HOW TO GET THE MOST OUT OF YOUR ADVISORY BOARD
When it comes to advisory boards, most entrepreneurs make the same mistake: they treat their advisory board like a business development board.
An advisory board provides non-binding, strategic advice to the management of a business. The operative word here is strategic. The people you choose for your advisory board should help you grow the company, make it more profitable, or both.
Who Should Comprise your Advisory Board?
So many times entrepreneurs recruit professionals to their advisory board from big companies who were successful financially, but who have never grown a small business.
We can’t stress this enough: You want to have people on your board who have actually “been there, done that.” In other words, entrepreneurs who have started their own business, grown it, and have been successful at it.
You really need someone who understands how to grow a business from $500K in sales to a million; from 1 to 3 million; from 3 to 6 million; from 6 to 12 million, etc. You really need people who have lived it. Professionals who have worked in big companies bring experience and knowledge, too, but there is usually no lack of resources in a larger company. In a small company like yours, resources are always competing with each other. You need an advisory board that “gets” it.
If you are a business under $10 million, we recommend having three outside advisors on your board in addition to yourself:
- A CFO or controller. Because small businesses usually under-hire for their CFO or controller, a strong advisory board member can provide mentorship to this position.
- Someone who has been there done that
- Someone from your industry
Be very strategic about your advisory board positions. Identify the roles that would be best for your business, and then recruit people to those roles.