How to create an advisory board for your business
Many remarkable entrepreneurs, including Warren Buffet, Sheryl Sandberg, and Richard Branson, have credited their success, in part, to the advice of their mentors.
An advisory board is an informal group of mentors whose collective business expertise—and objectivity—can help you make better, more informed decisions, thereby accelerating growth.
Unlike business consultants (whose fees may well exceed your budget), advisory board members often agree to provide advice for free. They may agree to help in exchange for a small stipend, a meal, or reimbursement of travel expenses.
These tips will help you create a first rate advisory board that can immediately help improve your bottom line.
Selecting advisory board members
When deciding who you’d like to join your advisory board, think first of your purpose—the goals you most need to accomplish. Then consider your own strengths and weaknesses as an entrepreneur.
If you want your board to serve in a general business development capacity you’ll want a legal advisor, accountant, marketing expert, and business owner from outside your industry who can meet on an ongoing basis.
You may also want to bring together an advisory board for a very specific purpose; to solve a problem or achieve a short-term goal. In that case, you’ll be looking for advisers with expertise in that particular area. They will also meet on the understanding that once your goal is achieved the group will dissolve.
Tips for finding advisors
It’s ideal to have between three to five advisers serving on your board. They should fill any critical knowledge gaps and be able to offer key business insights.
When looking for advisers, start with your own business network. These include any organisations or associations you belong to, your local business community, previous employers and colleagues.
LinkedIn can help you discover new connections in your area through your business groups as well as the network of people you already know.
Another option is to ask the business professionals you work with if they can suggest any good candidates for your advisory group. You could ask your accountant, lawyer, or financial adviser for suggestions.
Get the most out of each meeting
Plan to meet with your advisory board regularly—at least every quarter. If you meet any infrequently than every few months you’ll risk losing focus and momentum.
Between meetings it’s wise to send along relevant interim reports to keep your group informed and engaged. Likewise you’ll want to distribute any relevant documentation in advance of each meeting to generate more productive discussions. These may include business plans, financial statements, and other reports.
Although advisory meetings can be quite informal, drafting an agenda can save time and help maintain focus when your advisory board gets together.
Final thoughts
Working with an advisory board can yield some appealing side benefits. The preparation required before a meeting may help keep you thinking analytically about your business. The responsibility of facing your board members will encourage you to keep striving toward your goals.
Your board’s network of connections can also be an advantage when you’re looking for capital, partners, vendors, experts—or even new customers.
A small business with an advisory board may also be less risky for potential lenders. It is reassuring that a business owner isn’t making all the key decisions on her own.