1. AT THE VERY
BEGINNING
BUSINESS MENTORING
NEW ZEALAND HAS
A NEW PROGRAMME
TARGETING START-
UPS, AND IT IS
ALREADY PROVING
TO BE A MAJORHIT.
-By Peter Boyes. ~
Business Mentoring New
Zealand (BMNZ) is a long
established volunteer-based
programme_ Since 1991 around 70,000 small
to medium sized businesses have taken
advantage of BMNZ's unique network of
business expertise in New Zealand, and more
than 1,000 businesses across 10 Pacific Islands have been
helped since 2010.
The not for profit organisation has about 2,000
experienced volunteer business mentors and business
trainers on its books, many with invaluable industry
specific expertise_
But until recently, the criteria for business mentoring
required an applicant to be currently trading, which ruled
out start-ups from the process_ That has now changed with
the introduction of a new programme, designed for people
who have a business idea and sometimes not a lot more.
As BNZ's chief executive, Ray Schofield explains: Where
do you go if you're a budding entrepreneur? What do you
do if you've got a great business idea, want to know how
to turn it into a fully-fledged business, and don't know
where to start? What do you do if you need a business
plan for funding, and confidential one-to-one feedback?"
The BMNZ Start-up Business Mentoring Programme
has been designed for people who want to explore their
i business idea in a confidential environment; who want to
know where to start and who to talk to. It aims to help
them put the right foundations in place for their business
through planning, preparing the necessary information
and documents to present to potential investors to make
I the idea float, and enable people to understand their
legal obligations_
"The programme will help identify easily avoidable
44 NZB July 2015 nZbusint·ss.co.nz

2. mistakes and provide much needed motivation, confidence
and focus at a crucial point in setting up a business,"
says Schofield_ "It provides six months of accelerated
mentoring for a $300+GST registration fee, which helps
with the cost of administration_ Up to March, just four
months after we launched, we've helped over 100 new
businesses find their way_"
Case study
Nick Sterling has been a business mentor for six years and
was involved with the Pacific mentoring programme before
he embraced the Start-up initiative.
"I have done quite a bit of research on New Zealand
and international businesses looking at the reasons for
start-up failures," says Sterling_ "According to the research
studies conducted by economic development agencies
and business schools across most industry sectors, both
here and internationally, the Start-up failure rate is far too
high, well-over 50 percent on average, and as high as 80
percent in some that do not make it past the two to three
year period.
"Most entrepreneurs start their own businesses to
provide for their families, to build security for their
retirement, secure the future of their children, have a
better lifestyle and make a greater contribution to their
world_ They have the deep inner passion and conviction to
believe that they can do it They believe in it so strongly
that they either spend their redundancy money, their
savings, take loans from friends and family, re-mortgage
their homes, get seed funding, or a mixture of these
options, to fund that dream.
"But I have found that many entrepreneurs, although
very passionate and professional, have serious capability
gaps to bridge in order to even undertake the business
planning process properly.
"Planning for and starting a business is said to be
arguably harder than doing an MBA. The amount of time
and effort required, in addition to the other existing
commitments like work~ family, leisure and other time
constraints, cannot be realistically underestimated."
BMNZ's research has identified a number of other
common factors involved in Start-Up failure. These include:
• Knowledge, experience and general capability gaps in
business and management
• Planning, launching, managing, improving and growing a
business, year-on-year, every year.
• The need to source specialised skills and resources for
specific functions within the business_
• Not enough capital to support the business set-up,
launch and get to break-even point
• Too much pride. Realise that it is better to fail early, at
minimal cost and impact then start again wiser, than to
persist with a losing battle and fall harder down the line_
• Going into business for the wrong reasons.
• Poor advice from friends and family.
• Design too many concepts without proper commercial
and market feasibility.
• Lack of experience to negotiate with and manage
suppliers.
• No knowledge of pricing and/or emotional pricing.
Nick met his first start-up client fortnightly at a 24-hour
McDonald's from 6-9pm, covering business training and
planning. He has found that most start-ups hit a big
'realisation brick wall' within a couple of weeks after the
initial planning meeting_ It dawns on them how much they
do not know; how much they need to learn and apply;
how much time and effort they actually need to invest in
the business planning process; how much professional
development they are required to do to get themselves to
the skills standard needed; how much money they need
to set-up and launch; and how uncertain success still is
despite all this.
"It is useful for them to work on the 'Why I want to
start my own business' element at this point, where the
passion they feel for their business concept aligns with
the reality of what is required to properly validate and
make the business concept successful (or not).
"Getting the business owner to be commercially aware
can prove to be a lengthy exercise and a tough mind-set
shift I support the client with some business training
and profeSSional development using online and reference
material which helps achieve this, as well as building the
capability required to conduct the planning process and
eventually manage a business in real life."
Nick explains there is a range of benefits from the
business planning process_ The business plan can assist in
exploring seed funding as it provides a solid basis for the
business concept to be comprehensively analysed_
Even if the initial concept is found to be commercially
unviable, this is discovered early, at minimal cost,
effort and risk. As a result of the market and financial
feasibility studies, the original business concept may
well alter to a more commercially viable one that has a
better chance of success.
Ray Schofield is pleased with the early results of the
programme. "Few other organisations, even in the private
sector, come close to what BMNZ can offer in terms of
support like this. For an entrepreneur looking at starting a_
new business, this should provide a degree of confidence
and trust to the level of business and management
support that they will receive through this programme.
"The actual professional services costs to the business
owner if the same support services were to be sourced
privately would be in the order of tens of thousands
of dollars over the lifetime of the business mentoring
support offered by BMNZ."
» Peter Boyes is a PR and marketing
communications specialist and
a volunteer mentor with BMNZ.
Email peter@boyespr.co.nz
NZB July 2015 IIzbusinl'ss.CO.IIZ 45