Advisory Boards

The Board of Directors of a company is its legal, governing body. In contrast, an Advisory Board does not have any legal, formal responsibilities. Rather, an Advisory Board is convened by the organization to provide advice, guidance, support and advocacy for the CEO.

By definition: An Advisory Board is a group of individuals who've been selected to help advise a business owner regarding any number of business issues, including marketing, sales, financing, expansion and so on.

No business is too small to benefit from having an Advisory Board and an Advisory Board is such a powerful management tool that no small business should be without one.

Think about the last time you met with other business people and had an open discussion, sharing your ideas and concerns. An Advisory Board is a formal version of this process.

Unlike a one-time or casual event, your Advisory Board is composed of people with a genuine interest in your business and a desire to see it do well. You can think of an Advisory Board as a management think tank. Your Advisory Board members will serve as a sounding board, a source of ideas and expertise - and give you honest advice.

More than anyone else, your Advisory Board will be on your side. They will be people with no axe to grind who want to listen to you and advise you. Above all, they want to contribute to your business's well-being.

Prepare to be on the lookout for board members on a continuing basis. You cannot expect to find the best individual if you are rushing to select who you would like to ask to serve on your board. A good tip is to look in your newspaper for people who are in the news and successful in their profession.

There are also many recently retired executives and managers who might be interested. Aim high. Choose people you admire that you think you will be able to develop a relationship of trust with. Don't be afraid to ask people who may seem to be out of your sphere to serve. There's no harm in asking, and you may be pleasantly surprised when they accept. At worst, they'll be flattered and say no.

Two to three people is sufficient for an Advisory Board for a small business. They will be expected to meet with you (usually every 6-8 weeks) to discuss and advise. While being an active part of your business is payment of a sort, you could also pay your Advisory Board members by hosting a lunch each meeting, or by paying each Advisory Board member an honorarium.

You will need to prepare for each meeting of your Advisory Board by preparing an agenda which you distribute to your Advisory Board members ahead of time. (Include any related materials necessary.) Perhaps more difficult, you need to be prepared to be completely open and frank with your Advisory Board, sharing both your hopes and your fears. They won't be able to advise you properly or well if you hold back.

Resources

Putting Together a Great Advisory Board

How to Get the Best from your Advisory Board