Gain Experience

We learn a lot through experience. With the right mentors, you can gain experience from others who have already been there and done that and can provide insights from their own successes and failures. These insights are valuable assets that can save you time and money in developing your business.

Provide Perspective

When you are in your business every day, it can be hard to step out and think strategically. Having a mentor can give you a different perspective. Because your mentor is not caught up in the day to day details of the business, they can provide more objective feedback and guidance that is still grounded in experience.

Avoid Pitfalls

Because you’ve put a lot of work into the business, it can become easy to get very attached to your business plans. And, you might not recognize biases and blind spots that pose risks to your business development. Having mentors who constructively challenge your assumptions and identify weaknesses can help you avoid common pitfalls and minimize your risk.

Build Resilience

Starting and running a business is an emotional roller coaster. It’s encouraging to know you have a support network with mentors who believe in you and your business and are committed to helping you figure things out. And, calling on your mentors for guidance can re-inspire and re-energize your motivation to build your business.

Expand Your Network

A mentor can connect you with resources to grow your business. A good mentor should keep you in mind and think about introducing you to people who can support your business development, such as potential customers, partners, or investors. That’s not to say that a mentor is going to automatically open up their entire network — you still need to do the work to demonstrate you are ready to make effective use of those connections.

The post The Importance of Having a Mentor first appeared on Five23.

For the majority of service-based startups, this revenue comes from a subscription based model. When customers are paying for a service on a monthly basis, the revenue received by the company can be classified as Monthly Recurring Revenue (MRR).

MRR is used in a myriad of ways for analysis, but it is generally used to give an investor insight into the overall health of the startup. This level of health is determined by combining a few factors MRR accurate predicts. Such as:

Revenue Momentum
Customer Lifetime Value
User Growth
Churn Rate
Average Selling Price Trends

When each one of these items is calculated against the MRR of the company, one can have a clear view of the company and its projected revenue growth over time. This insight of the company proves invaluable for many investors, and may be the difference in receiving an investment or not.

To better secure the MRR of a company, the startup must take actions to create reasonable insurance the revenue will occur at the set monthly interval. This can be done in a few ways, but generally, is handled by automated payments and/or a binding legal contract. Having a contract ensures the payment will be made until a specific date or an indefinite amount of time. While there is always a certain percent of churn (users canceling their subscription to the service), the overwhelming majority of users will not break their contract.

When weighed in the balance, the amount of MRR the startup receives is invaluable to their success as a subscription based company. While this metric doesn’t fall into typical accounting practices, it is important to know this metric when dealing with investors and raising venture capital.

The post The Importance of MRR (Monthly Recurring Revenue) first appeared on Five23.