Author: Dave Lavinsky
They say it’s lonely at the top. And for most business owners, this is particularly true. While employees often spend time talking with co-workers about issues, business owners often have no one with whom they can discuss key items. Importantly, getting quality advise on certain issues can have a dramatic impact on your bottom line.
A great way to overcome this challenge is to form an Advisory Board. An Advisory Board is a group of Advisors who help you grow your business. Below are answers to key questions most business owners have about Advisory Boards.
Why should I form an Advisory Board? The right advisors can add a lot of value to your business. In many cases they have faced and/or overcome the same challenges that you currently face. They can act as a great sounding board for your ideas and give you new ones. Some Advisors can even introduce you to key customers, partners, vendors or investors.
Who should be on my Advisory Board? Choose your board members based on your needs. For example, if your key need is getting investors, choose board members who have great investor networks. If you need industry connections, find a seasoned industry executive. Other business owners, executives and service professionals (e.g., lawyers, accountants, consultants, etc.) often make the best advisors.
How many people should be on my Advisory Board? I have found the best results with Boards having four to eight members. Any more and it’s too hard to get everyone’s thoughts and opinions during a meeting. Any less and you often have two few viewpoints and relationships that can be leveraged.
How should I compensate my Advisory Board members? Advisory Board members, unlike Board of Director members, generally do not require compensation. However, to get the most value from them, I suggest paying them with options that vest annually; this gives them a vested interest in your company’s success.
How can I get the most value from my Advisory Board? Start by circulating your business plan to board members so they better understand your business objectives and goals. Then schedule regular in-person meetings with your Board either monthly, bi-monthly or quarterly. Correspond with them via email at least monthly to let them know your results and challenges and to solicit feedback. Set up calls with individual Board members as needed to help solve specific challenges for which they have unique insight, connections and/or experience.
There’s no need to “go it alone” as a business owner. Particularly when there are people out there that can dramatically improve your success. Importantly, these people are not walking around thinking “I wonder what companies I can advise.” Rather, you need to identify them, contact them, and convince them that you and your company are worth their time. And once you do, you’ll see your business soar.
Author Bio
Dave Lavinsky is a serial entrepreneur and the president and founder of Growthink, which since 1999, has helped hundreds of thousands of entrepreneurs create business plans and grow their companies. Dave is also the founder of BusinessPlanTemplate.com which provides business plan templates for a wide range of industries.