MICROFINANCE: VALUE OF MENTORING

John C Cranfield, Chief Executive, First Step Microfinance

How does mentoring cultivate start-up businesses? John Cranfield explains.

As part of its microfinancing service, First Step provides mentoring to nurture businesses forward during the critical early years. For each of its loans, the organisation locates a suitable mentor and currently has about 120 mentors working with businesses.

However, First Step's mentoring service is extremely unique as each mentor works in an unpaid capacity and is generally a professional located in the same region as the start up business itself. Says Cranfield, "we source mentors local to the business through our own connections and ask them would they be interested in mentoring on a voluntary basis." The service is not as intensive as other mentoring programmes as First Step mentors are more fluid to an individual's needs. The mentor helps ensure that a business properly utilises its loan while also providing advice and direction on a start up's banking, accounting and marketing areas and getting these systems in place.

SEEKING THE EXPERTS

So how does the organisation source suitable mentors? When a business gets a loan, First Step makes the connection with a mentor by zoning in on the locality of the business to determine if they have a mentor there. If First Step has not worked with a mentor in that region, they then solicit professional firms to avail of a voluntary mentor. "Ninety-nine percent of the time they would say yes." Sometimes business starters would question the intervention of a mentor but it is part of the First Step facility where the emphasis is on trust and on developing an open relationship.

PERSONAL RELATIONSHIPS

Keen to stress that a First Step mentor does not have any role to play with loan repayments, Cranfield affirms, "from a client's viewpoint, we don't want them to feel that they've got somebody looking over their shoulder. It's a purely supportive, friendly, non aggressive and advisory role." Often the relationship between a client and a mentor develops into a very personal one.

And while a mentor is encouraged to submit quarterly reports on a business, Cranfield explains that pressure is not placed on the mentor. "It is a flexible, non rigid, non bureaucratic liaison." In the past AIB has supported First Step's mentor programme and, where necessary, First Step works with Enterprise Ireland's mentor panel.

PART OF THE PROCESS

Most of a First Step mentor's input occurs during the initial twelve months of a growing business but the service is available in the second and third year should a business require it. Asserting how it's a very useful way of obtaining advice and guidance, Cranfield says, "we regard the mentoring programme as being an important part of the First Step mix and it has been very worthwhile. People are very willing to give up their time to help people start."

THRIVING IN BUSINESS

John Hurley, MD and owner, Aquapure In business for the past ten years, Waterford based company, The Watershop, has recently changed its branding to Aquapure to facilitate electronic access to its range of services and to expand its operations nationwide. Employing six people, Aquapure provides unique plumbed to mains filtration water coolers for both domestic and business users. Owner and MD John Hurley talks about his business and his positive mentoring experiences. Why did you start? To realise a lifetime ambition of owning my own business. How did you start? Microfinance from First Step, an employment grant from Waterford City Enterprise Board, an overdraft from Bank of Ireland and through my own investment. What are your hopes and aspirations for growing? My vision for the future of our business is based on realistic growth. We are rebranding to Aquapure to reflect more accurately what we do. Our goal is to double our turnover over the next five years by doubling our customer base, by introducing innovative technology allied with target marketing. What does success mean to you? Relative freedom. What barriers to growing have you encountered? Mainly demands for capital to fund growth. What advice do you have for other start-ups? Find a good bank and a good mentor; money on its own is not enough. First Step introduced me to an outstanding mentor, Peter Hudson. The keys to my successful mentoring by Peter have been objectivity, professional brutal honesty and loyalty.