What Does a Business Mentor Do?

1. What Does a Business Mentor Do?

2. If you’ve never talked to a business mentor then it may be hard to imagine the benefits of engaging one. When you first go into business for yourself, you may have found it a bit overwhelming with the large number of tasks that the role requires after the initial start-up phase. There are dozens of decisions to be made, such as; • Who to choose to build your business website • What social media platform to use • How to create content for posts • Whether to have a blog and how to write a blog post • What price point to use These are some of the ‘first phase’ of business decisions to answer and all of them can determine how fast your business grows in the first year or two. If you have a great source of leads and sales then your business can grow much faster and that’s probably the greatest challenge most businesses face.

3. After that early start-up and sales focused phase where the business gathers momentum and has the volume of sales to employee four or more employees at that time the business moves into the ‘management phase’ where the owner can leverage themselves through the employees and not have to do everything themselves. In the ‘management phase’ it’s a time to consider the benefits of a professional business mentor. A business mentor can assist the next dozen decisions that need to be made in the management phase. The common questions in the management phase include; • What to look for in choosing a dependable employee • What marketing strategies can increase leads cost effectively • Is the pricing points providing a high enough gross profit margin to cover overheads • Is the net profit margin too low or about right • What software does the business need for better management

4. In the management phase software is the major consideration so that you can manage your business better. Software choice is something most business mentors have experience with, especially if you have a service business mentor who has worked with hundreds of other service businesses. There are so many different software choices and choosing one can slow your business down in a year when you realise it was too simple and doesn’t cater to your business needs. A business mentor can assist not only with software decisions but all of the above points and much more. The primary aim of a business is to increase net profit. This can be achieved by increasing sales income or by reducing costs of sales or by reducing expenses, or by increasing the volume of work carried out by employees by increasing their efficiency or by reducing the time taken to carry out tasks.

5. All businesses generate income, but not all businesses are very profitable. The more profitable a business is, the more its value increases and the more secure it is against failure. A business mentor can greatly assist with increasing the profitability of a business. Increasing profitability is an uncommon skill. If it was common a lot more businesses would be very profitable. A good business mentor will know the targets to aim for to operate at the “very profitable” mark. For a lot of businesses that figure is above 15% Net Profit Margin. Many businesses struggle with low cash reserves and this is caused by two different reasons. The first is when money received from the sale comes after the work is completed, often 30 to 90 days later. This will cause cash challenges in the majority of businesses. Ideally, you want to be paid prior to carrying out any work related to the sale or before incurring any costs related to the sale. Unfortunately, most businesses don’t have the luxury of being able to change when payment is received or how much of the payment is received. If you do have that choice then aim to obtain as much cash as possible the soonest you can.

6. The second reason for cash challenges is due to low profitability or the business having a low net profit margin. If the business has a 10% figure then only 10% of cash received from the sale stays in the bank account. The rest goes out due to Cost of Sales and overheads. This is a simple way of looking at it however it is a useful way of understanding cash. If the business has a 20% net profit margin then out of a $1,000 sale, $200 is still in the bank account after all costs and overheads are paid. That’s twice as much as would be the case with a 10% net profit margin. A good business mentor will have a lot of experience with understanding finances and financial ratios to assist you in this complex area.

7. A professional business mentor can therefore usually pay for their fees with the increase in profitability of your business, and still increase your net profit after their costs. A business mentor can assist with how to implement systems, to clearly define roles of employees as your business grows, to assist with creation of an Org Chart, job descriptions, KPIs for roles and people and much more. Business mentoring is a fast growing industry due to the value it brings businesses. If you’d like to grow your business faster and easier, or to increase your business profit margins then a business mentor is well worth considering.

8. TIM STOKES Business mentor Sydney | Business mentor Brisbane Profit Trans4mations Phone: 1300 7 STEPS (1300 778 377) Phone: +61 7 3194 0477 https://www.profittrans4mations.com.au