The Value of Recruiting an Advisory Board When Running a Business
A board of advisers may sounds more like something you would find at a big company, but it makes a lot of sense for a startup and small businesses, too.
No matter who you are or how much experience you may already have in a particular business or industry, it never hurts to have some outside people who are familiar with your business and situation to lean on when you have important decisions to make.
If you are brand new to the business you are getting into, then that is doubly true.
I frequently check in with my trusted advisers whenever I am considering something new, looking for a quick logic check or struggling with a decision for my bookkeeping business or for any of the other side business projects I am involved with and I always appreciate their insight even if I don’t exactly follow their advice.
A board of advisers is an informal group of people who know you and your business and meet on a regular basis, and also one on one, to help you guide your business, make decisions, grow and network the business, and generally help keep you out of trouble.
Ideally, the members are made up of at least some people who know you well and aren’t afraid to give you an honest assessment of things, and some people who know the business or industry well, and can help keep you from making mistakes or having to reinvent the wheel to get things done.
Here are some things a good board of advisers can help you do:
- Raise money and make introductions to investors and lenders
- Introduce you to vendors and help you get better terms
- Introduce you to key sales reps and distributors
- Provide advice on pricing, sales and marketing strategies
- Help you gain market exposure and make introductions to potential customers
- Advise you on hiring, managing and growing staff
- Provide references to service providers including accountants, lawyers and tax professionals
- Mediate disagreements between partners
- Offer additional credibility to the business
Not every adviser will be able to do all these things, but hopefully between them you will cover most of these topics.
A good number of advisers is between 4-8. More and it becomes unwieldy, fewer and chances are you will be missing out on some key knowledge areas. Compensating advisers can be anything from a quarterly dinner to gift certificates to an hourly consulting fee, or nothing at all. It depends on the size of your business and the specific amount of work and time you are requesting from them.
The best place to find advisers is at industry related events, industry associations, entrepreneur events, and friends in the business. Try to get a good mix, and don’t be afraid to pull in someone who is somewhat out of the box- a marketing professor from a local college, for example. Don’t just grab a bunch of your friends, unless they all happen to be business experts and are willing to overlook your friendship and give you real feedback!
It takes very little effort to approach someone and ask if they would be interested, and the feedback and help you will get will very likely repay the effort it took to recruit them many times over.
You are obviously not under any obligation to take the advice they give you, but it is often very helpful to have the informed opinion of people outside your immediate situation to help you accurately assess things and come to the best conclusion.
Take a few minutes and start a list of who would be your ideal advisers. Then, go out and make some contacts and see if you can recruit some. It will only benefit you in the long run.