As per an article in Forbes 9 out of 10 Startups fail. This is a staggering failure rate and I am sure that something can be done by the ‘entrepreneurs’ to improve this ratio. Even with SMEs majority of them fail within the first two years and only a handful make it beyond 5 years and how many grow into ‘large enterprises’ is again a big question mark?
So what can be done to improve the success ratio of Startups or improve the growth of SMEs? One of the problems that I can think of is lack of ‘business coaching’ to the entrepreneurs. I would say that one should hire a ‘business coach’ even before we start a venture and certainly if you have been in business but haven’t thought of hiring a coach so far!! So how can a ‘Coach’ improve the success ratio of a Startup or improve the ‘growth rate’ of SMEs:
- In the Startup phase: many a times an individual or a group of individuals think that they have a brilliant idea or a product and they feel that it’s the right time to quit their job. Often they fail to do their research and identify the challenges that could come their way. From my experience (having being involved in launch of couple of startups and mentoring a few), I can confidently say that it’s worth your while, to invest money in a ‘business coach’. A ‘coach’ will draw a scientific roadmap on where you would like to go, what are the challenges that you are likely to face and what are the action items that you need to take, to reach your goal. He / she will also share with you the kind of habits and behavior that may be needed to reach your goal. Most importantly, they will also help you with the tools and resources that you may need. The ‘coach’ will engage with you at the agreed frequency and review the progress made and agree on the sub-goals that need to be accomplished before the next meeting. You are going to take a huge risk by becoming an entrepreneur, you will be investing some of the most productive years of your life in the venture, your decisions can impact possibly the rest of your life, so shouldn’t you invest to hire a business coach, before you take the plunge! So what are the other benefits that you can derive by hiring a “business coach”:
- A coach will help you in defining time bound goals that you would like to achieve
- A coach will give you the tools and resources
- A coach will push you to do more than what you would have possibly achieved on your own
- A coach will help you in looking at some of the ‘blind spots’ that otherwise you may have missed
- A coach will help you become objective, rather than getting emotionally attached to your idea / product
- A coach can connect you to Mentors and other experts that could help you in achieving your goal
- A coach will also identify the ‘spiritual, emotional and physical / health’ aspects that you may need to work upon.
- A coach can help you in identifying the ‘vision and mission’ for your venture.
- For SMEs: whether you are in manufacturing or service industry, the challenges more or less remain common. Some of the challenges that most SMEs face are:
- Limited number of promoters, not enough people to delegate to
- The promoters may have expertise in one or two areas like Finance, Sales, Operations etc. but what about IT, HR, Customer service, Strategy, TQM, Lean manufacturing etc. Do you hire all the resources or you outsource the activities?
- How to hire top talent
- How to innovate
- How to ensure that you are one step ahead of the competition
- How do you raise funds and working capital
- How to network
- How to expand, especially into international markets
- How to increase revenue per customer
- How to bring new clients on board
- How to build an efficient supply chain management
- How to implement the best HR practices, including employee engagement, reward and recognition etc.
- How to do succession planning
- Legal and statutory compliance
- Risk mitigation
If you are facing any of the above or another challenge; you should go ahead and hire a ‘business coach’ and you will see the difference.
Note: the coach that you hire may or may not be from the industry but as mentioned earlier, he / she will bring in new insights, new methodology and objectivity in your entrepreneurial journey and it’s bound to deliver incremental results.
So what are the things that you should look for in a coach:
- Someone who is certified by a professional body like ICF, CCA, ACTP, CTI etc.
- Someone who has professional and entrepreneurial experience
- Someone who has actively coached people
- Someone who’s known for his / her integrity, as you will be sharing many confidential things
- Someone who will push you to do more
- Someone who’s well networked in the industry
- High on emotional intelligence
- Perceptive, intuitive, curious
- Genuine interest in the client and their success
- Humble, caring and nurturing
- Walk the talk, being a role model for others
- Disciplined, methodical and organised
- Creating a non-threatening, open environment
- Tough when needed
- Giving unbiased feedback
If you are looking for a business case, before you hire a coach; surveys show that the ROI on business coaching is very high. One study done on a Fortune 500 company revealed that executive coaching ROI was as high as 529%. Another study showed that for every dollar invested in coaching, the return was $7.90. That’s a whopping 690%! These statistics show just how strategic business coaching increases your business performance.
As always, I look forward to hearing from you, especially if you are an "Entrepreneur / Startup or SME"
The writer is CEO & Director of AVTEG, a skill and talent development organisation and he is an ICF certified coach.