Once you have created a small business advisory board, running this entity is a dynamic and strategic process that can be a game-changer for the growth of your business. By assembling a group of experienced professionals from diverse backgrounds, the advisory board becomes a valuable asset, offering expertise, insights, and guidance to business owners and entrepreneurs.
With a clear mission and well-defined roles, the board becomes a trusted and objective sounding board, providing strategic advice and helping navigate the complexities of running a small business. Through effective communication, collaboration and continuous improvement, running a small business advisory board can generate new ideas, build resilience and pave the way for long term success in today’s competitive world.
Now we need to understand what the objectives are for the advisory board and how it will operate to achieve those objectives.
Objectives of the Advisory Board
The business owner and the advisory board must know what is expected from the organization overall and from each individual member. For smaller businesses, advisory boards advise the business owner directly. For larger businesses, owners may create a structure to advise specific sub groups, such as marketing, sales, operations, finance, and so forth. Who is receiving the advice and counsel of the advisory board will determine the skills required of the members.
If you and the advisory board does not understand objectives and expectations, it will be a disorganized and ineffective undertaking. This will be frustrating, not only for the business owner, but for the board members alike.
If the business already has a formal board of directors, you need to be clear about the boundaries between activities and responsibilities of each entity. The advisory board provides guidance, but has no formal authority over decisions made. That authority rests with the business owner and the board of directors.
How Big Should an Advisory Board Be?
There is no right answer to this question. The advisory board must be the “right” size. You should create it with current, short term and long term goals of the business in mind. Company culture plays a role in selecting its members and the size of the advisory board. If the culture is more informal, the advisory board must work well within that culture. The opposite is also true.
An advisory board with too many members is a problem. There can be confusion about what information is required for it to be effective. It can also be confusing when trying to schedule meetings. It is often best to begin with one or two members and grow from there. The advisory board can grow as the business owner becomes more experienced in managing it. Group dynamics suggest a maximum size of eight.
How Often Should They Meet?
You recruit members for the advisory board because they have expertise you need for the business and most are involved in their own businesses. Schedule meetings well in advance and on a fixed schedule. Quarterly or semi-annual meetings work well. It all depends on what the advisory board is addressing. Make sure you schedule meetings far enough in advance so all members can attend.
Advisory board members are not involved in the business on a regular basis. They need to be given enough information prior to meetings to use the meeting time as effectively and efficiently as possible. Providing information in advance can make all the difference between a well-functioning advisory board and an ineffective one. If information is not provided beforehand, your meeting will waste a lot of time going over background details. Advisory boards can be most effective if given time to reflect and digest information about the issues at hand before providing feedback. Get confidentiality agreements executed and on file so sharing of confidential materials won’t be a roadblock to having an effective board.
Do You Need a Meeting Agenda?
Effective meetings require a well-thought-out agenda. The business owner should think about the biggest unanswered question or challenge facing the company, then base the next meeting on that.
Prepare and distribute the agenda in advance along with the background materials so the attendees can prepare for the meeting. Topics should focus on a few core strategic matters. That way you can have the right people at the meeting and keep the meetings productive. Managing the advisory board members’ time is key.
How Long Should Members Serve?
Recruiting advisory board members can be tough. But terminating members can be tougher. Setting the objectives of the advisory board will help with this situation. For example, you form an advisory board to address several specific issues in the business. Once those issues are resolved or well underway to being resolved, you should discuss a new set of issues and the resources needed. Brief the members on this at the beginning and it will make these transitions easier.
Do Advisory Board Members Get Compensation?
Advisory board members choose to serve for a variety of reasons. These reasons range from personal ties to direct compensation to equity in the business. It is entirely up to the business owner to determine how to appropriately compensate advisory board members to reflect the value anticipated from participation. No single formula exists, but the best way to calculate compensation is to base it on the anticipated benefit received from having an outside source to provide advice and counsel.
Advisory board members choose to serve for many reasons. These reasons range from personal ties to direct compensation to equity in the business. It’s up to the business owner to determine how to compensate advisory board members to reflect the value received from their participation. There is no one formula, but the best way to calculate compensation is to base it on the benefit received from having an outside source provide advice and counsel.
Don’t Go It Alone
Nobody can build a great business alone. It is a lonely job. The most common complaint from business owners is feeling isolated. But successfully operating a small business advisory board is a strategic investment that can pay big dividends for the growth and success of your business.
By tapping into the collective expertise and insights of experienced professionals, the board becomes a valuable resource for business owners and entrepreneurs. Through effective communication, collaboration, and a clear focus on the company’s goals, the advisory board can provide objective guidance and strategic recommendations.
This guidance helps navigate challenges, capitalize on opportunities, and make informed decisions. Operating a small business advisory board shows commitment to continuous improvement, adaptability, and long-term success. By leveraging the knowledge and connections of the board members, businesses can gain a competitive edge and thrive in today’s fast-changing marketplace. Ultimately, a well-run advisory board can serve as a key support pillar, accelerating the growth and resilience of a small business.
Debra Murphy is a marketing coach and consultant helping small businesses navigate the complex maze of online marketing. Experienced across all traditional marketing channels, Debra specializes in organic search and content marketing to help small businesses gain visibility and generate inbound leads. She is also a certified coach in the 90 Day Year® Peak Performance System. Debra regularly writes about small business marketing on her Masterful Marketing blog.
