Harness the Power of an Advisory Board
No business is too small to benefit from having an Advisory Board and an Advisory Board is such a powerful management tool that no small business should be without one.
Think about the last time you met with other business people and had an open discussion, sharing your ideas and concerns. An Advisory Board is a formal version of this process.
Unlike a one-time or casual event, your Advisory Board is composed of people with a genuine interest in your business and a desire to see it do well. As I said in External Management Resources in the Business Plan, you can think of an Advisory Board as a management think tank. Your Advisory Board members will serve as a sounding board, a source of ideas and expertise - and give you honest advice.
1) Provides Missing Expertise.
While small business owners are notorious for having to "wear many hats", the truth is that not all of them will fit well. Everyone has their own strengths and weaknesses and very few of us are good at many different things. And then there's the fact that there are many fields of knowledge that can't be mastered without years of study.
By judiciously selecting people to serve on your board, you can fill in the gaps of your knowledge.
2) Spurs Innovation
Human beings are creatures of habit. We can't help it. Doing things the way we've always done them is always easier. So most of us have an inborn resistance to innovation.
But having an Advisory Board puts new eyes on your business operations - eyes that will more than likely see new ways of doing things and provide the new ideas you need to hear to encourage you to change things up and start doing things differently.
3) Provides Checks and Balances to Your Enthusiasm
Of course, you're enthusiastic about your latest idea for a marketing campaign or a new product or a plan to grow your business. It's your idea after all! And you wouldn't be bothering to present a bad or stupid idea to your Board.
But an idea doesn't have to be bad or stupid to have flaws and board members, who don't have the same ownership of the idea that you have, will be able to see them more clearly than you can and help you think it through - and perhaps come up with ways to get around those flaws.
4) Provides Valuable Contacts You Wouldn't Otherwise Make
It's not just their own expertise that your new Advisory Board members will bring to the table. Board members will come with their own circles of contacts, contacts that may be very valuable for the development of your business or particularly helpful to individual projects. Whether your business needs financing or is looking for information on green building, a wider circle of help is always useful.
5) Provides Support
More than anyone else, your Advisory Board will be on your side. They will be people with no ax to grind who want to listen to you and advise you. Above all, they'll want to contribute to your business's well-being. At its best, an Advisory Board is like having a whole group of coaches.
Advice for Setting Up a Small Business Advisory Board
Two to three people are sufficient for an Advisory Board for a small business. They will be expected to meet with you (usually on a quarterly basis) to discuss and advise. While being an active part of your business is payment of a sort, you should also pay your Advisory Board members by hosting an upscale lunch each meeting, or by paying each Advisory Board member an honorarium each time.
You will also need to prepare for each meeting of your Advisory Board by preparing an agenda which you'll need to distribute to your Advisory Board members ahead of time. (Include any related materials necessary.)
Perhaps more difficult, you need to be prepared to be completely open and frank with your Advisory Board, sharing both your hopes and your fears. They won't be able to advise you properly or well if you hold back.
Where will you find the intelligent, accomplished individuals you need to sit on your board? Just look around you. There are many recently retired executives and managers who might be interested. Other business people and vendors may also be good choices. Aim high. Choose people you admire that you think you will be able to develop a relationship of trust with. There's no harm in asking, and you may be pleasantly surprised when they accept.
Don't Miss Out
An Advisory Board is an especially valuable management resource for small businesses. No single person can know everything, and ad hoc, on the fly advice can be worse than none. An Advisory Board that meets regularly gets to know you and your business and can provide the management expertise you need to avoid shoals of mistakes and set your business on a true course.