If you are a small business owner or an entrepreneur planning on starting a new business, developing an outside Board of Advisors can be a very good move. There are a number of excellent reasons for putting together a small but committed Advisory Board that will benefit you and your company.
Why Have a Board of Advisors?
- They fill in the gaps. Most entrepreneurs do not have all of the skills necessary to launch and manage a successful business. And, most entrepreneurs are unable to hire a complete team or staff that will fill all those gaps. So recruit Advisors that have the skills or experiences that you and your team lack. For example, you may lack specific skills related to marketing or finance or doing business with the government.
- A Board of Advisors makes you look bigger than you really are. This may sound silly but for young companies, this is actually quite important. Your Advisory Board let’s potential or existing stakeholders and partners know that you are surrounding yourself with experienced, successful professionals that are available to help you along the way.
- Advisors can help make decisions. A Board of Advisors that’s doing its job can help you make better decisions. They’ll bring to bear their experiences, skills and resources to help you make the best decisions for your company. Did you ever hear the expression, “it can be very lonely at the top?” With a good Board, it can be far less lonely.
- Great Advisors usually come with great contacts. In most instances, your Advisors will be able to introduce you to new customers, investors, partners, and other important constituents that will help the business grow and prosper.
Frequently Asked Questions
- How many Advisors should I have on my Board? Anywhere from 2-5 is a good number, but this is completely dependent upon your company’s specific situation.
- How often should I meet with my Board of Advisors? Formally, your Board should meet no less than quarterly. Informally, you should meet with individual Advisors as often as needed.
- How much will I have to pay my Advisors? Your Advisors should want to be on your Board because of their commitment to you and your business. Compensation should be secondary. Many young companies compensate Advisors with very small stock grants. When it comes to cash, only pay what you can afford and pay it on a per meeting attended basis. In the early years, lunch or dinner a couple of times a year is often sufficient compensation.
- In what ways should I use my Advisors? Use them for feedback on important decisions, budget reviews, new hires, contacts, referrals, or anything else that will help your company grow and prosper.
Careful selection of a great Board of Advisors will pay many dividends for you and your company in both the short term and down the road.