Tammy Camp

Ascending the Achievement Ladder with an Advisory Board

Posted on 09. Jun, 2009 by Tammy Camp in Entrepreneurship

Are you going into business alone by the seat of your pants, trusting your own gut instincts and relying on no one else? That might not be the smartest strategy, at least according to a recent Forbes article. Regardless of your business’s overall size, “having a reliable group of advisers who can offer objective analysis and a few timely introductions can make all the difference,” the magazine asserts.

Before you defiantly stomp off muttering, “I went into business for myself so that I didn’t have to listen to someone else,” don’t get the wrong idea. The role of an advisory board is to mentor, not dictate. Think of them as a group of individuals who have already successfully walked the corporate tightrope and can now impart their wisdom to you—and help you avoid making the mistakes they made along the way.

Obviously, if your company is just starting out, a board of advisors can prove especially beneficial, but even established companies can leverage a board of advisors’ expertise to get them out of a rut. They can also help you navigate the complicated web of business regulations a company may be caught in.

So now that you’re convinced of the effectiveness of a board of advisors, how do you construct one of your own? The following are six strategies you can implement.

1. Start with the people “you know and trust,” advises Forbes. Consider what types of business advice you’ll be seeking from your board members. It never hurts to have a financial and/or legal professional you can call upon when necessary, so consider these types of experts as requisite additions. Once you’ve exhausted your inner circle, seek out professional associations, like your local Chamber of Commerce or Small Business Administration, for advice on rounding out your board.

2. Forget about nice round numbers. An odd number of board members will serve you well in the event that key issues are put to vote. And keep your membership small. Three to seven advisors should be sufficient.

3. It’s okay to name-drop; in fact, it’s advisable to place a recognizable name on your board. S/he will provide credibility to your business, which is “perhaps the greatest asset an advisor lends,” the magazine stresses.

4. Diversify your membership. Like a good stock portfolio, you’ll want board members who balance each other out in terms of their areas of expertise.

5. Expect to compensate your board members fairly, with the price tag growing as you grow. Although many will take on the role complimentarily, it’s nice to “offer some kind of compensation, if just enough to cover traveling costs to and from meetings.”

6. Don’t lock yourself in long term. Your needs will change as your business grows. Forbes recommends, “Set adviser term limits from 12 to 24 months so that you don’t have to deal with sudden, awkward dismissals.”

Have any questions on the benefits of an advisory board or want to share a thought? Drop a line below and let’s discuss.

Tags: Advisory Board, Entrepreneur, Entrepreneurship, Startup