The Advisory Board

To be competitive and profitable, your business needs to be hitting on all cylinders. I’ve yet to meet a business owner that is an expert in all areas of his business and few have the resources to hire the requisite experts or consultants.

When I say “hitting on all cylinders” I mean that your business is running like a well-oiled machine when it comes to design, machining, sales, marketing, human resources, accounting, finance, information technology, purchasing, inventory control, production control, etc. Even if you could be well versed in all of the areas I just mentioned, there is just not enough time in the day to keep up-to-date. Most CEOs are like me (at least I keep trying to convince myself that they are), and are really good at one or two particular areas and have limited expertise in the other areas required to run the business.

My advice is to form an advisory board for your company. This advisory board should be comprised of about four to five people with varying expertise that complements your weak points. For instance, if you are strong in design and machining, you may want to look for a marketer, finance person, information technology specialist and/or successful salesperson to join your advisory board. These people need not come from the industry or even fully understand your business. In fact, it is probably better if they are from a different industry, as they will bring a very fresh perspective and network of connections.

The people you are looking for may be in business for themselves, or they may be executives at larger companies or successful entrepreneurs who have taken early retirement. Using your personal network of friends and family you should be able to identify people that are successful in each of the areas you wish to add to your advisory board. Once you have identified the prospects, set up a lunch meeting and tell them about the exciting opportunity and how you would appreciate their help.

The benefits for the potential board members are numerous. They will consider it prestigious and an honor to be on an advisory board and they will put it on their resume and talk to their friends about it, which helps spread the word about your company. It also will give them an opportunity to grow and learn from the other board members as they participate and help them grow their network of contacts as they get cozy with the other advisory board members. If you are so inclined, you can offer some financial incentive to the members based on the company’s profitability.

The advisory board should meet quarterly at an off-site location for a half-day. At these meetings you should be prepared to talk openly and honestly about all aspects of your business. You should be prepared with real data and break it down by finance, operations, marketing, sales, technology issues and your strategy or vision for the future.

The team should set quarterly goals and report to the advisory board each quarter on how well the goals were met. You also should keep in contact at least monthly via e-mail or telephone to update them on any issues and ask for advice along the way. You will be pleasantly surprised at the input and wisdom your advisory board will give you and the input you get from them will be worth tens of thousands of dollars annually.

An advisory board is a low-cost, yet highly effective way to get a great deal of brain power thinking about the issues that face your company. It also will help you grow as a business owner or manager. I look forward to hearing from readers as they put this into practice and the value received from the board.