Do you have a Board of Advisors?
Here is my question to you: who do you turn to when you want an insightful, honest, well-thought answer to a question. I would argue that most of you have no one.
|Staff||Good staff are definitely insightful. And their answer may be well thought out. However, it cannot be honest. There are just too many risks when the answer is a challenging one. All you business owners that think you are getting honest answers are just wrong.
|Spouse/mate||It would be very rare for a mate that does not work in the business have insights to really help. This person is there to support you, not challenge you. Or the challenge may relate more to their safety than answering a challenging business question.
|Business partner||For those of you that do have a partner, you have someone that can meet all three criteria: insightful, honest and well thought out. I hope your relationship is strong enough where you can challenge each other.
|CPA, Insurance Agent, Lawyer||In general, this group has limited knowledge of your company and do not understand its’ day- to-day operations. I think you can get great answers and great advice from this group, but they do not have enough involvement to meet the insightful criteria.
|Business coach||This is another person that can meet all the criteria, similar to having a business partner.|
So, what’s the solution? It’s laid out in the subject of this post. An advisory board is a great strategy. I would argue that this concept even works if you have a partner or a business coach. But it is almost necessary if you don’t.
Here are some thoughts about setting up an advisory board:
- Be pure of purpose. Choose people who have earned your respect. Do not put people on the board because you think they can help you grow sales or because your wife’s brother is a really good guy. Choose good business thinkers that are willing to challenge you.
- This is not a board of directors, it is an advisory board. They have no decision-making power, they are here to give you advice. They would prefer this position because their liability is greatly limited by only giving you advice (please verify this with your attorney).
- For most small businesses, meeting quarterly is almost perfect. Monthly is too often for people’s busy schedules and waiting longer does not work.
- You must have a very tight agenda. You want to talk about medium-term tactics and long-term vision. I have used SWOT (strengths, weaknesses, opportunities and threats) as a framework with great success.
- Have a good cross section of business people on the board, someone that understands marketing, accounting and operations.
- Do not treat this as a social event. You need this board to help you move faster, safer and more profitably.
I speak from personal experience when I vote yes to a board of advisors. When I get a smart group of people in a room all talking about my business and challenging me in ways I never would have thought about, my business gets better fast.