Ever feel the need to talk to someone outside the company about a business situation, personnel issue or significant business trends? I know I did.
A 2013 survey of more than 1,000 small to midsize companies found that just 6 percent had created advisory boards in response to that need. But those companies saw 27 percent growth over a three-year period, according to the survey, compared with just 11 percent for the 94 percent that did not form an advisory board. For the companies that did, sales growth over that period was 67 percent, with 44 percent of that coming after the advisory board was formed.
No business is too small or too large for an advisory board. You can form an advisory team to help recommend solutions and overcome the bumps in the road of continued success.
There are just a few questions to ask yourself: First, under what circumstance do I typically need advice? Second, who do I know that can provide what I’m looking for? Third, is that person’s expertise relevant? Fourth, in how many ways can I benefit from such resources? Fifth, do the candidates know my business? Finally, are the potential advisers conveniently located?
If the answer to each is “Yes,” form an advisory team of no more than five people. Any more and each meeting becomes a crowd control situation. Strive for a membership balance membership between strategic thinkers and those who are detail-oriented. It’s a good idea to discuss your plans for the first meeting with a trained facilitator who can then help form the group into a team during a few of the initial meetings. Summarize expectations and responsibilities in writing at the first meeting.
The advisory board is a short-term solution and should be active for no more than three years. Any longer and you risk losing their objectivity and ability to challenge you appropriately.
Be sure confidentiality is assured by asking the members to sign a non-disclosure agreement. Overlapping term limits are a good idea as well, so people come on and off at different times.
Meet with the board every month in the early stage, so members quickly become familiar with the business, its direction, progress and concerns. Each meeting should have an agenda of three to five topics. Every quarter, it’s a good idea to bring them up to speed on current business growth and development and any future plans. Meeting on a regular basis gives the opportunity to articulate the value proposition, business challenges, key selling points in response to the needs of the market, and specific questions to ask of the board. And ideally, advisers should ask you a lot of questions.
Some midsize businesses offer each member compensation — usually not a large amount, but enough to cover time and expenses incurred. For solo practitioners, a catered breakfast or lunch would suffice.
With an advisory team in place, you have a sounding board of people who have followed your progress, who are candid in their advice with varying perspectives, and who can expand your contacts in the community. The advisory board I assembled had five people: a banker who was also a client; the CFO of a large manufacturing company; two consultants who were not competitors; the vice president for human resources of large architectural firm, also a client; and a small-business owner. They provided advice — mostly financial and practical — and some leads, confirmed a sense of direction and identified trends for the immediate future.
Fresh ideas from new perspectives are a gold mine for today’s small regional and global companies. A well-thought-through advisory team helps you look for the breakthrough difference when competing for new revenue in a crowded marketplace. Only you can decide where you need advice the most.