Digital mentoring for small businesses

Having someone who’s at least a step or two ahead of someone in a journey can be very helpful because you can relate to the challenges. Often entrepreneurship can be lonely and having someone who’s lived that experience can be extremely helpful. –Harry Devonshire, Argidius Foundation

Mentoring is a 3000-year-old concept—Homer wrote about it in The Odyssey—that continues to yield benefits for the people who receive it. For small businesses, mentoring offers relationship-based guidance from experienced business owners to develop new skills, knowledge, and networks to support personal and professional growth.

Below, we outline the evidence of the impact of mentoring on small businesses, as well as some insights for designing and managing digital mentoring programs for small businesses.

Though there is more limited evidence on the effects of mentoring on small businesses than other capacity-building methods, it shows positive short-term outcomes. For example, research suggests that mentoring may be more effective for more advanced firms looking to expand or innovate. In Uganda, entrepreneurs who were matched with marketing mentors via Skype saw their monthly sales grow by more than 51% and monthly profits improve by more than 35%.

Research also suggests that mentors help solve specific problems and issues for small businesses, which is why the impact can dissipate over time. For instance, a study from Kenya showed that while mentoring had a substantial short-term effect on increased profits of female-owned microenterprises, the effect decreased as mentoring relationships dissolved. 

Further, organizations that support small businesses through digital mentoring programs are observing positive changes as small business owners and entrepreneurs report increases in income, improvements in skills, and greater access to resources. For example, Mentors International found their mentees had an average increase in income of 78% in 2022. MicroMentor found that 92% of mentored entrepreneurs reported an increase in confidence in one or more business-related skills, such as improving their financial literacy, improving their sales pitch, or improving their ability to design a marketing campaign. Further, 22% of mentored entrepreneurs reported increased access to business development resources (compared to 10% of non-mentored respondents), and 17% reported increased access to new grant or debt financing (compared to 7% of non-mentored entrepreneurs). Similarly, the vast majority of mentees in LMF Network’s newly launched digital mentoring program felt upskilled after each workshop and more confident in realizing their career goals. 

More recently, and in the wake of COVID-19, Enterprise Nation, a platform offering support and training for UK small businesses, found that 66% of small business survey respondents who had accessed mentoring agreed that it was crucial in helping their businesses to survive, and 76% agreed that mentoring was vital to their business’s growth.

Digital technology has widened the availability and increased the convenience of mentoring by removing geographical barriers and making it more accessible for all—mentors and mentees are no longer limited by their proximity or by in-person communication. Digital mentoring is especially useful for small business owners, who juggle many priorities with limited time and/or who seek knowledge that may not be readily available near them. However, not all digital mentoring is created equal and organizations will need to assess how best to leverage digital tools for participants.  

Below, we’ve identified some insights for designing and delivering digital mentoring programs for small businesses, and we’ll continue to update as we learn more. 

Determine how best to leverage digital tools

Organizations can leverage digital tools in many ways for designing and managing a mentoring program: use existing digital channels for mentee-mentor communication; implement a software-as-a-service solution (such as Insala or Qooper); or outsource the program to an end-to-end mentoring solution provider (such as MicroMentor or Mowgli Mentoring).

Additionally, digital mentoring programs can vary the levels of technology and touch (or human interaction) they employ based on how much support they expect participants will require. Argidius, a foundation that tackles poverty through enterprise development, has found that if participants are less familiar with digital technology or are new entrepreneurs, programs may need to be more high touch, with ample interaction to guide users through the mentoring journey, such as Mowgli Mentoring. Alternatively, entrepreneurs with a high level of self-awareness of their needs may be better served by low-touch mentoring programs, such as MicroMentor.

Establish participant criteria and dedicate enough time to online recruitment

Successful mentoring programs establish their ideal criteria for both mentors and mentees and set aside enough time for recruitment. Often programs underestimate the time required to recruit quality participants. Mentoring programs with a more narrow focus on the target segment and topic areas for mentoring have seen promising results. For example, Argidius has found that mentoring programs should not try to serve everyone, but be specific to drive targeted impact. Further, programs that clearly define the time requirements and the digital requirements (such as internet access, communication channels, and online activities necessary for participation)are more likely to enable participants to maximize the benefits of mentoring. For example, Insala has found that at least two hours a month of meeting time between mentors and mentees is needed for a successful relationship.

Digital has opened up several channels for recruiting mentors and mentees, especially by raising awareness of programs through online advertising or social media. For instance, MicroMentor has used paid advertising on Facebook to reach its target entrepreneurs, which has led to rapid growth in enrollments on its mentoring platform. Additionally, programs typically begin by recruiting an adequate number of mentors before other participants, because mentors are the crucial backbone of any program. For example, Insala has found that the success of any mentoring initiative is highly dependent on the quality of the mentors. What attributes make a great mentor? Small business respondents ranked life experiences, business knowledge, and relevant business sector experience in order of greatest importance.

Train participants about mentoring to ensure success

Research from Insala shows that the success of digital mentoring programs is highly correlated to the presence of training for mentors, participants, and program staff. They found that training is most successful during the onboarding period and on an ongoing basis, such as through virtual office hours or online technical support.

Digital mentoring programs have found that webinars are a great way to deliver training to program participants, especially because, according to Insala, people rarely get around to reading training handbooks. Similarly, MicroMentor offers an online training series that covers the basics of mentoring, in addition to building mentor soft skills and emotional intelligence.

Use digital tools to facilitate participant matching and interaction

Some digital mentoring programs rely on staff to match participants, while other programs may use data and technology—such as matching software, artificial intelligence (AI), or algorithms—to match their participants against specific criteria, such as values, interests, location, language, career level, among many others.

Insala has found that for mentoring programs with 50 participants or less, effective matching can be achieved with just a spreadsheet. For mentoring programs with more participants, matching software, algorithms, or AI are probably needed. MicroMentor’s algorithm scores a variety of criteria—including languages spoken, industry, and country, among others—to offer recommendations for members to connect with.

Digital tools can also encourage participants to interact and engage with each other. Some mentoring programs find videos, automated messaging, reminders, and email newsletters helpful. For example, researchers tested different engagement interventions on MicroMentor’s platform and found that showing entrepreneurs a video of a successful mentoring relationship made them more likely to initiate a conversation with a potential mentor, and even more so for women entrepreneurs. They also found that sending personalized and automated chatbot messages that encouraged entrepreneurs to craft introductory messages to potential mentors as well as identify how best to get started on the platform was effective in establishing mentoring connections.

Messages and notifications can suggest new matches, profile updates, and recommended user actions. Insala found that in time-bound mentoring programs, participant engagement tends to slow down at about the two-thirds mark in the program’s timeline, when participants need to be re-engaged and the program reinforced. Webinars, online training sessions, and email newsletters can help keep mentoring top of mind for participants.

Capture feedback to improve programming

Digital mentoring programs that implement ongoing monitoring or moderation tools are better able to capture feedback and issues from participants throughout the program. For example, MicroMentor enables members to self-report issues through community monitoring using a third-party vendor. Feedback can be provided on an ongoing basis or at key milestones within the program.

As we learn more about practices and techniques for offering digital mentoring to small businesses, we will continue to share these insights. Strive Community is also learning about how peer-to-peer interactions and digital networks can better support small businesses. Learn more here.