The difference between an advisor, board member, consultant, coach, and mentor.
Don’t let hustle culture trick you. Very few people get to where they are alone.
Entrepreneurs have tons of resources at their disposal, including experts like consultants, coaches, and mentors. Having professionals in your corner adds tremendous value to your trajectory. Yet, each role offers something slightly different. How do you know who is the right match for you?
Let’s explore the differences between professionals, plus when and why you would hire them.
What’s the first image that comes to your mind when you think of a coach? It’s probably something sports related.
You can think of a business coach the same way. They’re in the game because they want you to win. Like in sports, a coach gets you in shape and provides you with the technical tools you need to make the shot.
A business coach may be with you temporarily. Or, they may have an ongoing relationship with you in a specific role, like social media or SEO. Every week, they’d review your analytics and offer feedback.
Coaches give you the drill to improve your results, but it’s up to you and your internal team to execute it.
A mentor is somebody with a wealth of knowledge in your desired field they are willing to share. They are great for when you’re trying to move through your career or change careers.
Mentorship is much more intimate than coaching. They offer both professional and personal guidance. Mentors pick you up when you're down, guide you, and make important introductions. They bring you into their network and vouch for you because they admire your potential.
There isn’t a transactional exchange of value here, as there would be if you were paying a coach or a consultant. It’s more like a master-apprentice dynamic.
A consultant is someone you hire for expertise on a particular aspect of your business. It’s become such a buzzword because anybody who is an expert at something can consult.
You might, for example, hire a consultant for marketing, HR, or risk management. Big consulting companies like Deloitte go in and do in-depth views of a company’s efficiency and financial stability.
Unlike coaches, who usually maintain an ongoing relationship, consultants are project-based. There's a beginning, middle, and end to the relationship with a specified scope of work. Generally, you will have tangible milestones, metrics, and deliverables.
Consultant vs. contractor
Consultants are often contractors, as they are commonly hired on a contract. The two terms can be interchangeable, but not always. All consultants are contractors, but not all contractors are consultants. Some are freelancers who are hired for their technical expertise to complete projects with objectives determined by you.
An advisor is somebody in your field with a wealth of knowledge, like a consultant. However, they act more like a mentor in that they offer access to people, capital, and other resources.
Advisors are willing to actively guide your company to help you make better decisions, especially at crucial times. Unlike a mentor relationship, which is very personal, it’s best that your advisors are not your best friends. They’re there to offer objective points of view on the health of your business.
A board is a group of two or more people helping you make decisions for the future of the company. They are actively involved in guiding strategy and growth.
Boards usually come when your company is more established. You can be on your board, but it can also operate without you. Oftentimes, mentors and advisors will sit on a board.
When choosing board members, look for people you respect who have the knowledge, experience, or access you don’t have. They should also express a belief in your company and their intentions to make decisions that will be culturally and financially significant.
How are advisory roles paid?
Advisory roles are absolutely something you should budget for.
It sits as a separate line item because you're not paying benefits. They're not salaried or hourly employees. Still, there's an amount of money that goes to them, regardless of if they're being compensated now or in the future value of the business.
Board members and advisors are often paid in equity shares. Coaches, consultants, and contractors are paid as service providers on a contract or retainer.
How do you know who is the right fit?
First, determine what type of relationship exchange best suits your needs. What do you hope to learn or see happen in your company after working with them?
Expertise is not cheap, and rates vary significantly. It could be $400 an hour to $3,500 for a day rate. To value the cost against what you’re going to get, think about the role they will play, what you are compensating them for, and how they’ll be paid.
What will they bring to the table you can't get any other way?
It’s helpful to research their experience. Have they worked with companies like yours before? See if you can find out what roles they were successful in and which ones didn’t work out. Can you speak with people they have assisted in the past?
Thinking through these questions carefully will help ensure they are right for what your company needs. Having advisors because you think it will make your company more credible is a very different relationship than needing the expertise to do x,y, or z.
Make sure they fit your company culture, too. Look for people with friendly friction but who align with your fundamental values.
You may have to meet with them several times. Trust your gut. There’s a certain level of intuition and compatibility that’s involved.
We identify the best path for innovators, disruptors, and refiners. While we do a lot of consulting, we also offer coaching services and often act as fractional board members.
Founders and entrepreneurs hire us to determine where they are at in their journey and what their next best steps are. Our goal is for you not to need us. We want to see you do it yourself.