Archive for the Advisory Boards Category
You’ve identified a prospective advisor. Perhaps you have even met a few times. The individual expresses an interest in considering the option but mentions that before she can do so she needs more information. As you are likely a privately-held company the information can only come from an internal source.
How to Proceed
- Get a signed confidentiality agreement from the prospective advisor.
- Remind the prospective advisor you are sharing information not available in the public domain.
- Get a list of what specific information the prospective advisor is seeking.
- Provide the requested information as soon as possible.
- Offer an explanation of either when you will have the information or why it’s not available, if you don’t have a particular piece of information.
Types of Information to Provide
- Historical financial statements for the last three years.
- Current Strategic Plan including financial projections.
- Operating Budget for last three years.
- Capital Budget for last three years.
- Organization Chart.
- Current Marketing or Promotional Plan
- Recent Competitor Analysis.
- Recent Marketplace profile/review.
- Top Ten Customers.
- List of people advisor might want to speak with as part of his/her due diligence.
Again, if you don’t have all of the information explain why. It could be one of the reasons you are forming the advisory board! If you don’t make it a big mystery it won’t become a deal breaker if you decide to invite the prospective advisor to join.
What other information would you provide to someone you’re considering for your advisory board?
Want to establish an advisory board? Then purchase the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board. You can have your advisory board up and running in 90-120 days if you follow the steps laid out in the Advisory Board Kit.
Too many business owners wait to evaluate their operating and financial results until the after the year is over. I was often hired as a contract CFO when the business owner finally realized that many changes or course corrections needed to occur throughout the year. I find organizations that have advisory boards understand the need for reviewing results more frequently than once a year and in fact generally do so at every meeting.
Here are ten questions to consider when doing a mid-year or more frequent review:
- What’s keeping the CEO up at night? Do the financial results support the lack of sleep or is he worrying needlessly? Alternatively, what should he be worrying about?
- Where is the current year revenue level compared to the budget and last year? What’s in store for the next six months, higher or lower? This is important to know as it impacts expense levels and capital spending.
- Where are the current year expense levels compared to budget and last year? Have there been any surprises? What’s anticipated for the second half of the year?
- What are the hiring plans? Is the present staffing level sufficient to manage any upswing in the business now that recovery has started? Can this be done without burning out current staff that may already be overworked? What are the signs more staff is needed?
- What are the plans for purchasing equipment and facility upgrades? Does the company need to own or would they considered leasing?
- What needs to be changed in the marketing plan based on the results for the first half? How will changes impact expense levels?
- What do the accounts receivable and payable aging reports look like? How are customers paying? How are vendors being paid? How old are the oldest receivables? The older they get, the harder they are to collect.
- Will there be any bonus payout? About mid-year employees start to think about and even inquire about their bonus. Will the payout be delayed in order to preserve cash? What will be the message to those employees who will be affected? After all it could be the second or third year of no bonus and perhaps no wage increase.
- How are you taking advantage of the recovery? Are you developing new products or services? What are your competitors doing?
- Lastly, what gets you up in the morning about your business? Where is the excitement and enjoyment? If there isn’t much of either, perhaps it’s time to reevaluate what you are doing.
Many of us have ventured into very different and sometimes new territory as a result of the recession. The guides we previously relied upon may no longer exist. The only way to develop new ones is to take an active approach to reviewing your operating and financial results. Don’t wait…do it now!
Establishing a National Entrepreneurship Day is the brainchild of the founders of the Grasshopper Group who launched the initiative on May 11, 2010. So far in excess of 1800 signatures have been gathered.
Recognizing that the economic recovery is dependent on jobs creation and that most of those jobs will be created by small to mid-size companies, the founders of the Grasshopper Group and others think the government needs to pay more attention to those size companies.
The Kauffman Foundation, which supports entrepreneurship, is planning to tie the kick-off of its annual Global Entrepreneurship Week in November to National Entrepreneurship Day.
The signature drive is being publicized through Twitter and Facebook in order to gather the estimated 1 million signatures needed to have the petition receive serious consideration by President Obama. The Boston Globe included an article in the Business section yesterday about the idea as Grasshopper is a local success story.
As a long-time consultant and contract CFO to entrepreneurial ventures I want to see this day get established. So tell your family and friends!
