One of the greatest assets you can have as a business owner/entrepreneur is an advisory board. Running a business is simply easier if you have some help from a group of trusted individuals dedicated to seeing you succeed. The “right” advisory board members provide access to your industry networks, target audience and financing resources. They impart invaluable guidance and advice to you. And the best part is that it costs very little.
When I recommend the formation of an advisory board, my clients often lament that it would be too expensive. My response is that advisory board candidates who focus on compensation probably are not the right candidates. Compensation initially can range from expenses to a modest stipend, to a few stock options.
The best candidates want to focus on “giving back.” They will have experience in your important niches and will be “hands on.” When they started their companies, they had mentors and advisors. They want to pay it forward and help strengthen your company.
Who should be on your advisory board? Here are my three “must have” profiles:
- Serial entrepreneur. A founder who has taken more than one company from a start-up through a successful sale or acquisition. They have “run” in the entrepreneur’s shoes. They have experienced business ups and downs and persevered with success. And their experience is related to your market.
- Serial CFO. A financial professional (not a numbers cruncher) who has been a CFO at more than one company from a start-up through a successful sale or acquisition. They “live” revenue models and understand different financing strategies. And they can provide appropriate financing contacts for your business.
- A Marketer familiar with your company’s target market. A professional who knows your market niche and can open doors to new customers and synergistic relationships; and in the long run develop strategic alliances.
Every major business decision you make can be enhanced and refined by your board of advisors. Start with just two or three advisors with extensive outside perspective. You can become more formal and sophisticated later with your advisory board, but make sure you have one!
The team you have created around you drives your success. A great CFO, COO or CMO is important. But a strong advisory board is invaluable.
© 2015-2020 David Paul Carter. All rights reserved. This article was published in Directors & Boards, Fourth Quarter 2015, Vol. 40 No. 1.