Your Business Needs An Advisory Board!
As good as I think I am, I can't think of everything. The fact is, that no one has all the best ideas or the right ideas. The one thing I believe I lacked more than anything during the foundation and growth of my own business was what some call an “Advisory Board.” Your "advisors" are basically resources for you and your business, that meet with you a few times a year.
This is a business group. This is not a group of pals or drinking buddies. This is not your wife friends, or well-meaning relatives. This is a group of business people who might have a good understanding of you and your business. They bring some expertise and differing perspectives to the table. It should also include at least a couple of customers who are loyal customers. While there are some similarities, this is NOT a board of directors, and does not function as one.
Not suprisingly, there are a few obstacles in creating an advisory board.
- Finding people who will take a couple hours out of their busy lives to help you for free.
- Getting everyone together at one time for a meeting.
- Finding people who will truly add something to the group.
Don't Underestimate Customer Contributions
If you're a retailer, I believe that a most important part of any advisory board would be to have a few people that are true target customers of your business. In fact, if you've been in business for a number of years, possibly half of your group should be good and valued customers. Who better as a sounding board than independent consumers whom you are trying to appeal to? In her book “The Bear Necessities of Business”, Maxine Clark. CEO of Build-A-Bear, indicates that she has a "customer" advisory board that is made up of children (in part, whose ages vary between 6 and 18 years old). According to her they give great feedback and ideas and often keep her business from making expensive mistakes when it comes to product, accessories and merchandising.
I would consider that that the earlier you can begin your advisory board in the establishment and formation of your business, the better you will be able to adapt and fit your business to the specific wants and needs of your customers. Another part of your advisory board might be a couple of people who have a vested interest in the success of your business. It might be an investor or your banker, financial advisor, and/or your attorney. These people can be invaluable in terms of issues like taxes, credit, loans, and even possible contacts for other problems or issues. They would also have a more complete understanding of what you’re all about. A marketing or advertising person could be another nice addition. Also, don’t under estimate or ignore the wisdom of successful and retired businesspeople who still are on top of what’s going on in the world. These are people that they have more time for being available to you.
A Few Great Reasons To Have An Advisory Board
1. They our your personal sounding board or focus group!
Advisory Boards become your own personal sounding board for finding good ideas and sifting through bad ideas, not to mention helping solve some significant problems.
These 6-8 informed individuals should be able to give you a fresh and independent perspective (which you need). They can even be your company "focus group" in some ways. They can also help alert you to warning signs or changing trends, as these people may have already dealt with one of your problems in their business life, and may keep you from making the same mistakes.
2. Gain A Possible Mentor
Depending on their experience and wisdom, some of these people can become your mentors. They can not only be encouraging and positive, they may sometimes be good teachers.
3. Gain Valuable Expertise
You can end up with some expertise you could never afford as a small business owner. Depending on who agrees to help, you might end up with some professional help you could never afford to pay for. Even collectively as a group, you should end up with some pretty good advice!
4. Connections & Contacts
The members of your advisory board can help you make connections and get recommended professional service or contractors if or when you need them. The more diverse your advisors are, the more different experiences and contacts you may have access to. Many new business owners have discovered that if you’ve been able to pull a group of experienced and respected advisors together, your advisory board can actually help build credibility, respect and open up new access or opportunities for additional business! Their connections in effect, become your connections, and may lead to additional sales. After all, the people who are willing to join your advisory board do want you to succeed, and as a result they will be interested in helping you with connections.
5. It’s Like Your Own Board Of Directors With Some Of The Pluses And None Of The Minuses.
While your advisory board and a board of directors are not the same thing, they do share some advantages. For one, your board members are free, and they can only advise you. They have no real say in what you decide to do. They are not legally, directors of your business. You also aren’t required to tell them anything you don’t want them to know (unlike a board of directors). There are no legal requirements or laws covering what is done in these less formal meetings.
Some Guidelines To Consider For Your Group:
- Consider rotating some of the membership of the group so that the group and the opinions stay fresh. Two to three years is not a bad number for an advisor term, especially for any members who came from your store’s customers.You may want to let them know of the temporary nature of their participation from the very beginning, so there are no hard feelings! You might also want to consider staggering these terms so that there are always some experienced members, as well as some fresh faces coming and going.
- Do NOT pay your group for their help and make it clear upfront that you cannot afford to pay for their time. The idea, is for your advisory board to serve you and your business for free. Hopefully they feel honored at the request! You don’t want decisions or recommendations from the group based on the promise of some side income, or any benefits for that matter. As a show of appreciation, you may still want to give back in return for their time and service. It may be in the form of a discount or gift you provide all members. You can offer a complimentary lunch or breakfast depending on where or when you meet. You should also reimburse any Advisors for out-of-pocket travel expenses, (like mileage) if you have a member(s) who come from a distance. Parking fees can also be paid, if applicable. Just remember, you really want people who enjoy participating because of their value, input and creativity, not because of what’s in it for them. It just should not cost them anything to help you (other than time).
- Again, it is not a bad idea to have a few people that are the real target customers of your business. More importantly, you want at least some of your people to be business owners. Your attorney and accountant are good people to try and recruit. I’m not talking about someone who just prepares taxes. I’m talking hopefully, about a CPA. After all, you certainly want someone who is familiar with finances, especially if this is a weakness of yours.
- Consider holding your advisory meetings no more than three-four times a year. You don’t want to burn your group out by demanding too much of their free time, with regular monthly meetings. Besides, it’s too hard to get everyone together. The more often the meeting, the more likely you are to get into the minutia of your business, and you don’t need or even want a group trying to micromanage your business. You’re looking for feedback and advice on the big picture. In lieu of too many meetings, there’s also nothing wrong with keeping in touch with your group via e-mail or phone, for any quickly needed, specific feedback or advice.
- If you are concerned about the type of information covered at these meetings, you might consider having a non-compete agreement for your members to sign.
- Ask people to join who are not afraid of expressing their opinions and wisdom. You don’t want a bunch of “yes” men! You want advisors who are opinionated and can help you and guide you. Obviously, they should be people you know and respect. They should also be people who know you and are at least somewhat familiar with your business.
- You certainly want people who share your values. You should also try to find people who complement your strengths, and whose expertise is in different areas from your own.
ADVICE ON THE MEETINGS THEMSELVES
- If you want 8-10 people at a given meeting, you may want to consider having 12 or more members serving at any one time.
- Hold your meetings in a professional environment where you can have some privacy. A bar or your business is not where you want to be. A restaurant where you could get a private room would be OK, or see if your accountant or banker could help provide a room. Many banks even provide their customers free meeting rooms as a service to their customers.
- During your first meeting and anytime a new member joins, you may want to have each person introduce themselves and give a little background about themselves. A good idea during introductions might also be to add just what you think they bring to the table in terms of advice.
- Always have an agenda as well as a firm meeting time. You should also hold the meeting to a firm ending time, and then honor it. After all you are imposing on the time of volunteers.
- Explain at any given meeting just what it is that you want or need from the group. What do you want to accomplish? Is this a brainstorming session? Are we considering a new product niche, or are we considering a new location?
- Since most meetings become a form of brainstorming, try to address one topic at a time and give each member a chance to voice an opinion.
- Make sure that all ideas are given attention and written down without your comments. You do NOT want to be shooting down ideas as fast as they come, as you may end up stifling and limiting contributions. Nothing should be rejected out of hand. Members want to feel valued! Besides, one mediocre or even poor idea may generate a new idea that will work. In addition, many rotten ideas just need to be re-tweaked and upon re-visitng the idea, they may not actually be so bad after all!
- Before ending any meeting, ask each member of the group to voice any concerns or impressions they have about the business currently, or to make a statement about any aspect of the business that is on their mind.
- Consider posting names and pictures of your advisory panel on your website. Their names and the connections they have can only help!
You are not going to like everything your group says to you. You can’t take it personally. Remember, this is business. You need to be like a turtle and let any criticism run off your back like rainwater. Take all the information in, and then take a look at it later, and then hopefully, make a more informed and unemotional decision.
Remember that these are people you chose for a reason. Give them a chance and listen to them, even when it’s hard to do so. Their job is to help you find ways to improve your business and become more profitable. At a minimum, their job is to help you avoid pitfalls and potential losses. There should really be no other motivation for them. Listen to them all. You will most likely see a real improvement in sales and profitability if you will sincerely listen with an open mind. After all, six or eight heads are better than one!