Businesses owners constantly adapt as they look for ways to achieve their goals. When making tough decisions, it helps to have a group of trusted experts to advise them.
If you don’t have financial expertise, but you want to pursue a growth opportunity next year, how do you know how much cash your business will need? Who can you turn to for strategic thinking?
One option is to create an advisory board.
Advisory boards usually comprise three to five individuals whose business expertise and experiences complement yours. You can meet with the group regularly (generally monthly), building relationships while your advisors learn about your business and offer advice to keep it in sync with today’s fast-paced realities.
You may be thinking, “I already get advice from my insurance agent, CPA, attorney, etc.” That’s true. But while occasional conversations will garner some advice, typically focused on a current issue or concern, it may not be sufficiently broad or strategic.
This article from the Australian Institute of Company Directors addresses the many benefits of an advisory board. Here are three:
1. You retain control
One benefit of having an advisory board (in contrast to a board of directors) is that you, and only you, remain accountable for moving your business forward. Advisors don’t make decisions—they offer recommendations based on their expertise and experience.
The power always remains in your hands.
2. Conversational setting
The richest advisory board sessions are conversational, open, discussions about your business goals and concerns. There’s no need to invoke Robert’s Rules of Order or conduct the meeting in a dark-paneled corporate board room. Meetings can be held over lunch on a deck with a view, and the agenda is what you need it to be.
Your advisors can help you challenge assumptions and make better decisions. They’re most helpful when they aren’t shy about asking the tough questions you need to answer to move your business forward.
So, being open and direct yields the best feedback. Hemming, hawing, or holding back on your plans or goals won’t benefit you. Your advisors can’t help you make the best decisions if you can’t or won’t share all the details they need for informed suggestions.
3. You choose your advisors
In deciding who to invite onto your advisory board, ask yourself what expertise and perspectives would be most valuable, what values matter most to you and your business, and what personality types you enjoy working with.
Your advisor board should reflect those qualities. They also should believe in you and want you to succeed.
Creating an advisory board is an exceptional way to invest in your business, because it complements and extends your current management team, especially if you’re a lone manager.
If you still have doubts, check out this Business Development Bank of Canada study, which shows that small- and medium-sized businesses with advisory boards financially outperform those that don’t.