In our world of enhanced governance and accountability to investors and lenders, but also in an ultra- competitive environment, start-ups are looking for an edge.
Have you thought about adding an advisory board to your business? We all know that consultants, accountants, lawyers and business advisors are expensive for a small business, and most often it is not possible to keep them on retainer full time.
The benefits can be tremendous, but you need to choose your advisors carefully.
What can they do for you?
They can help you identify and plan for risks that impact your business. The sage advice you get from a seasoned business person, preferably from your own industry sector, or one with similar challenges, can help you avoid some of the common risks start-ups encounter.
They can make important introductions. In start-up mode, the connections you make are often as important as the product you are selling. You’ll need introductions that connect you to financiers, supply and distribution channels, credible sources that will endorse your product, and experts who can assist if you are required to move through regulatory hoops.
They can mentor and guide the CEO. Start-up companies are often led by start-up CEO’s. If your company hasn’t attracted a seasoned business person to lead the company, the advisory board can help you by mentoring and assisting the CEO to make good business decisions. Their ability to assess risk, recognize opportunity and then to capitalize on that opportunity can be invaluable to a CEO in a start-up.
A few things to keep in mind as you assemble your advisory board.
Keep the group small, but with diverse backgrounds. You’ll find that the diversity gives you a strong foundation of information on which to base your decisions.
Make sure that the expectations for your advisory board members are clear. You don’t want them involved in the day-to-day operation of your business: they are advisory, not operational. Make it clear what your expectations are, and set the meeting agenda to address only the issues where you require their guidance. It is important to ask specific questions and to ensure that each of your advisory board members can contribute in a meaningful way at each meeting. Remember that they are not there to listen to you; you are there to hear what they have to say. While they will require some background information on the issues, distribute that ahead of time so you can use their time to the best advantage.
Pay your advisory board members a small amount for each meeting they attend. The gesture recognizes that you consider their participation valuable, and their time is important to you. The amount doesn’t have to be large – in some cases, just a few hundred dollars per meeting. When you think about the advice and guidance you’ll receive, you’ll soon recognize that it is a small price to pay.
Advisory boards can give you the competitive edge you need. Get started today.
Susan Milburn is Vice President and Branch Manager for Raymond James Ltd.