Recently I was at a meeting where the question ‘What do most business owners ask for help about?’ was mooted. The obvious issues of marketing and finance were mentioned but the debate took an interesting turn when one of the attendees at the meeting said, “Last week I was asked three times, by firms in three very different sectors, about how to find a business angel”.
That seemed an awfully specific question for three different people to ask but, as it turns out, the ‘word on the small business street’ is that you should try and find a business angel if you need money for your business. Why? Apparently, at this stage of the economic cycle, with the country moving out of a long recession, business owners’ perceptions are that the banks aren’t lending, venture capitalists will take the lion’s share of their business, but a philanthropic business angel will invest time, money and personal support – so that’s a much better avenue to pursue.
Peering into an abyss
It’s a well-known fact that most business owners go to their peers first for advice or tips about running their business, so peer-to-peer business networks seem to be drawing some interesting conclusions amongst themselves.
These three firms had very different requirements: one wanted to sell their business; one needed money for capital investment and another wanted to recruit more staff.
The peer network’s conclusion that all these businesses needed the services of a business angel is interesting to say the least. They had concluded that the businesses needed money, and that a business angel is the safest way to that money. So that’s okay then.
Education, education, education
The adviser who mentioned this trend was quick to suggest that there is currently a big gap in the small business community, and that is one of education. Business owners need better education about key business issues so that they are in a better position to run their business as effectively as possible but also, perhaps more importantly, so they can pass on the right knowledge to their peers.
I personally couldn’t agree more, and I think a lot more needs to be done about making sure that business ownership is seen as a profession, for which business owners need to undertake continual professional development.
Running a business is exciting and exhilarating if you get it right and your business is healthy, but if it’s suffering in any way you need to understand fully what the symptoms are, and what the potential cause might be.
Asking for advice from a friend who has recently experienced a similar issue in their business is one thing, but how do you know that they understand your situation fully and if their solution is appropriate?
After all, you wouldn’t want your doctor making critical decisions about your health care based on the ‘word on the street’, would you?