What's Better: a Mentor or an Advisory Board (or Both)?…

In the past year, the Small Business Administration (SBA) published its final rule for the Mentor-Protege program, an initiative that allows small businesses to pursue larger and more complex federal contracts by partnering with a larger company that makes its expertise and resources available to the smaller firm.

The Mentor-Protege program opens up lucrative business opportunities for small companies. But, the more important takeaway is that the SBA recognizes the value of mentoring — something that successful business leaders know firsthand.

Mentoring makes good leaders even better. However, many entrepreneurs are so caught up in tactical, day-to-day business activities that they don’t understand the importance of discussing big picture strategies with a more experienced business leader. As a result, they never achieve their personal and business goals, simply because they fail to pursue the strategic perspectives that good mentors provide.

Anatomy of a great mentoring relationship

The right mentor can have a transformative effect on a young entrepreneur. But what does a good mentor look like? What value can a mentoring relationship bring to your entrepreneurial career and the future of your company?

Although every mentoring process is different, there are at least three hallmarks that define the best mentor-protege relationships:

1. Industry introductions. A well-connected mentor can make meaningful and thoughtful introductions to key industry players. Introductions are crucial for new entrepreneurs interested in growing their businesses. It’s much easier to walk into a meeting with a new business connection when you have the support of someone he or she knows and trusts.

2. Assistance with goals and objectives. An experienced mentor can help define where you want to go and the path you need to take to get there. A mentor also plays an important role in holding you accountable for making progress toward your goals. As the owner of your business, there’s no one looking over your shoulder, telling you what to do each day. But, the right mentor can ensure that you’re moving in the right direction.

3. Lessons learned from experience. Experience sets successful entrepreneurs apart from the rest of the pack. An experienced mentor has been in your shoes and dealt with the same challenges you’re facing. In many cases, your mentor can tell you what works and what doesn’t, allowing you to benefit from the lessons they’ve learned the hard way.

Sometimes, even highly talented entrepreneurs just feel like they need a boss — someone to help direct their work activities. Although they don’t have any actual authority,  great mentors serve as boss-like figures by providing structure and high-level guidance.

Mentors vs. advisory boards

Some entrepreneurs need more than just a one-on-one mentoring relationship to help their companies grow. While a mentor helps you navigate personal challenges, an advisory board helps manage the strategic direction of the company. 

Advisory boards are typically comprised of various experts capable of providing insights about specific areas of the business. For example, you might have a lawyer on your advisory board to help work through legal issues and someone from a CPA firm to address financial concerns.  

Mentoring relationships are informal, while advisory boards are more structured. Also, advisory board members are usually incentivized to participate with financial or other rewards. But regardless of the motivation, it’s important to use the group’s time wisely and make the best use of the skills and connections each advisor brings to the table.  

How to find the right mentor or advisory board member

There’s an old proverb that says “when the student is ready, the teacher will appear.” Once you’ve decided you’re ready for a mentor, start looking at the people you already know. College professors, former bosses, family friends or even LinkedIn connections can make great mentors for a young entrepreneur. Ask yourself who you admire, and you’ll likely find someone who may be willing to offer regular guidance and support.

Advisory boards are trickier because they tend to be less personal. Look to your bank, your local Chamber of Commerce or professional industry groups for prospective advisory board members. Believe it or not, accountants are fantastic sources of referrals because they work with a wide range of professionals. The idea is to identify experts who can offer advice and guidance in areas where you lack knowledge or expertise.

After you have identified a potential mentor or advisory board member, the next big step is to approach them and ask them to work with you. Entrepreneurship is all about taking risks, so be bold and reach out to the people who will be most beneficial to you and your company. If the person declines, you’re no worse off than you were before. 

Strategic thinking is the single most important thing you can do to grow your business. If nothing else, a mentor or board of advisors forces you to take time out of the day to think about where your business needs to go and the steps it will take to get there. 

The bottom line is that entrepreneurs who participate in mentor-protege relationships are almost always more successful than those who don’t. And when you’re successful, it’s only a matter of time before a less experienced entrepreneur comes along and asks you to mentor them.