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There’s nothing better than being passionate about your business, but sometimes you can get too close. So it’s really pays to take a step back and get an independent expert opinion.
This is why it’s a great idea to establish an advisory board – a select group of “independent” people who can help guide your decision-making, drive growth and help solve business issues that you haven’t experienced before.
Typical members of an advisory board can include: marketers, entrepreneurs, financial and legal skillsets, and industry experts. The number of members and the structure is totally dependent on your business’ requirements at the time, but in general an advisory board meets monthly or bi-monthly.
An advisory board could be useful in a variety of scenarios, and help you answer business goals and questions such as:
Growth – Can I grow profit without volume? How will competitors respond?
Operations – How can I make my people more effective?
Financing and structuring – Are my structures optimised for a future sale?
Exits – What should be fixed before the sale process begins?
Having sat on several advisory boards myself, and having one for my own business, one of my major regrets in business has been not having one earlier. I thought I couldn’t afford it or wasn’t big enough for one, both which have been remedied through implementing my advisory board.
Some of the benefits of an advisory board I have seen first hand include:
A flexible sounding board
Unlike a board of directors, advisory boards are not regulated under the Corporations Act or corporate governance codes and can therefore be flexible in how they’re structured and managed. Advisory boards purely advise and do not make decisions like a formal board.
However, while you can be flexible about some things, it’s best to be formal about what is expected from the advisor, including terms of time, responsibilities, and compensation. A formal agreement can detail what is expected from all parties and with clear expectations will most likely create a longer-term relationship.
Objective viewpoints from expert
The beauty of an advisory board is it can develop ideas that can sometimes only come with distance from the day-to-day operations. You can gain from the skills and knowledge from the advisors who have practical experience, who have been-there-done-that.
This is why selecting the right advisory board is paramount. You should aim to get a mix of expertise, be it someone with business acumen to a marketing and advertising guru, depending on your needs.
Some questions to get you started on your search include: “What are the blind spots in my business that I need help with?” “What expertise do I need now and into the future?” “What are my audacious goals for the business?”
Create a learning culture
The role of the advisory board will evolve over time, but it will definitely create a culture of learning for your business while creating a safe place to discuss issues of major significance. The expertise from the advisory board members can become a fantastic resource for management, which they can tap into when needed.
It is a confidential space that you can discuss areas of concern that you wouldn’t necessarily do with your management team, with a mindset of co-creating a solution. There are some resources available online to help you get started in setting up an advisory board. From my experience, the sooner you start the more sustainable and profitable your business will be.