Last month, I had the opportunity to speak with three groups about SCORE and how we coach small businesses to start, survive, and grow.
I like giving presentations like this. SCORE Mentors have a successful history of helping small businesses thrive across America.
I enjoyed my visit with all three, but my favorite meeting was with a group of seven startup business owners. Participants worked with the Small Business Development Center at the University of Wisconsin-Senior. Some were starting up businesses, and some were already operating businesses. The SBDC leader wanted the group to know about SCORE and our mentoring program.
SCORE Mentors know that new business failure rates are high: 30% fail in the first year and 50% fail by the fifth year. We also know the main reasons for failure. I also know from working with clients that their performance has been weaker than last year, and even in an election year, there is no sense that performance will improve.
I personally believe we are in a recession. And no matter which party wins the presidential election, it will take at least another year to see any turnaround. It would have been easy to share this doom and gloom with the group, but it would have been wrong and unkind. They were well prepared and moving forward with the SBDC program. Truth be told, I’d be full steam ahead in their place, but I’ll stick to these ground rules.
Find and work with a SCORE mentor. SCORE is the largest nonprofit organization for mentoring small business leaders. We have a cadre of over 10,000 mentors, many of whom are former or current business owners, all with strong business backgrounds in a variety of industries.
SCORE Mentors can tap into this talent base and team up with Mentors with special talents. In addition to Mentor, we have an extensive library of webinars, workshops, templates, testimonials, and articles. Our chapter has created a great Client Resource Guide that is available to everyone.
Create an advisory board. Advisory committees typically differ from boards in that they are less expensive, do not set policies, do not hire key executives, or do not hire a CPA firm to report to the board.
The board of directors serves advisory purposes only and does not participate in the management of the company. Members of our Board of Directors have entered into, or will sign, non-compete non-disclosure agreements. In addition to the mentor, board members can include members of other economic development organizations, vendors, other business owners in the area, or other business leaders in the industry who are not competitors.
Bankers, lawyers, and CPA firms are on hand if needed. Board members want a written business plan and data to understand your business. Monthly or quarterly meetings work.
Develop a risk management plan. Risks include physical damage from flooding, fire, snow, and the pandemic. Other risks may include loss of key customers, inability of vendors to supply products, and price increases. There may be new competitors or technological advances that are more attractive to customers.
Who will run your business if you become disabled? I had a union contract to negotiate and manage. I had a great mentor who taught me that unions, like many of the problems we face as business owners, are a gift to bad management.
During our risk management discussion, we discussed why small businesses fail. There are five main causes. Lack of cash flow, not enough sales, poor management, no business plan or poorly written business plan, and burnout. Measure your risks and incorporate mitigating those risks into your plans.
As I wrote above, take their place and take advantage of the preparation work they’ve done and yes, move forward full speed ahead and make your dreams come true, even in a down economy. Just don’t do it alone. Build a support team and ask them to help you. Doing so will greatly increase your chances of success and reduce your stress significantly.
I have been blessed with mentors and through SCORE I have learned that there are incredible resources to help you succeed. Find them and learn from them. SCORE is here to help.
Visit score.org. richard.jordan@scorevolunteer.org or 218-251-4413.
As a resource partner of the U.S. Small Business Administration, SCORE, which provides free business coaching and education, says it has helped more than 11 million entrepreneurs through mentoring, workshops and educational resources since 1964. SCORE, a nonprofit organization, is formerly a service unit of retired executives.
