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Someone asked me the other day what the most important thing was they could do to improve their business, I responded quickly with the “mastermind group”. The person looked at me as if I were speaking a foreign language. I tried to clarify my statement, thinking that perhaps he was unaware of the term because mastermind groups do go by many different names. “A focus group, a study group, or a common board,” I suggested as alternative names but there was still no acknowledgement of what I was talking about. I then started asking other businesses that I work with how familiar they were with this concept.

The ones that knew what I was talking about couldn’t stop singing the praise of the concept but most (8 out of 11) had no idea what I was talking about. So let me explain this powerful concept and how it can affect your business. A mastermind group is a group of business people who meet on a regular basis to discuss issues about their businesses. There are many different varieties of these groups. They come in different sizes and shapes but the impact of these groups are amazing. It is also something I have been doing for my own business for the last 10 years and will never stop. Let me explain the varieties and how they work.

The first type, I’ll call it, Type 1 is the most basic. It consists of a few like businesses coming together on a semi-regular basis to just share some ideas. Many times these take place before a trade show. The group, consisting of businesses from a wide geographical area, tends to be less formal and meets without a planned agenda.

The second type of group is also informal and will consist of different types of businesses from the same geographic area. The makeup of this group might be an automobile dealership, a jeweler, a landscaper, or any type of business of similar size. This kind of group generally will discuss issues that are common to them but not industry-specific. These groups, however, can be more formal and there are companies that will serve as professional facilitators.

The most effective mastermind group, which I’ll call Type 3, is generally larger and more formal. This is the group of 6 to 15 business owners from the same industry that meet from 2-to-4 times a year. Sometimes these groups will meet for a whole day or for a weekend twice a year and then meet via a telephone conference call another couple of times during the year. They are all people from the same industry, such as all gift store owners, or jewelers, which makes the conversation even more relevant. They always have an agenda and will discuss a wide variety of topics from payroll costs, new lines, interesting ways to promote, problems in the industry, or problems in their own business that they need some help with. These groups always have a paid professional facilitator who handles meeting organization, planning and keeping the flow discussion of discussion on topic. The real magic happens because these various businesses become role models and resources for one another.

One of the most powerful tools is when these businesses submit their financial data and an independent professional summarizes all of the data so that benchmarks can be established in a variety of different categories. Wouldn’t it be nice to know what your contemporaries are spending on advertising? Or how much inventory you really need in order to be successful? No one’s actual figures are revealed to one another, the independent compiles them to create financial benchmarks. Every business knows their numbers and it’s interesting to compare your performance to the overall performance of the group.

Several industry groups use this practice as a matter of course. Community banks and credit unions, for example, religiously gauge their performance against national benchmarks on a number of key measures including market share, product sales, cross-sales of products to individual customers, household penetration and many others.

I have found that the reason why these groups are so successful is that this is where new learning and change can really occur. For some reason learning something from our peers has more impact on us than any other type of learning, not to mention the fact that the members can take the time to explain how they actually do it! Because of that, I have decided to use this forum as a collector or matchmaker for different businesses that would like to get involved in this type of endeavor. If we have enough people from a specific industry I would even consider helping to facilitate a group or two.

I suggest these mastermind groups because of the power of the concept and the effects that it can have on your business. Start off small and if I can help as a clearing house and bringing some people together, you can thank me later.