If some of the largest companies in the world have them, why don’t you? Many entrepreneurs ignore or discount the value to their business of a formal advisory group. Perhaps there is a reluctance to ask outsiders for help, or the effort to create and maintain a group prevents an owner from taking the first steps.
On closer examination, however, an advisory group can be one of your greatest assets and most cost-efficient methods for long-term success.
Whether your business is operated as a corporation, partnership or sole proprietorship, it will need to use and rely upon professional advisors from time to time. These important ongoing relationships may be with accountants, lawyers, insurance agents, financial advisors or other experts. In the ordinary course, you pay for their professional services. These same trusted individuals may also be appropriate for a separate advisory board. Consider this: if such individuals accept your invitation to join, you will have regular access to their particular skills, experiences and insights, combined with an already intimate knowledge of you and your business, often for the bargain price of a breakfast or lunch (or some other relatively small form of compensation).
In addition to people with whom you have close business relationships, there are other natural candidates. This list can include industry and community leaders, retired executives, deep-thinking personal friends or cutting-edge colleagues. And don’t forget to look in your own backyard: you may want to include a family member or top employee, particularly if that person is a part of your succession plan. The primary goal is to develop a core group of qualified supporters from various backgrounds in which you may have little direct experience. As well, they must be available to meet, on a reasonable “as-needed” basis, in a mutually convenient location or manner (including e-mail) where ideas can be exchanged and discussed.
The role of the advisors can be as broad or as narrow as you require. The group may provide you with the chance to analyze certain strategies, obtain opinions about how to deal with troublesome situations or disputes, or you can simply listen to their experiences in planning business and personal affairs.
Most importantly, once the task of setting up the advisory board is completed, you must diligently organize each gathering, formal or informal, ensure that an agenda is circulated in advance, and carefully monitor the progress of each meeting and obtain feedback from group members. You may also need to change or refine the make-up of your handpicked group, on occasion, to keep things fresh or to replace inactive participants.
Another advantage of an advisory group is the networking opportunities that are created. Bringing together individuals on a regular basis may generate and develop new financial opportunities and unexpected introductions to new clients, suppliers and business associates – or lead you to their key advisors. In fact, an advisory board initially created for your own purposes, may evolve into a workshop or think-tank for everyone’s benefit. Once a level of trust is established, the parties will seek to discuss, and resolve, their own particular problems while sharing the secrets of their success.
It can take several attempts to create an effective working group. Nevertheless, in an age when it is increasingly difficult for private companies to attract directors to their Boards (due, in large part, to the burden of statutory liabilities), the less imposing forum of an advisory board represents a very practical and appealing option. If properly managed, the knowledge and experience of a committed group will help round out your management team. It will also enhance the prospects for profit and growth in both your business and yourself.