One common problem that entrepreneurs face is the problem of finding a group of peers who understand the challenges of running a business. Sometimes, with the constant battles of putting out fires, solving problems on a daily basis that they sometimes forget they need to take a step back from the business and deal with larger strategic issues. This is where an experienced board of advisors can come in and provide a sounding wall to vet ideas and strategies that will benefit the business.
Advisory boards are such a great tool that no small business should be without one. It’s like having a group of experienced consultants working for your company, those who can provide you with their:
• independent perspectives,
• special skills,
• and network of connections to your company.
Is creating an advisory board right for me?
Although there are numerous benefits to having an advisory board, it does take a lot of planning and determination to create one. As an owner, you must be aware of confidentiality issues – to be able to trust that your advisors have your best interests at heart and not divulge company secrets. Likewise, you must be ready to communicate the issues that your company face, such as operations, employee problems and even opportunities. Without open communication from both yourself and the board, it will be very difficult for your business to benefit from this collaboration. Of course, when you recruit for an advisor, the person you want has to be capable of handling sensitive issues and confidential information.
For your advisory board to be effective, you must create guidelines in these areas:
Responsibilities – You should create a formal job description for everyone involved in the board. By clarifying their duties, there will be no overlap and misconceptions on their duties. When you recruit, be aware of what your organizational needs are, so you have the right expertise available.
Meetings – You should outline the frequency, length and location of your meetings. Remember, your advisors are also busy, so you should leave some flexibility in meetings to accommodate their schedules.
Compensation – Be clear on how you plan to compensate your advisors. Will you compensate them for attending meetings? And how will you do it – with cash or stock? You should be upfront about this – remember that your advisors are helping you out of their busy schedule.
Having an advisory board is a huge benefit to your small business, provided there is a clear direction and is supported properly by yourself and your company. It will allow your small business to compete against larger competitors by working with talent that might not otherwise be available.