In a previous post I discussed how seeking out a mentor can help a business owner gain more depth of experience without incurring a lot of cost. In this post I discuss another option: using an advisory board also known as a non-legal board of directors.
The benefits of using an advisory board are numerous and include:
- Providing additional business experience, skills and functional expertise that maybe missing within your company.
- Strategic thinking about how to position the business.
- Providing access to new contacts and resources.
- Increasing credibility to the outside. This is particularly useful to a start-up.
- Creating greater accountability of senior management.
- Providing an outside perspective about what is working and not working inside the company.
Starting an advisory board will work best where the business owner is completely open with sharing company information. Any limiting of access to financial and other key information handicaps the advisors and dilutes the benefit to you the business owner. There are times when you might bring a group of advisors together to discuss a specific area. In this case financial information may not need to be disclosed.
Here are the questions I suggest you answer before starting:
- Why do you want an advisory board? What are your goals and objectives for forming a board?
- Are you clear on the vision for your business several years out? Knowing your vision will inform the kinds of advisors you need to recruit.
- What will it take to make the advisory board effective? Do you have the time to properly prepare for each meeting?
- What are you able and willing to pay advisors? Some will serve for free while others expect to be paid.
I have facilitated several advisory boards over the years and each company has had achievements that otherwise would not have been possible. The magic of synergistic thinking occurs at almost every meeting and it’s an effective way to solve problems and grow businesses.
If you have experience with an advisory board either as a business owner or participant, please share. Look for future posts on how to recruit advisors and run successful meetings.
