The Unregulated Small Business Advisor – What to Expect

In twenty years as a business coach, I’ve witnessed the coaching industry evolve and blossom with new technology and a changing marketplace. The rise in digital platforms has allowed for rapid growth in business, particularly in the ecommerce space, with the internet bringing the entire world to our fingertips. It’s this growth in technology that has supported the business dreams of everyday people with the ability to scale at great pace, both locally and globally, now more achievable than ever. It’s certainly an exciting time to be part of the small business ecosystem! Every day we meet new people with great ideas, each more innovative than the next, and it undoubtedly keeps my team and I energised to help our clients succeed in any way we can.

With limitless opportunity for expansion for business owners and start ups today, there’s more people offering their services to help businesses grow to their greatest potential. In recent years, the rise of incubators and similar programs that provide mentors/advisors and coaches as part of your engagement with them can be a tremendous opportunity – when it’s well regulated. Having seen the best and the worst of these opportunities in the businesses we’ve coached, I wanted to share what’s acceptable when working with a coach, and the professional ethics that my team and I adhere to when working with small business owners and start ups.

Managing Ethical Boundaries

When you’re professionally trained as a business coach you understand the ethical requirements and potential conflicts that could arise in a coach-client relationship. It’s like any other professional relationship and as coaches we should always be conscious of the position of power we are in when giving expert advice to a client.

What I’ve seen more and more with the growth of the start up community, accelerators and incubators, is the increase of people willing to volunteer as mentors. Most Incubators have their own Code of Conduct and processes in place but the influx of these types of institutions has created some ethical issues in the business coaching and mentoring space. For our clients, I always recommend they look closely at the existing Code of Conduct and expectations for client-mentor relationships before getting too involved and certainly before you engage in any type of monetary exchange or business agreement.

In an AFR article,by Steve Baxter, he raises the issue of start up advisors taking equity in your business or fund raising and later being involved in decisions or funding rounds when this would not typically be an acceptable practice. Equally, agreeing to or asking to take equity in someone else’s business could be a red flag.

It’s worth noting that there are some Incubators who do take equity upfront as part of their model and they’re doing great work. These programs are particularly successful when the founders and investors are aligned and if your mentors are working to a framework with proven results.

Regulating an unregulated system

My ethics as a coach and the expectation I have for my team of coaches, is that they’ll never misuse their coach-client authority to profit through further business outside of coaching, or to enter into any partnerships with existing or former clients.

In my own team, I look for people with similar values to mine and I ensure we are all professionally trained in managing our position of power when dealing with clients. We monitor both the client relationships and our service delivery through regular supervised coaching appointments, one-to-one meetings, ongoing training on managing boundaries or conflicts of interest, and frequent catchups with the extended coaching and operations team to create a safe space to share our experiences with each other. We also review our company DNA on a regular basis and live by the value “What’s Best for Client”. We implement this value in all our coaching sessions first and foremost and it’s always at the front of our minds when dealing with clients. In my opinion as a coach and as a leader, it would be very rare for a client to keep the same coach forever, or for a client to engage in external business agreements with their coach who is in a position of authority with them. In my opinion this would only happen under the most extraordinary of circumstances and even then, it’s extremely unlikely.

In writing this article, my primary goal is to make people aware of the different motives someone might have when volunteering their time as a mentor. I want to stress that even in my own experience as a small business owner, I’ve recognised that not every mentor has an entirely pure agenda in mind.

What I say to my team and what I truly believe is that my role as a coach is to teach you all I know so that my role is redundant. The role of a coach, mentor or business advisor is not to make you reliant on them – their role is to lift you up, give you the tools you need to succeed and to send you off on your way to further success.

Steve Baxter (2017). In Australian Financial Review. Beware the adviser offering fundraising help to your startup.

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