How to Develop a Small Business Advisory Board
A small business advisory board is a group of selected individuals, you personally know or possibly admire, willing to share their experience and industry knowledge to help your business grow and thrive. An advisory board, which has no authority over your business, can be a valuable asset by providing guidance, feedback and resources.
- Define Your Expectations
Are you looking for someone to help you increase sales or get more involved in social networking? Develop an overview that defines your short-term goals and targeted business needs in key areas like sales, marketing, technology, or human resources. An advisory board size typically ranges from two to five members depending on your needs and the size of your business. Consider what questions a potential board member may ask and include your response. Determine how you plan to evaluate feedback and how you will decide whether or not to implement recommendations. How do you expect the board to impact your business over the course of a year? Will you establish a term limit? How often will you meet? Where will you meet? How will you remove a member that isn’t productive or active? Defining expectations in the beginning can help improve productivity.
- Figure Out Compensation
Will you offer an honorarium? If so how much and will they receive it before or after their service? If you select an advisor from another state, decide how you expect them to participate in meetings. Do you need them to physically attend meetings or can members participate through a conference call or webinar. Determine what expenses you will cover – travel, housing, cell phone, long distance phone calls, copies and faxes, auto rental, meals – before they sign on to be a board member.
- Identify a Potential Board Member
Using the overview of your needs and expectations; identify potential board members who have knowledge and expertise in those key areas. Look at your current contacts, including family, friends, professional networks, and other small business owners to identify potential members. Look at the diversity – age, race, gender, sexual orientation – and consider if you might be losing out on potential markets because you don’t have access to certain communities? Compile a list of people and narrow down the list by evaluating the potential member’s experience, expertise, professional network, and contacts. It doesn’t serve you well to select someone with limited experience or a small professional network.
- Plan a Meeting
Be completely transparent. Describe your current business strategy and describe the direction you would like to go without sharing proprietary information. Ask them about their availability and possible conflict of interest. Listen carefully to their response to determine their level of interest and passion. Are they a good communicator? Are they excited or overly critical? Even if they don’t say what you want to hear, do you see value in their views? You don’t need a board that only agrees with what you think or say.Make sure your board member understands the level of commitment you expect. Provide a clear understanding of the member’s responsibilities, compensation, meeting frequency, and any other expectations. Inform your board how often, when, and where you plan on meeting. Laying everything out in the beginning will prevent problems down the road.
- Protect Your Business
Before the board meets, ask each member to sign a non-disclosure agreement and a non-compete agreement. If you need help creating a document, consult with a business attorney. It may be awkward to ask someone to sign but let them know that you want to avoid any potential conflict and explain that by signing you are being a responsible business owner and protecting your business. Do not work with anyone that declines to sign.