Having a board isn’t enough. Know how to use the members to maximum effect.
As you’ll soon find out (if you haven’t already), there’s no way one entrepreneur–you–has all the answers. Or all the skills. Or all of the time to single-handedly get your venture running smoothly.
If you want your business to expand, you’ll need the advice and foresight of people who have traveled that road before you–and done so successfully. You need a team. Usually, that comes in the form of outside advisors, like attorneys, accountants, bankers and insurance brokers. You may also have thought of forming an advisory board. Before you get started, be aware that advisory boards are not designed for stroking your ego. Your advisors aren’t cheerleaders; they’ll tell the truth about your business, good or bad.
However, if having access to “wisdom of the elders” has any value to you, here are five tips on using your advisory board effectively:
- Know why you need your board and how you want its members to help. If you’ve chosen your advisory board members carefully, you’re asking busy, successful people to carve even more time out of their schedule to help you. You’ll show your gratitude by providing clear guidelines about the assistance you’re looking for. For example, are you looking for help launching a specific product line or overall advice about business growth? Are you seeking insight into trends or particular aspects of your business? (If the latter, make sure to have a confidentiality agreement handy for them to sign.) Know what you need–you’ll then be able to better determine exactly whose expertise will benefit you.
- Determine the kind of commitment you’ll need. Once you figure out what you need, you’ll have a sense of the kind of commitment you’ll want your board members to make. Is this a short-term gig, ending with the product launch? A year-long commitment? Will you want the board members to meet regularly, or will other forms of communication suffice (such as a monthly coffee with individual members, or telephone/e-mail contact)? Bear in mind that if you want out-of-state members on your board, you’ll foot the travel expenses for regular, face-to-face board meetings.
- Give to get. If your advisory board members are giving generously of their time and expertise, give them something back. What’s the “something?” It may be as simple as paying for the swanky lunch you’ll have as you discuss business matters. It could be as involved as stock options. It could include access to other high-level people on your board (although two to three members are often sufficient for a smaller company). Whatever you choose–or your board members ask for–make that clear in your expectations of each other.
- Respect their time. Few experiences are more annoying than attending a poorly run meeting where the speaker is unprepared, rambles and drags matters on for an hour longer than expected. Don’t let that be you. Prepare in advance. Circulate an agenda well ahead of time. Make sure the meeting is facilitated well so that concrete action steps, deadlines and assignments result. Have someone take notes so that decisions and action steps can be recorded.
- Keep your board in the loop. People will agree to sit on your advisory board because they’re excited about your company prospects. They genuinely care about your success, even if the “tough love” can be hard to swallow. Keep in touch with them between meetings. They’ll want to hear from you–and to help you if a problem arises. Let them know what’s going on so that the agenda topics aren’t a complete surprise.
Your advisory board can serve as an especially valuable management resource. Members provide a useful mirror so that you can see your company as it really is (and not as you’ve glossed it over). As long as you look in that mirror with eyes wide open, you’ll be able to see the true possibilities for your business growth.
For more information about creating an advisory team, sign up for my Entrepreneur’s Business Law Primer, which includes an MP3 audio lesson on “How to Create an Advisory Team.”