For business owners, an advisory board can provide extraordinary insights and guidance. Here are four tips to form and maintain an effective advisory board.
Recruit the Best
Many successful people want to give back and are interested in being involved in emerging businesses. So don’t be afraid to aim high regarding whom you ask. Network with business peers and recruit respected and successful individuals. Look for diversity in experience, culture and thinking. These are some possible experience areas to seek:
- Finance – Banker or large corporate chief financial officer
- Mergers and acquisitions (M&A) – Investment banker or M&A attorney
- Government and policy – State or regional chamber
- Sales and marketing – Executive
- Specialty – Services or technology
Organize Productive Meetings
You’ve got the best and the brightest, so you need to respect their time and efforts. Distribute financials and other detailed information in advance of your meeting.
Limit meetings to 90 minutes, and provide a detailed agenda and theme. Start and end meetings on time. Come prepared with information and knowledge on your business. The meetings will force you to examine your business from a high-level vantage point—an added benefit to quarterly board meetings.
While it’s natural to want to make a good impression, remember that your advisors are there to help you solve problems and seize opportunities. It’s good to share your accomplishments, but if that’s all you talk about, they won’t be able to help you figure out how to advance your business.
Get down to the serious business issues. Lay all of your cards on the table and be honest about the challenges, frustrations and missteps you’ve faced. These professionals are successful because they’ve been there, too, and know how to overcome risk and problems. They’ll recognize you as a strong leader if you’re willing to expose the worst, seek counsel and then act on suggestions for improvement.
Top business and community leaders are highly compensated in their fields, and your board members aren’t on your advisory board for the money. They’re there to make a difference and give back. Their satisfaction comes from being involved. That said, be demonstrative in your appreciation. Introduce them to others as “my board member.” Bestow the title of board of directors. If you can afford it, offer a stipend of $1,000 to $1,500 per meeting. Consider inviting them to a post-meeting dinner—you’ll be surprised at the stream of suggestions that flow in a casual setting.
For more information, contact David or your trusted BKD advisor.