Do you have an advisory board for your small business? If not, have you considered creating one?
Perhaps you’re thinking, “Why would I want or need an advisory board?” Or maybe you thought about it and then did something else until the idea went away.
In an uncertain environment, small business owners need every edge they can get. An advisory board might offer that edge. So what is an advisory board? Hint: It’s not the same as a board of directors.
According to Entrepreneur.com, an advisory board is an informal group of local business professionals who can help you run your business better. Because advisory boards are unofficial — unlike a corporate board of directors — business owners enjoy a great deal of latitude in how they set up boards. Advisory boards can be structured both to help with the direct operation of your company and keep you informed on various business, legal and financial trends affecting you and your business.
What sort of advisors should your board include? The most common members are an accountant (usually a CPA), legal advisor (usually a business law specialist), marketing specialist, financial advisor (usually an insurance and pension plan specialist) and possibly a human resources specialist (with knowledge of employment regulations).
In addition, you might tap other small business owners who bring a track record of growth and longevity through economic down times. If you’re in a customer-focused business, which many small businesses are, you also might include several representative customers on your board.
How often should you and your board meet? This is subjective. But generally, the entire board might meet two to four times a year, with you supplying lunch or something similar. You might also want to convene one-on-one meetings once or twice a year with each member. Finally, you might include an option for emergency meetings with one or more board members to deal with unexpected events or crises.
What does an advisory board do? Members can serve as a sounding board for your ideas, review your business plan and offer referrals when you need additional support or services — secure a loan or lease new office space, for example.
Board members aren’t compensated unless you want to provide a meal or host an after hours event for them. Members will probably want some type of agreement that specifies their roles and exempts them from any liability for their support or recommendations.
What’s in it for the board members? An opportunity to give back to the community, a chance to help a small business succeed, the possibility of new professional connections and exposure to new ideas and different points of view.
To get the most from your advisory board you must do several things.
First, make sure you have clearly articulated, in writing, your goals and expectations. You need board member buy-in to ensure they understand what you want from them and avoid misunderstandings or working at cross-purposes.
Next, make sure you have a working version of a business plan so board members understand your operation and objectives. One of the first steps you and your board probably will take is to review and discuss your plan to ensure it’s aligned with your goals and needs.
Then you and the board need to agree, in writing, on a meeting schedule and format. Plan on creating an agenda in advance of each meeting, even one-on-one meetings, and keep minutes following each meeting. Your time, and that of your board members, is valuable and finite. Structured agendas and minutes acknowledge this and keep everyone on track.
Finally, always recognize the time and contributions of your board members. A simple “thank you” goes a long way. A written note goes a step beyond.