5 Tips for Forming an Advisory Board
Behind all successful entrepreneurs are those special people they turn to for advice and expertise: their advisory board.
Unlike a board of directors, an advisory board doesn’t represent shareholders or have any decision-making authority. Rather, this group is composed of experienced professionals who are committed to your business growth. Their role is to help an entrepreneur identify and achieve his or her business objectives.
Forming an effective advisory board brings in fresh perspectives and ideas that can take your business to higher levels. Here are five tips to help form your own advisory board:
1. Identify your needs.
You may have specific individuals in mind for your advisory board based on your experience or relationship with them, respect for their achievements or sage advice they’ve provided in the past. The best advisory board is comprised of qualified advisors you can trust.
Advisors can also help fill any of your own knowledge gaps, so consider people who complement your abilities. Or seek advisors who can provide the distinct skills you’re lacking, whether that means marketing, sales or accounting.
2. Find the right people.
Most advisory boards are fairly small in size: Most are three to five members. Look for objective people who can tell you what you need to know, rather than what you want to hear. This means no “yes-men” or “yes-women” (which probably rules out most family members and close friends) or anyone with a vested financial interest in your business (such as your lawyer, accountant or employees). If you don’t already have candidates in mind, ask for recommendations from people in your network, especially from other entrepreneurs.
3. Invite people to join the team.
Once you’ve identified several candidates you want on your advisory board, invite them to join. Schedule a time to talk so you can learn more about each other; then simply ask them to become part of your team.
In addition, if one of your contacts or board members suggests someone who sounds like a potential fit, ask for an introduction and inquire why your contact thinks this person is a good fit. Your contact may have had a positive experience with this person relevant to your business' needs.
4. Host your first meeting.
Once you’ve assembled your dream advisory team, set up regular meetings. Ideally, meet in person at a location convenient for everyone. Perhaps you may even want to treat your group to lunch or dinner. Those members who can’t make the meeting or live outside of your area can call or Skype.
You may also want to hold a yearly conference, where you all meet in person. In this case, you’ll want to cover their travel and lodging expenses, because your advisory board members are vested in your success.
5. Get everyone on the same page.
In preparation for the kickoff meeting, create guidelines that outline your and your advisors’ responsibilities and obligations. Include items such as the frequency of future meetings, nondisclosure agreements (to ensure that your sensitive business information remains confidential) and term limits (to simplify the replacement of advisors should they be unable to fulfill their obligations). Send these guidelines to your advisers before the initial meeting so everyone knows what’s expected from the get-go.
Having trusted advisors keeps you engaged with your business in a way that just isn’t possible when you go it alone. It also prepares you to return the favor by serving on other entrepreneurs' advisory boards so you can help them the way others helped you.