The Value of an Advisory Board
Every day, small business owners face challenges that they need help solving. Sometimes their teams can assist, but other times these challenges may be in areas in which everyone lacks expertise, or simply lacks experience. At these moments objective and experienced voices can help small businesses to solve problems, grow, and thrive. Those voices can and should be part of your business’s Advisory Board.
What is an Advisory Board?
Don’t be scared by the term “board.” This is nothing like a board of directors, with formal legal and fiduciary responsibilities. This is simply a group that meets on a regular basis to “advise” on matters that you need help with.
What is it For?
An Advisory Board is a toolbox with many different tools inside. Typical activities at an advisory board meeting could include:
- Examination of current financial statements
- Critique of a planned marketing initiative
- Postgame of a new product/service launch
- Discussion of a challenging team member
The advisory board allows business owners to speak their minds: there’s no employment relationship here so there’s no reason for any of the parties to hold back.
How to Build One?
If you aren’t a hermit and are regularly circulating through your business community, you probably already have the contacts necessary to build a board. You’ll want to keep it small, somewhere between three and five members altogether. While it would be ideal to have at least one person with some background in your industry, don’t be afraid to have board members who have never had anything to do with your industry: outsider perspective is valuable.
You may also want to avoid tapping family or close friends: we all know the dynamics of interpersonal relationships can sometimes lead to people failing to say what they should in any given situation. Business is no different.
What’s the Plan?
Before you invite anybody to do anything, start with why. Why are you putting this board together? Perhaps you are frustrated with your growth rate and aren’t sure why things are stagnating. Maybe a part of your business is really broken and you don’t know how to go about fixing it. Maybe you’re completely happy with your business and you simply want to make sure you’re doing all the right things and covering every angle. Again, keep it focused: don’t write down every single reason you want an Advisory Board: one to three will do.
Once you know your why, think about when. How often would you like to meet? Monthly is a bit too frequent, and annually is not really that helpful. Quarterly or every six months is best.
Finally, think about how you’d like to compensate your board members. Very often people will be honored to be asked to help you with your business and won’t expect or demand compensation. That said, it’s important to honor someone’s time and the compensation can be as simple as food at the Advisory Board meetings and occasional gift cards or thoughtful presents throughout the year. These people are giving you their valuable time and expertise: respect that.
How Does a Meeting Run?
Like most meetings, you might want to just have some time for people to arrive and relax, and of course at the very first meeting, people will need to introduce themselves and their connection with you. After that social time, you can start the business part of the meeting. Deal with the “must cover” topics first but also leave time for other less important topics. Be okay with disagreement, even passionate disagreement. Let everyone know from the start that it’s not about winning arguments but about sharing ideas.
Ideally you, the business owner, should be taking notes. This forces the meeting to slow down while you articulate in your own words what you are hearing and make sure that everyone agrees. Those notes should be shared after the meeting and in between meetings you may want to offer a periodic short update on a particular matter. The Board should not only be hearing from you when you summon them to a meeting.
You’re going to be dealing with sensitive company information, so each of your board members should sign a basic NDA. Also, don’t be disappointed if someone you ask to be part of your board declines: instead, ask if he/she might know someone who would be a good fit. Finally, check your ego at the door before and after every meeting. These people are here to help you, not attack your baby. Don’t take things personally: strive constantly to see things from their perspectives and hear them out. You just might learn something.
Want to build an advisory board but feel like your network is a little thin? We know a LOT of people. Give us a call and see if we can’t help you fill those seats.