Do you feel like you’re an island, running a business with very little external input, doing the best you can based on instinct and pure passion? Well consider setting up an advisory board.
Advisory board is a group of experienced individuals passionate about your business and willing to contribute. An advisory can provide small to medium businesses with an invaluable resource and support structure, and it doesn’t have to be a daunting or expensive task.
How to create an Advisory Board and Why?
The first important step is choosing the people as your advisers. Choose people you admire and look up to. Choose people who have a skill that you don’t. Choose people you can trust – they should be capable of handling sensitive issues and confidential information.
4 types of people to consider on your Advisory Board:
- Someone who understand the legal system
- Someone who is great at finances
- A strategic marketer or business development professional
- An HR-people type person.
Don’t hold back asking for help. People will often be honoured to be asked to sit on your board, irrespective of whether they have the time, busy people find time remember. You will need to agree a method of compensation to fit each member of your board and you may be able to get creative around how that is achieved, especially in the early stages of your board’s development. Perhaps some contra work, % of profit increase etc.
Setting expectations from Advisory Board
Be sure to set some expectations. What do you want your Advisory Board to do? Your legal person may help you select business structures and deal with complex issues around shareholdings and ownership, distribution models and compensation models. Your finance person obviously helps you manage the growth strategy on paper and ensure you don’t over spend and over commit. Your HR person will help you deal with complex employee issues, contracts and remuneration. Your marketing person will help set the positioning of the business and approach your target audience for growth. Fundamentally though, you must get everyone involved in setting the strategy, as you will be the one implementing it.
A great discipline is to develop a one-page strategic plan so that everyone is aligned with the direction of the business and can see in one simple mechanism the path to achieve those goals. Set short-term, medium-term and long-term goals and agree to the steps to get there. Verne Harnish has a great one page strategic plan template available for download from his website, or consider the Balanced Score Card approach to planning.
How often does an Advisory Board meet?
You don’t have to have a meeting every month. You may decide to hold group meetings quarterly and meet individually with your board members in between. But when you do have the meetings, be prepared, distribute an agenda well before the meeting so your board members can prepare.
Choose a location that is comfortable and free from distractions. Distribute information such as financial statements well ahead of time so board members have plenty of time to read through it and prepare their own thoughts and contribution. Keep board members up-to-date via email between meetings so that there is not too much catching up to do at the start of each meeting.
As part of your business plan you may decide to have each member drive a particular project or lead a new initiative. You may decide to have each member take it in turn to chair the meeting. Whatever you decide, have a plan and make sure everyone understands their role. Maintain a professional edge. Your advisers are not employees or suppliers and cannot be held accountable for your decisions. They are there to make suggestions and observations based on the information you provide.
Steps to setting up an Advisory Board
1. Determine the size of your board.
2. Choose the right people (they do not have to be based in your city but consider travel costs).
3. Work out the compensation for each member individually that suits them and you.
4. Map out your expectations.
5. Avoid too many monthly meetings, utilise technology to keep everyone informed and meet one-on-one as needed.
6. Choose a project for each member to drive. Be clear on the roles.
7. Have a plan for growth and make sure everyone understands it.
Running a business is so much easier when you can bounce your ideas off a group of trusted people who are specialists in their fields and who are dedicated to seeing you succeed!
Jane Toohey is a non-executive company director, and a strategic sales & marketing consultant. Having been a business owner herself, she brings commercial savvy to any situation and the ability to drive and develop business. She is highly creative and can develop ideas that cut through the media clutter. She currently operates as an outsourced strategic director for a number of companies and works closely with various business partners to deliver professional integrated solutions to a variety of national clients and lead effective marketing teams to generate results. She currently sits on the board of GIVIT.
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