You’re in business, and you’ve built a good team of people around you. But it’s not enough! You are all so busy working day-to-day, IN the business, that it’s hard to poke your head up above the weeds and look around. And you’re probably making mistakes that are costing you time, money, or both — or are about to.
Having an outside Advisory Board is a great solution to these challenges, and I’m here to lay that out for you today.
Why should you have an advisory board?
- Advice – people on advisory boards have “been there, done that”, and will save you time and money!
- Credibility – letting customers, investors, even great employees or partners you want to attract know that you have an advisory board, and you’re perceived as a strong contender – someone serious about their business.
- Accountability – they’ll hold you accountable to the goals and objectives you’ve set, with their advice, for yourself and your company.
- Potential investors — they want to see an advisory board because it’s part of what makes the TEAM strong. They want to know your ego can take advice.
- Grow your revenue – advisory board members will help spread the word in their networks about your business and add revenue.
- Business connections – need an IP attorney, manufacturing subcontractor, or marketing agency? Advisors can help here too!
Why not a Board of Directors?
- Advisory Boards have no formal association with, or ownership in, your business. Directors do.
- Advisers have no liability on their part for the corporation, therefore no Directors and Officers Insurance is required.
- Advisers have no hire or fire capabilities, so you’re still 100% in charge.
- Advisers are generally volunteers. Directors get paid.
- All this being said, there ARE appropriate times to build your Board of Directors, but that’s a different post!
What your Advisory Board should look like.
Picture the main departments in your business, like Sales & Marketing, Operations, Administration, and so on, and allocate 1 or 2 seats on your board for each major area.
When I built my Board at my telecommunications company, I had 4 major areas identified, and I found the best people I could in each area: Sales & Marketing, Operations Management, Technology, and Finance. Each person was particularly strong in his own area, and challenged me to grow.
I used an executive search firm to help me, and in fact, I’m on their Advisory Board today!
Who should be on your Advisory Board?
- Someone with notoriety or significant experience in the space your company operates.
- Someone you can work with and who can be part of this team you’re creating.
- Someone who will help promote your business in their circles and networks.
- People who will show up, and who will be available for your call or email.
- People who WANT to be there.
Where do you find these advisers?
- Start with your own network and ask for referrals.
- You already should know who the top players and people in your industry are. Ask them.
- If you’re new to the industry, do your research in industry publications and associations.
- Use an executive search firm – a headhunter – who specializes in your industry. This is what I did.
Ok, you’ve gotten your advisers to commit. Now what?
- Meet face-to-face periodically. I liked quarterly, but that might be too much for some advisers. No less than annually, IF you’re keeping in touch electronically.
- Keep them apprised of your business activities and status on goals you’ve set out to achieve.
- List them on your website and corporate presentations.
- Ask them good questions as they come up, and they’ll stay engaged and love to help.
- When convenient, try to have a lunch, or even just a quick phone call 1-on-1 with them to build those relationships.
Why would they want to be on your Advisory Board?
- Being on advisory boards is a nice way to add credibility to their own resumes.
- People who have accomplished a lot usually like to give back to their industry and help others.
- They’ll get to meet and network with people in their peer group they otherwise might not have met. It helps with their business connections.
- They may have a particular interest in your industry or your company.
- They might want to invest or become a Director at some point down the road.
Having an outside Board of Advisors is a really smart thing to do for ANY business, and especially for startups and early-stage businesses just getting off the ground. Go start yours today, and if you have any questions for me, just leave them in the comments section of this post!
As always, I appreciate your shares! Make it a great day! — Rick