5 Best Practices When Bringing on and Working With Advisors
Whether your business is just starting out or you are trying to take it to the next level, having a board can help. Whether your board has formal fiduciary responsibilities to stockholders through directorship or is structured as an advisory board, you need to know how you utilize these advisors.
Here are a few ways to help your advisors help you to be a success:
1. Be clear on your expectations.
What is it that you want your advisors to assist you with? It could be help with raising capital (through direct contacts or credibility), strategic advice, marketing and PR, product development, business development, sales or a whole host of other connections and areas. You just need to know and communicate your expectations.
Many of the companies that I have been an advisor to have found the most value in using me as a sounding board to keep them on track. That is an underrated value of having someone who can provide that discipline on your board.
You should know your needs before you go out seeking an advisor, just like you should know your job requirements before seeking and hiring a candidate. While you may run into someone who is so fantastic that you just want them involved in your business, it’s likely going to be the most helpful to you to have that list to check a potential advisor’s skills against.
Also, it can be tempting to add cachet to your company by adding big name individuals as advisors. However, if these bigwigs don’t do anything for your business, they will end up being a waste of space on paper.
2. Have diversity in your advisors.
Your business will benefit from having advisors that don’t all have the same skills or share demographics. If your board is comprised of people of all the same age, sex, industry background, etc., you are missing a huge opportunity to expand the benefits that advisors bring. Having diverse advisors will expose you to a wider array of connections and thinking.
3. Ask for the help.
I always tell those that want to engage me as an advisor that I am always available to help, but they have to ask. First, I don’t know the daily goings-on in the company, so I won’t know what issues are most pressing without being told.
Also, I, like almost any other potential advisor, am very busy. There are multiple things on my mind at one time. If you want something done, ask and be specific in your request. The onus is on you, not the advisor, to find a way for him or her to be helpful.
I would also suggest that you schedule regular check-in meetings via phone, Skype or in person. This is usually a practice with formal boards, not necessarily with advisory boards. This makes sure that you, as an entrepreneur, don’t forget to utilize the advisors as you get caught up in the day-to-day fire drills of the business.
4. Be responsive.
If you ask for assistance and the advisor wants to help, be responsive. I have had far too many entrepreneurs ask for my help, only to find that when I requested something specific, such as a piece of collateral required for me to bring my contacts and expertise to bear, they never got back in touch (or perhaps took too much time).
Advisors can be helpful, but you need to fulfill your part of the bargain. You have a responsibility to follow through on any tasks required to help your advisor help you and the business.
Even worse are the entrepreneurs who ask for help and then bounce to the next person for advice without following through on the work the first advisor has done. It is not fair to send an advisor on a wild goose chase or have him or her invest time in one direction for you to get bored, fall off the face of the earth and then ask a new person a new set of initiatives. You will not only lose any potential benefits that can be gained through the advice, but you will earn a bad reputation.
5. Give them a “vested” interest.
Many advisors love to give back to entrepreneurs, but being an advisor is both a commitment and an opportunity cost, even if that cost is that they just can’t be on another board. So consider giving an equity stake so that the advisor has a vested interest in participating in the success of the company.
However, the second part of that is to make that equity interest “vest” -- or be earned over time. As many flaky entrepreneurs as there are, there are also flaky advisors. Have a trial period to test out working together and if you both see value, have that extra incentive available.
Carol Roth is the creator of the Future File™ legacy planning system, a “recovering” investment banker, business advisor, entrepreneur and best-selling author. She is also a reality TV show judge, media contributor and host of Microsoft’s Office Small Business Academy. A small business expert, Roth has worked with companies of all sizes on everything from strategy to content creation and marketing to raising capital. She’s been a public company director and invests in mid-stage companies, as well.