A Business Advisory Board Can Help
It’s not uncommon for small business owners or CEO’s to feel like there is no one they can turn for help, advice or validation.
Fortunately, a business advisory board can help. Business leaders who consult an advisory board not only gain camaraderie, they gain ready access to experts in a variety of fields, such as marketing, sales, financing, and others. Not to mention a valuable multi-perspective approach to your day-to-day managerial duties.
Business Success Is A Team Effort
Not ready to commit to utilizing a business advisory board in all aspects of your business? That’s fine. Start small instead. Many successful boards are originally formed with a very specific goal in mind – such as the implementation of a new strategic plan.
And you don’t always have to look exclusively outside of your business for help. Consider tapping members of your management team for specific organizational reports. Each advisory board meeting could begin with members of your management team providing updates on assigned areas, such as finances, operations/production, human resources, IT, and sales & marketing. This portion of the meeting will ensure that everybody is on the same page and will encourage your management team to buy into the advisory process. Later in your meeting, set aside time to speak confidentially with your advisory team. Doing so will provide everyone with the opportunity to speak candidly.
Say ‘No’ To ‘Yes-Men’
If you don’t trust the members of your advisory board, the initiative will not be effective. You need to go into advisory board meetings ready and willing to share sensitive information about the business, as well as personal information about yourself. If you don’t trust your board, you are unlikely to tell them everything they need to know to provide you with the best advice possible. Your board should consist of the following experts:
- An attorney
- An accountant
- A banker
- Experts in Marketing, HR and/or IT
- Other successful entrepreneurs from other industries
- Potential customers
Optimally, you should try to keep the group small and close-knit. More than six advisors on your board are not recommended as the productivity of the team is likely to take a hit.
Know Your Limitations
Excellent leaders seek out excellent advisors and the best advisors for your business are those who fill knowledge gaps within your company. They will also not be afraid to share their opinions and offer differing perspectives. You may not always like what they have to say, but you will be a better leader for hearing it. You can’t do everything and you can’t be an expert on every topic or every issue that comes across your desk. But an advisory team will help you get there.
Even though advisory boards are more informal than boards of directors, it’s important to set expectations and ground rules on any time expectations, responsibilities and duration of service. Consider a written document outlining your board’s responsibilities and logistics, such as meeting frequency, expected time commitment and compensation, if any. Quarterly meetings as a group with individual meetings as needs arise is a good framework.
Remember, your business advisory board does not have authority to make business decisions; it will offer advice that you can either take or dismiss. Speak frankly about your business goals are and explain that you don’t expect them to take on an active management role or assume any liability for your company or for the advice they offer. Providing written indemnification for each participant is appropriate.
The advisory board experience should be interesting and beneficial for all involved. Being on your board will expose members to new ideas and perspectives, and also offers mentoring, networking and social opportunities that make the experience worthwhile. At the very least, you should cover any expenses members incur to attend meetings, and provide meals when you get together. You could also consider a per-meeting fee that might range from a few hundred to a few thousand dollars, depending on commitment.
Email Rea & Associates to learn more ways a business advisory board can help you become a better business leader.
By Chris Roush, CPA (Millersburg office)