Studies indicate that 95% of startups fail before their second birthday. The reasons for their failure range from lack of enough capital, mediocre product that doesn’t fit the market needs, and poor talent hiring.
If you don’t want your business to be among these statistics, you must get a start-up advisor. This article will discuss everything about this professional and why you need one.
Who is a Startup Advisor?
A startup advisor is a professional who helps new businesses navigate areas lacking competencies. The consultant also helps businesses in other areas, such as networking and getting financiers.
He can be a growth advisor with much sales marketing or product growth expertise. He can also be a startup consultant with deep technical expertise in your business niche’s challenges.
How a Startup Advisor Can Help With the Growth of Your Business
A startup advisor can be the key strategist in a business in areas like:
Project and Business Planning
Once he has studied the business idea, the consultant will help to plan the business processes. He will plan on the budget and time needed to complete the project.
Making Hiring Decisions
It’s not easy for startups to make hiring decisions. However, a consultant can help find skilled professionals. They will create a list of requirements, recommend the channels for the search, and even conduct interviews. The advisor will also conduct interviews and assess the professional qualities and skills.
One of the key steps in the early stages of a business is process auditing. When working with an experienced process auditor, they will understand whether the business has a future, the areas to adjust, and more. Other areas where the professional can help include:
- Whether the market needs your product
- The funds required for the success of the business
- Investment areas where funds are required
- Whether the business has enough competencies
- How well the business model is planned
Product design is another startup advisor’s responsibility. The professional will help determine the design team members and create the right environment for product design. They will also evaluate the design and its wireframes. The advisor may help perform consumer research, focusing on solving a problem.
After a product has been released, a business advisor helps with its scaling. During this step, they receive the funds required for future development and eliminate processes that do not work. They automate processes to ensure they are more effective. They also develop a marketing strategy and solve any design or technical issues.
One of the biggest challenges that start-ups have to contend with is fundraising. Businesses should develop a great investor pitch to tell an interesting story. One of the roles of a consultant is to develop an investor deck. This is important as experienced consultants know what investors need. Therefore, They will create a pitch with the most important and relevant details.
How to Choose a Good Startup Advisor
To improve your chances of success, you will need to select the right startup advisor. You can do that by evaluating your skills and limitations. Some of the factors to consider include:
Great Coaching Skills
Rather than just solving your problems, a good startup mentor will ask key questions to help you brainstorm on key issues rather than just solve your problems.
Deep Knowledge of the Industry
When you pick a professional with deep industry knowledge, this will help with strategic planning. On top of that, engagement in your business will help you improve your professional network and avoid mistakes.
Passion for Company Business
Is the consultant motivated by money, or do they have a special interest in your business? The professional should be honest and reliable and with great leadership skills.
You should ensure that the small business consultant has great communication skills if they will send information effectively.
You must ensure the startup consultant receives good feedback from his previous clients.
How Much Should You Pay a Startup Advisor?
If you are in the early stages of your business, you don’t have to hire a startup consultant full-time. Instead, you can compensate them a small percentage of equity. But how much equity should you give a startup advisor? While this will depend on the experience they bring to your business, the amount ranges from 2% to 6%.
How to Become a Startup Advisor
If you are planning to become a startup advisor, here are the steps you need to follow:
Determine Your Skills
Remember that when offering startup advisory services, you will use your skills to help new businesses overcome challenges and grow. Therefore, you must consider what value you are adding to these businesses. Some of the skills that you need to succeed include:
- Ability to understand financial statements
- Digital Marketing
- Excellent communication
- Problem-solving abilities
- Strong networks of professionals and more.
If you lack in one or more of these areas, start building your knowledge base. On top of that, you will need to stay up to date with the latest startup news and trends.
Find a Startup with a Similar Vision
To become a successful business advisor for a startup, you must also market your skills to startups with a similar vision. The founder of the business should also need your services. Find businesses facing challenges in the areas you are skilled at and discuss your services with them.
Once you find a startup that needs your services, you must discuss the compensation. While you may be tempted to charge according to the market rates, starting with a lower rate would be advisable even as you build your portfolio.
Once you agree on compensation, you should commit to at least 2 years. This is unless the founder requires you, like 6 months, for less time. This will also help you gain experience in the role of advisor in a company.
A startup advisor’s role is an important position in a new business. It may mean the difference between the success and failure of the business. Whether searching for one or planning to become one, you can use this guide to get started.