Archive for the Strategy Category
Many business owners and CEOs of small to mid-size companies and nonprofits spend a lot of time working in their business as well as on it. This is especially true for those who downsized due to the recession.
For those who have had their noses to the grindstone you can lose perspective as to where your company fits into the economic picture, your industry and the global market place. Fortunately, you can turn to your advisory board to provide the perspective you may be missing. Of course this will only be true if you were thoughtful and deliberate on how you selected your advisors.
The types of questions to ask your advisors if you feel you’ve lost perspective:
- What purchasing trends are you seeing in customers now that the recovery has begun?
- What are the borrowing trends for businesses our size?
- Where are companies accessing capital if traditional channels are still closed?
- What opportunities have we overlooked that we need to explore?
- What did we try in the past unsuccessfully that might now work in the new world order since the recession?
What other questions would you add to the list?
Need more information on how to set-up your advisory board? The Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board is now available.
When cash is tight, the bank won’t increase your loan and the future isn’t yet clear, these are good indicators having an external advisory board will be valuable. An advisory board can be the bridge between what you need today and what the business can afford.
Five Questions Signaling Now is the Right Time to Establish an Advisory Board:
- Are you preserving cash flow by either not hiring senior staff or not engaging consultants?
- Do you have pressing issues but don’t know where to get the answers or the ones you’ve received aren’t useful?
- Has the recession and now the recovery presented business opportunities you aren’t sure how to take advantage of?
- Does your business strategy need tweaking given all the turmoil the recession has caused?
- Are you simply worn-out from doing it all yourself and need additional brainpower to think through decisions?
For many advisors the fee they collect is at the bottom of the list for why they agreed to serve. Many advisors will start out serving for free. So if you have identified a few individuals who could help you out and they aren’t people you would normally engage as staff or consultants, invite them for coffee and explore the possibility. The worst they can say is no but it’s likely they will say yes. During an economic recovery is a perfect time to start your advisory board.
Need more information on how to set-up your advisory board? The Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board is now available.
Does this sound like you? You and a close friend have decided to go into business together. After all you get along so well what could possibly go wrong? What is the worst thing that could happen?
Many things could happen not the least of which is the friendship dissolves and one of you takes legal action against the other. Here are 7 tips of what to consider or do before you go into business with friends.
- Think long and hard about the potential loss of the friendship. Can you weather losing the friendship. Is a successful business worth this price?
- Strengths & Weaknesses Analysis: Each of you needs to create a list of what you’re good at, what you like to do, what you aren’t good at and what you hate to do. Then compare to determine where there are gaps.
- Develop a list of critical tasks, activities and functions you will need accomplished in the business.
- Divide up the responsibilities using the lists you developed under #’s 2 & 3. Make sure you equally distribute what people don’t like to do and give people the responsibilities they are good at. Anything left unassigned represents where you will need outside help.
- Develop an exit strategy. Today, before the business has a value, discuss and establish how a founding owner will be bought out. This is often referred to as a Buy/Sell Agreement. This needs to be done while cooler heads prevail and there is no emergency situation.
- Establish how the owners will be paid. How and when will money be withdrawn from the business by an owner. What constitutes a legitimate expense or cost that triggers reimbursement. It needs to be equitable and not allow any one owner to put the business in jeopardy.
- Create a “Business Prenuptial” which is a written document that sets out the what, where, when and how of your ownership with your friend. It is the culmination of the considerations under Tips #3-6. Anything that is ambiguous is an opportunity for disagreement and adverse consequences so resolve them now. Include a provision for when you will review and update the information.
In the course of completing these tasks don’t be surprised to find out you are better as friends than you could be as joint owners.
What additional tips would you suggest?
