Take your business to the next level: Create an advisory board
By John Hamilton
A trusted advisory board can provide the expertise to help business owners make tough decisions.
Business owners: Do you ever feel alone when making a tough decision?
If you don't have expertise in, for example, finance, and you need to know how much cash your business will need throughout the year if you pursue a new growth opportunity?
CC by Paul Downey
I recommend that you create a business advisory board.
An advisory board is a group of three to five individuals of your choosing who offer the expertise you need. The group meets with you regularly (at least quarterly), builds a relationship with you, gets to know your business, and offers expert advice and strategies to keep in sync with the fast-paced reality of today.
This article from the Australian Institute of Company Directors talks about the benefits of an advisory board.
You retain control
A beneficial element of having an advisory board (in contrast to a board of directors) is that you, and only you, remain accountable for moving your business forward. Advisors don't make the decisions they offer recommendations based on their expertise and experience. The power remains in your hands always.
You may say that you have advisors now you have an insurance person, a CPA, an attorney. That's great. But although having one-off conversations, such as once a quarter with your accountant, may garner some advice, it may not be sufficient.
Regularly meeting and discussing your business goals and challenges with people interested in your success is the way to move your business forward.
A meeting with your advisory board is conversational, a time to have an open discussion about your business goals and concerns. There's no need to invoke Robert's Rules of Order or have the meeting in a dark-paneled corporate board room. You can hold the meetings over lunch on a deck with a view, and the agenda is what you make it.
Although the meetings are relaxed, you need to be open and direct with your advisors. Hemming, hawing, or holding back on what you think you want to do will not benefit you. Your advisors can't help you make the best decisions if you can't or won't share all the details they need for informed suggestions.
Your advisors help you challenge assumptions and make better decisions. They aren't shy about asking you the tough questions that you need to answer to move your business forward. Members act as a sounding board and offer ideas from their unique perspectives.
Who to choose?
Who do you choose to be an advisor? Ask yourself what expertise and knowledge you need for your business. What values matter most to you? What personality type do you enjoy working with?
Your advisors should be people with qualities you've identified above. They also should believe in you and want you to be successful.
Having an advisory board is an exceptional way to invest in your business, because it complements and extends your current management team, especially if your management team is made up of only yourself.
If you still have doubts, check out this study from the Business Development Bank of Canada that shows, empirically, how SMEs with advisory boards financially outperform SMEs that do not have advisory boards.
John Hamilton is the Community Loan Fund's Vice President of Economic Opportunity and Vested for Growth's Managing Director.