Business coaching has changed since 1997 when the industry was potentially started by Action International (or ActionCoach as it is now known). The company and potentially the industry of business coaching began back then in Brisbane, Australia where the company was first founded.
Being one of the first business coaches when Action franchised the idea was interesting times. No one had heard of the two words ‘business coach‘ together in a sentence back then and in the following few years, it just didn’t exist.
Because it was the birth of the industry, it could be whatever new business coaches and Action International chose for it to be with its new franchisees.
The primary emphasis of coaching was on sales and marketing, and educating business owners on these topics. The focus was on how to do the basics and how to measure results. That and a little on team building was about all that business coaching was for business owners in the market place.
Business mentoring was unheard of back in the late 90’s just like business coaching.
Since then, much has definitely changed.
There are business coaches and there are business coaches now – who specialise in numerous different aspects of growing a business.
Business coaches are similar but usually quite different to a business mentor so it depends what you and your business need more.
What is Business Mentoring?
Business mentoring is carried out between a guru and disciple as Wikipedia likes to describe it under mentorship.
A business mentor typically has many years and more often than not, multiple decades of business ownership experience in multiple industries. This practical, hands-on life experience is what they share with other business owners striving for success.
A business mentor tends to be quite knowledgeable on reading financials and systems. Marketing may not be something they are switched on with or competent on.
Most business owners delegate or outsource marketing to specialised marketing companies so very few mentors get hands-on with tasks such as writing their own ads, which is why their practical and real world understanding of effective marketing can be lacking.
A business mentor has experience to advise business owners on how to solve cash flow, employee, systems and growth challenges due to their own experiences in these areas.
They are educators and guides and typically work a more with established businesses.
A business mentor rarely works on changing people’s mindsets. They usually are not heavily into personal growth and so they tend to work more with reasonably successful businesses and assist them with growth and structure for that growth.
What is Business Coaching?
There’s no commonly agreed upon definition of what a business coach is, although some business coaches would state confidently that their definition is correct.
What business coaching was 20 years ago and what it is today is quite different so it depends on which business coach you speak to as to what the definition is.
The definition is what the majority of people think it is, not what business coaches say it is, in their point of view.
Wikipedia has its own definition as does the Worldwide Association of Business Coaches.
The emphasis on significant experience of the business coach is sadly lacking on both web pages of the two websites. It is mentioned under Coaching on Wikipedia, but not under business coaching.
Business coaching is about changing perspectives of someone, usually a business owner. It involves educating the coachee to improve their results.
In Australia and most countries in the world there is no license or minimum training required to become a business coach and therefore the industry is not highly regarded by the accounting profession in many places.
Many business coaches will state that coaching is about asking a lot of questions so the recipient can learn through self understanding and gaining realisations.
A lot of business coaches are like life coaches and assist business owners with mindset and changes in owners thinking.
Some of the coach’s service often includes personality or behaviour profiling education and for the business owner to understand themselves more.
Some business coaches focus on this heavily while others do not.
Choosing either a business coach or business mentor is the first step. The second is choosing one of the thousands of each if you’d like to take one on.
Which is Better?
It all depends on the needs of a business, its size in revenue and the business mentor or business coach you’re talking to.
Generally, start-ups and new businesses will benefit from a business coach.
A lot of, or most business coaches haven’t owned multiple businesses for over 10 years before they enter into the industry. That means their knowledge may not benefit longer established businesses with 10 to 50 or more employees.
A business coach is often a ‘how-to’ specialist suited to specific industries. They can have a good understanding of basics of marketing such as…
- Sales funnels
- Landing pages
- Cash flow and getting clients to pay on time
- Basic system creation
- Email auto responders
- Social media marketing
- Lead magnets
Some or all of these are important ingredients to learn in growing a business.
A business mentor is experienced in bigger businesses where the structure of a business comes into importance.
The topics a business mentor can introduce and discuss with the owner will often be based on these questions…
- When does a business need allocate a Supervisor or Manager role?
- What KPIs are relevant and important to track in a business weekly and monthly?
- How is the Gross Margin maintained and increased in a business?
- What financial ratios are important to understand?
- When is it important to have induction/on-boarding systems?
- What Net Profit Margin does a business need to aim for?
- How can the Net Profit Margin be increased?
These are just some of dozens of areas that a business mentor or business coach can assist a business owner with.
There are some great business coaches out there who have helped hundreds of businesses in achieving some great results, just as there are business mentors.
Its best to keep an open mind to both because their own title for themselves may not necessarily agree with societies. Some business coaches are more business mentors than coaches.
Some business coaches choose not to call themselves a business coach any more because of the often poor reputation they see online for what they provide.
A very good business coach is definitely a good investment as much as a business mentor is. The title they give themselves doesn’t determine what they provide as a service, nor their suitability.
How to Choose a Business Mentor or Business Coach
The above will help you to better understand the similarities of a business mentor and coach.
If you’re looking for one then there are some important questions to use when speaking to one, which can include…
- How many years have you been in the industry?
- What were you doing previously?
- What types of businesses have you worked with?
- Can you share a few results of clients?
- What outcomes could you see being achieved in my own business?
- How long will it be before I start seeing results?
There are many other questions you could ask however these are the more important ones to include.
Is a Business Mentor or Coach a Good Investment?
Yes, definitely. There are dozens of things to learn in business and learning them can be very expensive.
After many years of business mentoring and coaching, the two biggest expenses of any business have been identified as…
This is not a criticism, its simply a fact.
A business mentor or coach, in the grand scale of owning a business for 10 years, is not expensive, ignorance is.
Based on the facts that most businesses will fail without 5 years of starting, the cost of a business coach or mentor is very small compared to the cost of failure.
A business mentor or coach may cost $5,000 or $30,000 in a financial year, but that amount is actually very small compared to the improvement a business can achieve, with an experienced, result-focused mentor or coach.
In society, its very uncommon to obtain anything beyond 10%, or even 5% ROI in terms of cash on cash return, within 12 months.
Therefore if the cost of a mentor/coach is $30,000 and they achieve a Net Profit increase of the business of $10,000, that’s a fantastic ROI!
A lot of businesses sell for 3 times the net profit plus stock, so the person buying it is trying to get their coast of purchase returned in 3 years. In other words, they receive a third of their money back in Net Profit return per year.
Following that thinking, a $10,000 Net Profit increase should be considered a great ROI on a cost of $30,000 for a business mentor/coach.
The good news is, very few business coaches or mentors are at the “premium” pricing of $30,000 per year and many results of business coaches are measured in 6 figure Net Profit increases in a year. So the ROI is hundreds of percent in real terms.
If you can obtain 100% ROI on your cash anywhere, that’s OUTSTANDING isn’t it?
The question isn’t, is it wise to consider a business mentor or coach. The question is, which business mentor or coach is wise to choose?
Look at the results in terms of Net Profit increase of the clients of a business mentor or coach, or ask to see them. Check they are real businesses, with a real website and an owner you can identify online.
Keep in mind, many business owners do not want their results known publicly, due to competitive advantages, so business mentors/coaches are unable to state results sometimes.
If they are a great mentor or coach with 10+ years of experience, they will definitely have some impressive results.
Keep in mind the variable, which is you – the business owner.
Are you willing to follow instructions, ‘stay in the game’ for months and do whatever it takes that a business mentor or coach asks you to do and commit to your own success 100% – no matter what?
Then you’re a good match to a good business mentor, so take action and start your due diligence today to finding one who suits you and your business best.