Advisors or Mentors? How to Choose a Consultant for your StartupReading Time: 3 minutes
We live in a wonderful age for anyone eager to start their own business. Entrepreneurs have vast opportunities that only became possible in the last couple decades. You can choose whatever type of funding that suits your startup best, from angel investment to massive crowdfunding. Infinite knowledge of the whole world is available to you via the internet. You have instant access to any and all markets and partners thanks to globalization. Awesome!
However, there are still certain things that most startups lack, yet they either don’t realize this fact, or refuse to accept it. Those are experience and expertise. More often than not, a green entrepreneur has an ingenious idea in mind, a small team, a lot of passion. And little to no knowledge of how to convert them into a real and, more importantly, successful project. Luckily, there is a solution for this issue as well – advisors and mentor services.
Differences between an advisor and a mentor
How exactly do startups benefit from advisors and mentor services? To answer this question, we must first understand the specifics of the two, especially seeing how these words are oftentimes used as synonyms. There are three main differences:
- Relationship. An advisor is usually a professional whose main goal is to help develop the business, whereas a mentor is more of a wise and experienced friend with altruistic goals.
- Interest. An advisor is motivated financially, he requires some sort of payment – in the form of salary or in stock. A mentor generally helps for free, as a way of supporting industry or an individual.
- Period. An advisor is on your payroll, and will normally stay as long as you need them. He can work with you on a regular basis or ad-hoc. A mentor, on the other hand, is interested in long-term relations, so you can expect him to stay by your side longer, for years or even decades. However, his help can at times be rather inconsistent. Mentors often have their own businesses to mind and are not bound to be available on your demand.
Understanding these specifics, it should be easier for an entrepreneur to decide whether he should apply for an advisor’s or a mentor’s assistance. The most common way to do that is by forming an advisory board. It is a formal collection of both advisors and mentors who provide your startup with their advice and guidance. Even more important, they can caution you against making potentially ineffective or altogether harmful decisions.
Aside from advice itself, such a board solves a number of other issues. For example, it may fill gaps in the fields where the startup lacks professional knowledge, such as legal, organizational, or marketing matters. The advisory board also boosts a startup’s credibility, increases its reputation, and brings certain social authenticity to it.
Before inviting consultants
So, when should a potential entrepreneur start searching for advisors and mentors? The answer is – as soon as possible, but not too soon. First, one should undertake proper preparations:When should a potential entrepreneur start searching for advisors and mentors? As soon as possible, but not too soon. Click To Tweet
- Determine which knowledge, skills and, expertise your team lacks that you’re looking forward to compensate. Make sure your advisory board complements your team and itself, and consists of professionals from various important areas.
- Define responsibilities and compensations for advisory board members. It’s important to think through the power and rewards of the board in advance. Ideally, these paragraphs should be represented in an advisor agreement.
- Last but certainly not the least, approach both advisors and mentors as a professional, with a concrete offer. It’s their hard-earned knowledge and experience that you’re asking them to share, let alone their time. So do your homework first and develop a solid draft of your idea.
For starters, create a business plan and a strategic roadmap. Obviously, it must not be extremely precise or detailed. Just a global overview of your startup to share your vision with stakeholders. We recommend using Roadmap Planner, it’s a tool specifically designed for visualizing strategy. Download it here to get a 21 day free trial of this product (no cc required). First impression matters, so make the best of it with thorough preparations.
We hope this little guide helps you figure out why startups need consultants and how to choose them properly. Our question for you today – would you seek help for your startup from an advisor, or from a mentor, and why? Tell us in the comments below!