Starting and growing a business is complex and it’s impossible for you — the business owner — to know all the answers. The more information, talent, and resources you can access, the greater your chances of success. Advisory boards can help. No matter how small or large your firm is, you can benefit from building a business advisory board.
Think about the last time you met with other business people and had an open discussion about your business challenges. Talking through various issues with others can often help you identify strategies you may not have seen before. An advisory board formalizes this process.
An advisory board is a cost-effective way for small businesses to gain critical expertise so you can adjust your course as need be. Board members may also be able to open doors for you by utilizing their networks. Because advisory boards are not formally part of your company they don’t encounter the risk of fiduciary or legal liability. The advice they share with you is non-binding — informal.
Entrepreneurs are often eternal optimists, which is good, but it can have disadvantages too. Sometimes they miss obvious red-flags because of their “can-do” attitude. A strong advisory board can help you focus on reality by pointing out potential obstacles.
To get started, decide how many people you want to serve on your board. Having too many people often results in a lack of productivity. Consider having two or three people and choose wisely. Selecting the right individuals for your board is critical. In order to make the right choices, you should consider your personal skills and strengths. Make a list of the areas in your business where you need the most help. Use this list to identify advisory board members who can complement your attributes. Remember to look for people who are strong enough to take unpopular stances and give you honest feedback. It’s critical your board members understand the dynamics of a small business and the challenges of your industry. You should also consider whether you are truly willing to listen to advice that runs counter to your ideas.
“Entrepreneurs are often contrarians who believe they can succeed no matter the pitfalls and may not want to hear opposing views,” notes Bob Brockhaus, Ph.D., who has worked with start-up companies for more than thirty-two years as the former Coleman Foundation Chair in Entrepreneurship at Saint Louis University’s John Cook School of Business. He finds many entrepreneurs are so confident in their enterprise they overlook essential information.
Always be prepared for your advisory board meetings to get the most benefit from them. Choose a location for the meeting that is free of distractions. It’s a good idea to distribute essential information in advance of the meeting so your board members have time to review it.