Business mentorship or coaching can be of great value to any person at any stage of their business venture. Within the context of the constraints of the Thousand Rand Challenge an outside perspective from someone with business experience can help to short-cut many of the problems that could overwhelm the start-up.
Support for any micro-business is about speed. The money for investment is too little, and the empediments too great, to spend time learning the hard way.
That is where a mentor comes in.
The definition of mentorship Edit
Much of mentorship in the development sector has become distanced from the very things that are taught: that goods have a value and must be paid for. Mentorship has a value in the time and skill that the mentor brings to the relationship.
The role of the mentor is as follows:
- the mentor is a guide
- mentors help prevent the client from making mistakes and attempt to assist them in making decisions
- advice is based on the experience and perceptions of the mentor and is offered for use
- mentors never, ever,tell clients what to do - all decisions will be made by the client
- if the client chooses not to take the advice and do their own thing then that has to be their own choice
- individuals are responsible for themselves
- mentors (and suppliers of benevolence of any type) should not make the assumption that clients are incapable
- mentors do not work for free unless the consultant - in his or her individual capacity - chooses to do so
Most importantly: the business belongs to the client, not to the consultant.
Mentors do not:
- arrange basic services (telephone, electricity, stock supply, etc.) for clients
- collect debts from or for clients
- chase clients to fix problems in their business
- operate the business on the client's behalf
The best person to run the busines is the owner of that business. If the client does not understand the importance of these things, their business is doomed anyway. The mentor is not expected to achieve miracles; they are consultants.
The mentorship process Edit
The following is a generic mentorship process and may be used for most types of economic development / business creation projects. These are the general skills and practices required of trained mentors for support of candidates entering the Thousand Rand Challenge. The Guide to running a TRC gives a large-scale, project management view, of the Thousand Rand Challenge.
Pre-assessment: Awareness to Assessment Edit
Pre-assessment of individuals before they join any scheme is crucial to the success of that scheme. It is likely that more than 90% of applicants may be screened out at this stage of the process.
Pre-assessment is divided into two parts:
- Assessment of business idea and client skills:
- Submissions by client detailing the basic idea they wish to develop, their skills, experience and resources (financial and physical) that they will dedicate to the business.
- The alignment of the client and the proposed business are assessed (it should be feasible that the client will actually relate to the business; the business should not have been red-lined as already oversupplied; it must be financially likely that the client can succeed).
- Assessment of client personality profile:
- Client is interviewed to assess their character and personality: do they have a history of giving up / persistence; how do they cope with difficult situations; do they get passionate when discussing their ideas; are they uncomfortable being probed; how do they respond to being doubted
- A report is drawn up giving the client a rating and recommending a course for procedure
The TRC assessment criteria of any participant should be used during the pre-assessment of the idea, and then during the interview.
Should the client be approved here then a consultant will be assigned and they can enter the next phase.
Business Plan Development and Training: Assessment to Validation Edit
Once a consultant is assigned then they embark on the following process (dependent on client needs):
Training Programs Edit
- Motivation and choice of appropriate products
- Development of the products in accordance with the strategy
- Development of the business strategy:
- How do I find and keep customers?
- How do I know whether I’m making a profit?
- How and where do I get finance?
- Preparing the financial information from accurate costings
- Developing the marketing plan:
- Phase 1: Analysing the market and the competition
- Phase 2: Choosing the target market
- Phase 3: Determining your marketing strategy
- Phase 4: The product life-cycle
- Basic regulations and legislative requirements for business
Business Plan and Strategic Development Edit
- Collection and analysis of business information, screening of business idea
- Guidance in business plan requirements, market research, competitor analysis etc
- Marketing and product development strategy
- Financial plans: Income Statement, Balance Sheet & Cash Flow
- Introduction to finance process and options
- Handholding for final business plan development, and business start up
- Skills transfer in presentation skills and all other stages of the process
Marketing Strategy and Brand Facilitation Edit
- Collection and analysis of business information
- Developing a marketing plan entailing:
- Industry analysis
- Competitor analysis
- Supply analysis
- Consumer analysis
- Development of marketing strategy
- Creation of appropriate brand
- Development of marketing materials to complement the marketing strategy
- Implementation of the marketing strategy
- Skills transfer on marketing and communication skills
Once the plan has been produced it is essential that the client tests and verifies their assumptions. Market testing of the product creates a track-record for the success of the business and improves the chances of the business receiving finance. It will also be necessary to create an implementation plan (a timeline) of steps to be followed from finance to first day of trading.
Evaluation and Accreditation: Edit
An evaluation is a structured process of reading and assessing a written business plan for a start up business (i.e. a business that has yet to begin trading).
The result is not a guarantee of success but is an evaluation of the critical factors that should have been considered in the business plan prior to investment and implementation.
The following factors are assessed:
- Executive summary
- Level of Interest Raised (Viability of Idea)
- Handles Relevant Issues
- Product idea or service
- Description of the Business and Understanding of Industry
- Competitive Environment
- Client Environment
- Financial Analysis
- Management skills
- Critical Analysis of Business Requirements
- Strategic Formulation and Risk Analysis
- Financial Analysis of Strategy Formulation
- Strategy Implementation, Timetables and Milestones
- Final observations and recommendations
- Evaluation and control
- Overall Evaluation of Strategy
- Recommendations and Conclusions
- Overall evaluation
- Viability of Strategy
- Business Plan, Layout and Believability
Access to Finance: Renovation to Implementation Edit
In this particular instance, where the business plan has been developed exclusively for participation in a Thousand Rand Challenge, the plan will be submitted to the project manager for approval and a final decision about financing the business can be made.
Once finance has been approved then the mentorship process can begin.
Mentorship: Implementation to Renewal Edit
The timeline is followed to assist the business to get up and running. Thereafter the business plan forms the foundation for the mentorship process:
- The business plan is developed as part of the general consulting service and a set of sales targets and business objectives are prepared.
- The client tracks these targets as part of their bookkeeping system and the consultant systemically evaluates the relationship between the targets and the real situation.
- If the client is surpassing the targets then we have been conservative and we evaluate the capacity of the business for such rapid expansion and develop a plan accordingly.
- If the client is failing to reach the targets then re-evaluate the marketing strategy or assess the reasons for the failure. Either new targets must be set or an entirely new strategy must be developed. Failure to act timeously will result in the business failing.
- If the targets are on track then monitor and support the client.
The process is to assist the client to become entirely self-sufficient. Once the mentorship process is complete and the client is able to understand the cyclical nature of their industry (and the need to continually renew and redevelop their products to meet changing client expectations) then the work is complete.
Monitoring: Renewal to Awareness Edit
The occasional courtesy call will serve to track the clients and enable them to ask for help. It may happen that, as they grow, they have new need for a complete consulting process to begin again.
Whatever happens, they will have the tools they need to continue the process of their own development.