 36 hours). It’s also worth knowing that fees on all SBA loans have never been more favorable and are currently set at zero for loans under $150,000.
To help you take advantage of capital opportunities, check out VetCap (capital for veterans) event in your region. VetCap national workshops are focused on educating veterans on where and how to raise capital. The workshops also connect veterans to a network of financial sources. More information on specific VetCap events is available through SBA’s district and regional offices.
Woman-owned veteran small business programs
Resources to start up and grow a woman-owned veteran small business are at your fingertips!
- Women's Business Centers (WBCs) are designed to assist women to start and grow small businesses. WBCs operate with the mission to "level the playing field" for women entrepreneurs, who still face unique obstacles in the world of business. WBCs offer comprehensive training and guidance on a variety of topics in many languages to help them start and grow their own businesses.
- Veteran Women Igniting the Spirit of Entrepreneurship (VWISE) is an entrepreneurial training program that assists female veterans to discover their business passion and learn business-savvy skills. VWISE is a three-phase program that includes online self-study courses, a three-day conference, and ongoing support from mentors. To apply, visit Whitman.syr.edu/vwise.
Check out SBA’s women-owned business guide for additional information.
Events, seminars and fairs
Bookmark SBA’s event calendar for info about nationwide and online veteran-specific training, networking and outreach events.
Other essential resources
The SBA offers a wealth of resources for veterans through its Office of Veterans Business Development. For a useful round-up of just how the agency can help you view this quick video.
Other public and private sector resources include:
- SBA’s Veteran and Service-Disabled Veteran Small Business Guide – A one-stop portal with links to programs and resources, financing information, government contracting opportunities and other resources.
- Small Business Development Centers (SBDC) – If you don’t have a Veterans Business Outreach Center in your area, you’re very likely to find an SBDC nearby. Each center provides business training, seminars and one-on-one consulting. Sponsored and partially funded by SBA, these centers also offer support for veterans, including help with understanding their financing options.
- SCORE: Counselors to America’s Small Business – SCORE is a nonprofit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship. Volunteer business counselors, advisors and mentors provide free, confidential business counseling; free business tools; and inexpensive or free business workshops to aspiring entrepreneurs and small business owners.
- Vets in Technology – Entering the technology field? Get help from Vets in Technology.
- VetFran – Interested in opening a franchise business? VetFran supports veterans and their spouses’ ability to access franchise opportunities through education on the franchise industry, financial assistance and industry mentorship.
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Jumpstart Your Woman-Owned Veteran Small Business with the SBA Administrator: Join the Live Google Hangout-On-Air
In honor and celebration of Veterans Day, join U.S. Small Business Administration (SBA) Administrator Maria Contreras-Sweet as she engages women veteran entrepreneurs during a live Google Hangout-On-Air on November 11 at 1pm ET. The Hangout can be viewed on SBA’s Google+ page and YouTube channel. You can RSVP and submit your questions before or during the Hangout or by using the hashtag #VetsHangout.
Since being appointed by President Barack Obama to lead the agency that advocates and champions our nation’s 28 million small businesses, Administrator Contreras-Sweet has made it a priority to meet with small business owners all over the country, to hear about their experiences, challenges, and opportunities in person and digitally. So join the Hangout and learn how you can use the SBA to boost your small business straight from SBA Administrator Maria Contreras-Sweet.
Maria Contreras-Sweet, SBA Administrator
Carmen Nazario, Owner of Elyon International
Sheila Jaczlics, Owner of Pathfinder Systems
Tuesday, November 11
1:00 PM ET
RSVP and Submit Your Questions:
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What Kind of Business Insurance Do You Need?
Business insurance is one of those gray areas. Do you need it or don’t you, and, if so, what kind? For certain businesses – for example, amusement parks and health care related industries – it’s an absolute necessity from the get-go, but what if you run a freelance business or engage in low-risk work? Is business insurance a requirement?
While it may not seem so from the outset, as your business grows and takes on additional risk, business insurance quickly becomes a must. The problem is that many smaller businesses ignore the issue of insurance until it’s too late.
One reason for this is that many small businesses often assume that by forming a Limited Liability Company (LLC), they’ll be afforded protection in the event of a lawsuit. However, while this structure can protect you from personal liability for business decisions or actions of the LLC – the liability protection is limited.
For example, if you inadvertently break intellectual property laws or are sued by an employee, you could face a lawsuit and potential losses that being an LLC cannot protect you against.
Of course, LLCs aren’t the only business structure that can benefit from business insurance. Sole proprietors, partnerships, S-Corps and Corporations all need insurance.
But what kind of insurance do you need? Here are four forms of coverage that you should consider (over and above healthcare insurance and any employer insurance obligations):
General Liability Insurance – This is the silver bullet for protecting you, your business and your employees from any damages incurred as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.
General liability insurance is often sold as a catch-all and includes numerous add-ons that you can tailor to your business and its degree of risk. For example, if non-paying clients are a concern, you can add accounts receivable protection to your policy. Inland marine coverage is another option that can protect against loss or damage to business property when it’s not on your premises.
It’s also worth noting that oftentimes a client will request evidence of your certificate of general liability before doing business with you – another good reason to secure a policy before it holds up any potential new work.
Property Insurance – Whether you own commercial real estate or run a home-based business, protect your assets and the equipment, fixtures and furniture inside it. Property insurance is often rolled into general liability insurance, check with your broker to be sure. Home business owners should also be aware that home insurance doesn’t always cover home-based business losses. You may need to add additional riders to your home insurance policy or get other insurance to cover additional risk.
Professional Liability Insurance – Also known as errors and omissions insurance, this insurance protects against errors, malpractice and negligence in the provision of services to your customers. This is often recommended to businesses who provide services such as tax or financial advice, as well as physicians (who are often required by state law to carry this insurance).
Product Insurance – This protects businesses that manufacture, distribute and retail products against any financial loss incurred as a result of a defect product that causes harm or injury. Product insurance can also be tagged on to a general business liability insurance policy.
The Bottom Line
Insurance can be a confusing business. A good insurance broker can help demystify this process and put together a package based on your unique needs. Once in place, don’t forget to keep your policies current and under review (for example, if you take on employees or new assets).
Check out SBA’s Business Insurance Guide for more information and some useful tips on buying insurance.
Disclaimer: The information in this blog does not constitute legal advice. Seek the services of a lawyer if you have any questions about business liability.
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