Advisory Board

Does your small business have a board of advisors?

Many small businesses perish for lack of expertise and direction. The entrepreneur carries all the weight but does not often have the talent to make the right moves.

As an entrepreneur you can supplement your skills with the expertise of a board of advisors, a mentor, or a business advisor.

Even a one-person home-based business can benefit from an advisory board. You can use the board to provide a sanity check for the direction of your business, and your new ideas and initiatives. One of the key roles of a board is to hold the business owner accountable. If, in a prior life, you worked for someone else or another business, there was someone above you to whom you were accountable. As a sole business owner, you are accountable to no one, so it is easy to slough off tough decisions and jobs that you really don’t want to do. With a board, you will be accountable for the goals that you set and the tasks that you promised to do. You don’t want to walk into a board meeting and say that you did not get done what you promised at the last meeting.

An advisory board should meet regularly and offer you thoughtful input. The burden is then on you to act on input from the board. You need to carefully select your board, making sure that each member is someone you like and trust. Offer to serve on the advisory board of business owners whom you select for your own board.

A board of four or five people is ideal. Such a group may include a trusted business advisor, banker, accountant, lawyer, insurance executive, and a non-competing expert in the same industry as your business. It is important for the board to consist of people from multiple disciplines, and for you to admire and trust them all. Search for people who have expertise in areas in which you are weak. For example, if you lack marketing expertise, include a marketing person on the board.

A quarterly board meeting might be held as a luncheon or breakfast with no cost to you beyond that of the food. As your business grows you may consider the practice of providing advisory board members a stipend for each meeting attended.

Make sure that you provide an advance agenda of each meeting to all of the board members. Topics might include the level of sales during the interim since the prior meeting, tough issues you are dealing with, what you see on the horizon for your business, and actions taken since the preceding meeting. Follow up each meeting with notes from the meeting, including a list of specific action items.