For time-strapped business owners, an advisory board can be a huge asset. Your board members can survey the market, your competition, legal and regulatory issues, and current trends and give you objective feedback.
Effective board members typically do more than offer their expertise and advice; they provide big-picture insights into your operations, from product or service development to your marketing plans.
Follow these steps to put together an advisory board that will help you take your strategic vision to the next level.
1. Assess whether you can manage the process. Advisory boards can be a tremendous help to your business; however, you will need to invest time in not only developing the group, but also maintaining the relationships. You will need to organize regular meetings and update members on how things are going. You’ll also want to make sure that you’re ready to hear their opinions — and put them to use toward improving your business. Otherwise, you’ll just waste everyone’s time.
2. Set expectations. What do you need? Are you looking for people who will increase your visibility and customer base? Or do you need advice and expertise on growing your business? Outline two or three short-term goals and at least one long-term goal for the advisory board. You also need to establish some ground rules for the group. For example: How often will you meet? Will you meet in person, via conference call or video chat, or simply connect via email? What topics are off-limits, if any?
3. Determine compensation. If you can’t pay your board members, consider offering stock options or profit sharing. Can’t do that either? Some experts are content with gaining exposure through your marketing channels, and others are just happy to lend their expertise to a growing business. Covering members’ travel expenses and meals is also a small way to thank people for their service. Whatever you decide to do, make sure that you are clear about compensation when you invite each professional to join the group.
4. Recruit members. Establish the target size of your advisory board early on, so that you don’t have to turn down any invitees. When reaching out to people, look for a diverse range of skills and experience. Name recognition isn’t everything: You need people with the knowledge and connections to advise you on your business. Mostly, you need experts who will willingly participate and be extremely honest with you.
Possible candidates include:
- current or former mentors
- co-workers from previous jobs
- representatives or connections from industry-based associations or groups
- partner organization members
- chamber of commerce members
- connections you make through business networking events
- LinkedIn contacts
Don’t invite family or friends to join your advisory board unless you are certain they can provide a frank and open assessment of your business without damaging your personal relationship.
A final note: If you report to a board of directors or work with an investment group, you may need to gain permission from those governing bodies before creating an advisory group. If you are drafting contracts, you’ll want to seek legal counsel to ensure that you are protected if a relationship with a board member ends.