Many businesses and nonprofits face ongoing cash constraints. They are not hiring staff or consultants. The business growth is stagnant and owners/CEOs are making decisions in isolation. In this post I will compare ways a limited budget can be optimized to get the business owner or CEO help.
The Assumption: The company has a $25,000 budget.
- Hire a staff person
- Engage a consultant
- Establish an advisory board
Analysis of what each option “buys” the business:
Option #1-Staff: At $25,000 the business may not get an employee with much depth of experience. Also, there are the payroll taxes and related insurances that need to go along with the hire. These will either cause the expense to exceed the budget or further reduce the amount available for salary.
Option #2-Consultant: When you engage a consultant there is a chance the project can not be completed for the amount of budget available. The consultant will want to propose a follow-on project. This leaves the business with only a partial solution and no one to assist the business owner or CEO if the solution doesn’t work.
Option #3-Advisory Board:
- If the business or nonprofit decides to establish an advisory board, here is how the $25,000 might be used:
- $3,000-$5,000 to cover set-up expenses, i.e. meeting with prospective advisors, creation of briefing books, rental of meeting space, and meeting food costs.
- $3,000-$5,000 for facilitator or lead advisor fees assuming quarterly meetings. If the CEO leads the meeting (not recommended) this amount could be saved.
- $15,000-18,000 to cover advisor fees. If you pick 5 advisors and have quarterly meetings each advisor is paid $750-900 per meeting. Advisors may be willing to serve for a smaller or no fee leaving the business with cash reserve.
- Establishing the advisory board provides the business with experienced individuals who both collectively and individually can be called upon to help the owner/CEO address issues facing the company.
- Each advisor will provide an outside perspective that may be missing presently in the organization.
You can have an advisory board up and running in 90-120 days. Find out what steps to follow…go to the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board.