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Biz Mentor's Blog

A blog on business mentoring, executive coaching and career transition coaching by Ross Nichols, the business mentor and coach.

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Funding for New Ventures: Banks v Crowds

This morning’s announcement by Lancashire Council of its peer-to-peer lending scheme for business is to be applauded.  It is the Council’s response to the need for business to gain access to funding, which is critical to stimulate economic growth and help the UK climb out of its economic difficulties.  The Council will invest £100K into local businesses using Funding Circle, a ‘crowd funding’ marketplace where people lend directly to small businesses, in essence bypassing the banking system. Lancashire Council will fund about 20% of a loan to a local business.  Funding Circle assesses the credit worthiness of the business and then posts the loan on its marketplace [website].  Investors then choose which type of businesses to lend to, and bid the amount of money they wish to lend from as little as £20.  The risk is spread across many investors, each investing relatively small amounts. 

To illustrate why we need innovative schemes like this one in Lancashire, consider a recent client of mine who had developed a highly innovative engineering product and needed finance to get the product to market.  Despite it’s great potential and the backing of the Technology Strategy Board, the banks all said 'no’ - to be honest it was more a case of 'the computer says no’.

After researching how he could protect his intellectual property, I investigated the myriad of schemes on offer for raising finance by equity, debt and grants. Once I’d checked the small print for each scheme and consulted various experts such as bank corporate finance managers, angel investors, numerous websites and the Better Business Finance for You helpline, there were only 3 options with any realistic probability of success.  These were: partnering with an established company using the Corporate Venturing Scheme, which provides tax incentives for established companies to nurture an unquoted company; Enterprise Capital Funds, whose raison d'etre is to address the 'equity gap’ that exists when viable business propositions are unable to attract investment; and borrowing from family and friends. 

You will have noticed that the above options do not include a bank business loan.  I’m no apologist for the behaviour of the banks and their contribution to our economic woes, however we do need to understand their role in financing business. We would not expect to get a mortgage without having a regular income, so why would we expect banks to lend to a new venture with no cash flow? The role of the banks is to provide working capital to established businesses, not to provide risk capital. It is for shareholders and investors to finance the higher risks associated with new ventures. Regrettably this does leave the economy with an 'equity gap’, and Lancashire’s initiative is an example of some of the innovative ways that are being developed to close this gap.

At a recent business breakfast I attended, the need to open up credit lines and investment funding for SMEs was put to Vince Cable again and again by entrepreneurs. He acknowledged the importance of this and it remains to be seen whether this Government is doing enough to close the gap.  It is therefore heartening that Lancashire Council has taken the initiative with its new scheme,the first by a County Council in the UK, and I hope others follow its lead.

If you know of an innovative business funding solution, I’d love to hear about it.

Ross Nichols
Business Mentor and Coach
www.businessmentoringservices.co.uk
@Biz Mentoring Ltd

November 12th 2012

WHAT CAN WE LEARN FROM LONDON 2012? I’ve read several articles on lessons to be learned from London 2012, here’s my take on it.

A Big Project Needs an Inspiring Vision.  Sebastian Coe’s vision for London 2012 was short, crisp and breathtakingly ambitious, ‘Best Games ever’.  Few would disagree that this has been achieved, and in a very British way, with humour, tolerance and patience.  The power of this vision to galvanise people into action and inspire excellence has been truly remarkable.  Are you inspired by your vision for your business or career?

There is No Substitute for Planning and Preparation.  The success of Team GB cyclists is based on ‘the aggregation of marginal gains’.  Before the first cycling final in the 2008 Beijing Olympics, the Team GB cycling coaches asked each other if there was anything else they could have done to improve the probability of success – they all answered ‘no’ and the rest is history.  Do you plan and prepare for success or merely ‘hit and hope’?

Goal Setting is a Powerful Aid to Success.  When the 2012 Games were awarded to London, an 11 year old boy drew a picture of a high diving board with the Olympic Rings beside it.  No wonder that Tom Daley, now 18 years old, was so delighted with his bronze medal in the Diving Pool.  He had set his goal very clearrly and taken responsibility for making it happen.  Properly done, goal setting is an amazingly effective tool to achieve what you really want in all areas of your life, business and career.  What are your goals and do you take responsibility for them?

Positive Thinking Boosts Performance.  It’s easy for doubts to enter the minds of even the best athletes.  After his defeat by Jamaican teammate Yohan Blake earlier this year, even Usain Bolt had doubts over his ability and the fact that he doesn’t always lead a race from the early stages.  His coach told him to stop worrying about the start of a race because, ‘the best part of your race is the end.’  It worked and Bolt was playing to the cameras right up until he took his marks for the 100m final – no sign of any negativity there.   Are you thinking negatively about what you can’t do, or positively about what you can?

Losing is the Gateway to Winning.  The downside of winning as that someone has to lose and guess what all those winners have done many times before they won?  That’s right, they lost.  Losing is a key part of learning and while it’s easy to be downbeat after a loss, it’s only feedback, not failure.  And, with the right attitude, losing can be used as motivation to improve and become a winner.  Victoria Pendleton was disqualified from a gold medal winning position.  She put it behind her and went on to win gold and silver medals.  What was your last setback and are you using it for motivation?

Passion is the Magic Ingredient of Winners.  Lord Coe told us to prepare to be ‘amazed…inspired… [and] moved’ by the performance of the paralympians – he was right.  Angeles Hernandez won gold in the F57/58 Shot Put with a new world record and said, ‘You can do anything you want if you work hard.  If you do it with love, passion and discipline and support, then it is possible.’  The achievements of the paralympians have shown us that anything is possible – will we ever be able to think of disability in the same way again?  Are you following your passions?

Giving is Cool and Makes You Happy.  The loudest cheers at both the Olympic and Paralympic closing ceremonies were for the Games Makers, the volunteers who gave their time and guided, greeted and entertained millions of visitors to all those events.  They did it to give, not to take, and in the process found fun, friends and huge satisfaction, as well as earning our respect and admiration.  Giving is one of the 10 keys to happiness and it’s a great British tradition, long before the phrase, ‘Big Society’ was coined.  Are you a giver or a taker, and which mindset makes you more successful and happy?

These are my lessons from London 2012 – I’d love to hear yours.  

Ross Nichols

Business Mentor and Coach

This article first appeared on LinkedIn Group, ‘Career Transition UK South’.

September 16th 2012

6 STEPS TO FINDING A SUCCESSFUL NEW CAREER

Ever wondered why some people take a radically new direction in their careers?  Some people are just plain lucky – they get made redundant one day, and stumble into a new career the next finding complete fulfilment in it.  But for most of us, it isn’t like that.  We had a career, a way of life and an identity which was taken away either by circumstances beyond our control, or because we needed to change direction without necessarily knowing why, and without necessarily knowing what that new direction was.  If you find yourself in this situation, here are my 6 steps to finding that new direction and making a success of it. 

First, ask yourself, ‘who am I?’  You used to be whatever you were in your last job or career.  When you remove that identity, what’s left – who are you?  This can be an uncomfortable question if you don’t have a clear sense of yourself.  What are your core values and beliefs?  What is your guiding spirit?  I left the Army after 26 years service at the end of 2008 because something was missing – the fire had gone out and I needed to rediscover a purpose for my life to replace the vocation I’d had since an adult first asked me, ‘what do you want to be when you grow up?’.  There was only ever one answer, ‘a soldier’, and when that was no longer the answer, I shed that identity and had no idea who I was.  So I took some time out and did a lot of reflection, which became the start of a journey of self discovery that continues.  I’m comfortable with my values and beliefs, I accept myself as I am, and I’m no longer trying to be anyone else.

Then ask yourself, ‘Where am I going?’  In your former job or career, you had a sense of direction, maybe even a vocation.  If you still have that, great!  If you don’t have a strong sense of purpose for your life, how do you know what you should be doing?  When I work with clients, and I meet someone who is genuinely passionate about what they do, I know that they have a strong probability of success because people with purpose and passion can move mountains.  I’ve seen people with negligible business and management skills progress rapidly to become highly effective CEOs of growing organisations because they were highly motivated and had a sense of mission.  If you haven’t yet discovered your purpose, try out a few new things, volunteer, take a punt at a new activity, and listen inside yourself for feedback.  I undertook a ‘life purpose’ session as part of a guided meditation weekend and it revealed to me that helping others to succeed through mentoring is my life’s purpose.  I had not long started voluntary business mentoring and was finding it very satisfying, but I didn’t have the confidence to go for it until I discovered that helping others to succeed was my purpose in life.

The next question to ask yourself is, ‘How am I going to get there?’  When you know your life’s purpose, you are in a strong position to set yourself goals.  We all know about SMART targets, but do we really understand SMART goal setting?  M is for measurable and meaningful;  A is for achievable and acting as if it’s a foregone conclusion; R is for realistic and responsible, because you need to take 100% responsibility for making it happen; and T is for timed and towards because it needs to be a positive goal to progress towards, not a negative outcome to be avoided.  And we need to set goals in all areas of our life, not simply our career or we may neglect something that will trip us up when our life gets out of balance.  Setting SMART goals is a powerful technique that harnesses the power of our unconscious mind to work 24/7 on our behalf, spotting opportunities and drawing us inevitably and largely subconsciously towards our goals.  I reviewed my goals earlier this year and realised I had neglected to set a goal for my family.  I put that right and I like to think that had something to do with my eldest son gaining an advanced engineering apprenticeship a few weeks ago.  But avoid milestones and intermediate targets – if they are important, then they are probably your goals.  I set myself a goal for my business of earning £x by the end of the year.  In best linear planning fashion, I worked out that in order to achieve that, I should be earning a proportion of that amount each month from the middle of the year.  But here’s the thing: truly SMART goals have an amazing ability to manifest themselves in the most unexpected ways and the whole goal might be achieved in December, with nothing earned until then.  Setting intermediate targets can therefore blow your goal, so be clear about what your real goal is – and be careful what you wish for because you’ll probably get it!

Take action, lots of action and more action.  Keep on taking action, listening inside yourself for feedback and eventually you will find what you are looking for.  In my case, finding clients was taking longer than expected, so I got really focussed on what action was going to generate leads and pursued those actions, and anything else that might contribute towards them, and it started paying off sooner than I expected.

When trying something new, go into it with a mindset that you are there to give, not to take.  Eventually this will pay off - this seems to be an unwritten ‘law of life’.  I started voluntary business mentoring to be of service to others while I figured out what to do with the rest of my life, and I ended up with a new career.  And ‘pay it forward’ – when someone asks you for a helping hand on their journey, help them out and ask in return only that they help someone else out when that moment comes.  One day that will come back full circle to you.

Be open to everything and trust that your goals will be achieved.  This requires a leap of faith – make that leap and you will be amazed at how liberating it is.  You now have licence to try anything and everything.  I thought of myself simply as a business mentor, but by being open to how my career goals might become manifest and ‘following the breadcrumbs’, I find myself doing work I had no idea I could do, such as coaching directors through career transition, working with colleges to develop enterprise education, and helping innovative engineering companies take new products to market. 

These 6 steps helped me through my career transition and I hope they help you through yours - good luck with your journey.  If you find this helpful, interesting or maybe even provocative, I’d welcome your feedback and I’d like to hear your story.

Warmest regards

Ross Nichols
Business Mentor and Coach
www.businessmentoringservices.co.uk
@Biz Mentoring Ltd

July 6th 2012

What's your 'Milkshake Moment'?

What’s your ‘milkshake moment’?  Consider this incident: a chap in a hotel asks room service for a strawberry milkshake.  'Sorry sir, we don’t do strawberry milkshakes.’  So he asks them if they have milk (they do), and ice cream (they have that too) and even fresh strawberries (yep).  So he asks if they would bring them to his room with a bowl and a kitchen blender.  He whisks everything together and pours it into a glass and says to the room service guy, 'I thought you didn’t do strawberry milkshakes?’.  

I’m indebted to Mike Gaston, Principal of Totton College for this story, and for the insight it gives into his attitude to providing education - very refreshing! 

July 5th 2012

Dorset Growth Event - Sowing Seeds

 I was honoured to be an ambassador for the EU-funded SOWING SEEDS mentoring scheme at the Dorset Growth Event in Bournemouth on 22 June 2012

, hosted by the MEP for SW England (Julie Girling). The scheme is administered by Dormen and provides FREE business mentoring to businesses in E and NE Dorset and SW Wilts that are producing, distributing or marketing items produced from raw ingredients sourced in the area, or delivering a distinctly rural service. If you would like to know more, visit www.dormen.org.uk or contact Dormen on 01202 607530.

June 26th 2012

Accelerator Schemes - mentoring for a stake in your business

I was intrigued by the development in mentoring reported in today’s Sunday Times Business section.  A recent trend is for mentoring to be offered in exchange for a stake in your business, typically up to 10%, plus an injection of capital.  These schemes are sometimes called ‘boot camps’ for entrepreneurs and are becoming an established feature of the start up funding landscape.  There are advantages for both parties: the start up business gains contacts as well as mentoring and capital, and the investors gain access to companies that have been filtered by the 'boot camp’ as having the potential for a good return on investment - everybody wins.  Boot camp participants can expect a rough ride as their plans are scrutinised (or 'torn apart’) by business experts in law, finance, marketing etc as well as by the investors.  Angel investors are more likely to be interested in a start up with which they have an emotional connection, while venture capitalists may typically offer a higher cash injection although they are less likely to invest in very early stage businesses.

Apparently the original boot camp was in Silicon valley and the idea has now spread to UK with several schemes launching in UK in the past 2 years.  This sounds like a great idea to me, bringing together start ups, funding, contacts and intensive mentoring that should save years of wasted effort and money, and get rapid backing for those businesses with the potential to succeed.  

June 17th 2012

Another Government Mentoring Scheme

Another month, another Government business mentoring scheme - this time associated with the £82M Start Up Loans Fund for young entrepreneurs aged 18-24. Loans will be provided up to £2,500, repayable over 5 years at 3% above inflation.  Pleasingly, the scheme also includes mentoring. The hope is that this will encourage more young people to have a go at starting their own businesses.  I heard Lord Young on the ‘You and Yours’ Radio 4 programme (28 May) saying that if the enterprise culture in UK matched that of the USA, the small and micro business sector would create another 900,000 jobs, so fair play to the Government for investing in this scheme.  As Lord Young said, the mentoring aspect of the scheme is more important than the funding.  There is another Government scheme to make £100M available via alternative lending, such as peer-to-peer lending.

Will these schemes make a difference?  It’s a moot point: £2,500 is a very small amount of capital to start any business, and the chances are that it will prompt those who have already decided to do it, rather than encouraging others to take the risk, however we need to give it a chance.  Any scheme which promotes business start up with funding and appropriate mentoring is welcomed as the economy needs all the help it can get.  I do wonder where the mentors are coming from - I answered a call in the Salisbury Journal for mentors to help with the New Enterprise Allowance Scheme for Jobseekers (same formula - micro loan + mentoring).  After some correspondence, the scheme coordinator failed to get back to me.  Whatever the reason, I wish all these schemes well, and I stand ready to assist if required.

June 3rd 2012

Mentoring - An Idea Whose Time Has Come

You can hardly open the business pages of a newspaper these days without reading about the launch of another mentoring scheme.  Only the other weekend I found an article about the College Enterprise Scheme designed to encourage undergraduates to consider starting their own business as a career option when they complete their studies, rather than starting the more traditional journey up the corporate ladder.  The Government has put £0.5M into the scheme.  A student initiative from an Imperial College (London) undergraduate is itself a start-up.  The appropriately named business, Student Upstarts, is an enterprise boot camp, which picks promising ventures and puts them through an intensive 13-week mentoring programme.  Another scheme launched last year by the Prime Minister, Enterprise First is a two-year programme to encourage and support graduates to start their own businesses by linking them with mentors and funding.  Then there’s the New Enterprise Allowance Scheme also launched last year for those on Jobseekers Allowance.  This scheme provides a modest weekly payment together with free mentoring and access to a small loan to provide start-up funding.

So what’s going on here?  The idea of a mentor is not new.  Look in a dictionary, and it defines a mentor as ‘n.  a wise counsellor.  [Gr.  The tutor by whom Telemachus was guided].’  Not being schooled in Greek mythology, I had to look up Telemachus in Wikipedia and found that he was the son of Penelope and Odysseus, who needed a tutor because his father was so often away fighting wars – that’s ancient Greeks for you.  Even the X-factor TV show panelists are called, and used as, mentors, whereas 10 years ago they would have been ‘judges’.  And almost anyone who’s worked in a large organisation over the last decade will be familiar with in-house mentoring programmes.  Even the British Bankers Association has an initiative for high street banks to train mentors as part of project MERLIN, the banking industry’s support for business.  This is by the way the least we should expect given the amount of public money spent on bank bailouts over the last few years.   I think, quite simply, mentoring is an idea whose time has come.  For business, there are several advantages of using a business mentor.  It’s generally a low cost option, which is a good place to start in a recession.  There’s also a transfer of knowledge and skills to the client because it’s the client who has to take ownership of the analysis, choose the best course of action from the options identified in conjunction with the mentor, then implement their decision.  This avoids creating dependency on the mentor and helps the client to stand on their own feet more quickly.  For a mentor, there is no finer outcome than talking him or herself out of a job.  It should therefore be no surprise that Government sees the provision of business mentors as a key catalyst in nurturing the growth of start-ups and small business, which are so important to grow the new jobs needed to replace shrinking public sector employment, and to get the economy moving again.  In addition to Government backed schemes, there are some excellent not for profit business mentoring schemes around, funded by partnerships of local authorities and business organisations.  And then there’s the B2B sector, which has a huge variety of mentors, coaches, advisers, consultants and so on.  The annual small business survey shows that using external business support does provide a worthwhile positive benefit to business so it’s  great news that the availability of business mentoring continues to grow.  If you’re reading that and you run a business, a social enterprise or a charity and you don’t have a business mentor, you are missing out on what can be a real game changer.  So what are you waiting for?  For links to mentoring schemes and organisations, visit the knowledge centre on my website, www.businessmentoringservices.co.uk.  

April 20th 2012

Wiltshire Growth Conference-Sowing Seeds

 I was honoured to be an ambassador for the EU-funded SOWING SEEDS mentoring scheme at the Witlshire Growth Conference on 23 March, hosted by the MEP for SW England (Julie Girling). The scheme is administered by Dormen and provides FREE business mentoring to businesses in E and NE Dorset and SW Wilts that are producing, distributing or marketing items produced from raw ingredients sourced in the area, or delivering a distinctly rural service. If you would like to know more, visit www.dormen.org.uk or contact Dormen on 01202 607530.

March 25th 2012

WHAT IS YOUR FAVORITE INANIMATE OBJECT?

My bicycle, closely followed by my multipurpose Stanley screwdriver

March 16th 2012