Updated January 1, 1 . AmFam Team
What if you had a team of experts at your disposal who were committed to seeing your business earn more, do more, and be more? Achieving such a notion is not only possible, but it can be a game-changer in your company’s growth.
For entrepreneurs who want to kick their business and their bottom line up a notch, an advisory board can help. This group of independent experts offers everything from business insights about marketing plans to recommendations about new talent for your pipeline. If your company is in expansion mode heading into the new year, it’s a smart move to consider.
Here, Jackie Nagel, a small business strategist and president of coaching firm Synnovatia (Opens in a new tab) in Los Angeles, offers some guidelines on setting up an advisory board to help your company grow.
Why do small business owners need an advisory board?
These days, business ownership is complex. And while advancements in technology are designed to help us become more efficient, small businesses are overwhelmed by the options, especially when we talk about scaling. An advisory team can cut through that noise and help entrepreneurs make better strategic decisions.
During the planning phase, what should small business owners keep in mind?
The most important question is: What am I trying to accomplish that I am not able to do on my own or through other means such as a mentor, coach, or the small business development center. It’s critical to decide why this is the right time to implement an advisory board. While some are looking to scale or improve their sales model, others are in need of new funding channels.
What types of experts should a small business owner include on an advisory panel?
In general, it’s good to have an accountant, an attorney, a marketing strategist, a human resources expert, a skills facilitator to organize the planning sessions, and an administrative assistant who can take notes during the meeting. But I’d also recommend hiring a business strategist because we have clear ideas on business trends, what’s happening in the economy, and which strategies create competitive advantage.
When structuring an advisory board, how many people is ideal?
I would say seven to ten because anything more than that is too cumbersome.
Are there certain people to avoid including on an advisory board?
Great question! A good friend or someone’s Mom are two examples that come to mind. If the person doesn’t have a background in business, they’re not necessarily going to be a good contributor to the growth of your company.
Also, beware of choosing people who lack original thought. It’s easy to regurgitate something you read in a book or in the latest study. Choose leaders who think for themselves because it shows that they possess critical thinking skills.
What should board members expect from you as the entrepreneur?
The business owner should provide a proposed agenda and include the length of the term and what’s required outside of the regular meetings (such as reviewing documents, introducing the business owner to their network, or providing feedback on various aspects of the business).
When and where are advisory board meetings typically held?
It depends on where the business is located, but it’s a good idea to meet quarterly, whether in person or virtually. If you’re in a more rural area, the types of experts you will have available to you will be more limited than if you’re in Los Angeles. Being open to video conferencing is also a good idea.
Should board members expect compensation?
Yes, absolutely. These people are bringing their expertise to the table, which is extremely valuable. They should be compensated at their regular rate.
If you’re serious about putting together an advisory board and using that board to accomplish something, then it’s worth it to compensate them. Plus, their level of commitment will be that much greater.
How do small business owners recruit good prospects for their board?
Talk to business owners and professionals in your network. Say, “Listen, I’d like to start an advisory board. I’m looking for an accountant, but I don’t know anybody. Is there someone you would recommend?” That gives you a starting point for referrals.
A business advisory board can give entrepreneurs access to a wealth of knowledge and expertise that can open new doors of opportunity. But it’s important to set expectations about what you plan to get out of the alliance.
“The business owner needs to have a clear idea of what they are going to need from the board; otherwise, the business owner is wasting their time and the time of the experts,” Nagel says.
Want to learn more savvy business strategies? Take a look at our business resource center. And, one of the smartest business decisions you can make is being proactive about protection. Connect with an agent (Opens in a new tab) today to learn about customized coverage for your business.