Someone once said that experience is what you need right before you get it.
We’ve all learned by making mistakes, and we all know the value of learning from other people’s mistakes. Being a new and inexperienced entrepreneur isn’t easy, even if you have a great idea. In fact, only ten percent of new businesses last for more than five years. However, seventy percent of entrepreneurs who buy an existing business succeed during that same time. The difference between the two is learning from other’s mistakes, and successes. This is called mentorship.
Buying an existing business has numerous advantages, but one of the biggest for new entrepreneurs is the experience of the previous owner. Entrepreneurs who start out on their own fall prey to many common mistakes, while those who have a mentor learn from their mistakes and avoid similar pitfalls. I grew up with parents that didn’t run businesses. It wasn’t part of our dinner conversation, and I had little to no exposure to what it takes to run a small business. While I read everything I could to prepare myself, nothing compared to finding good mentors who guided me through those first challenging years. I still made mistakes, but I could have made a lot more.
There are so many lessons only business owners know. For example, did you know that flower shop suppliers can raise their prices by as much as 300% in February? A new business owner who is unaware of that may order too many and not have the cash flow to cover delivery, which could be enough to put them out of business. Avoiding expensive mistakes like this can be as simple as mentoring under someone who has run a business successfully for 20 or more years.
Finding business owners willing to do this is a lot easier than you may think. SuccessionMatching.com is an online platform for business buyers and sellers. Seventy-six percent of their business owners looking to sell say they would stay on as mentors. In addition to their experience and knowledge, buying a business also gives a new entrepreneur the advantage of an existing cash flow, knowledgeable staff, access to financing, and brand recognition among other things that can help a new entrepreneur make it through those first difficult 5 years.
In the business world, you can’t always afford to get experience after you need it. For new and young entrepreneurs wanting to get ahead, the quickest way might just be mentoring under someone who’s made it this far.
Author: Alison Anderson