What is a Board of Advisors? It's simply a group of people you maintain a special relationship with, who are able to and have agreed to give you advice on business. You alone must make the decisions. A wise leader, however, listens to counsel before making a decision. You don't have to have a formal name for your Board, or written rules, or anything. Unlike a corporate Board of Directors, there is no liability for the members of your Board and no duties to perform. It is just a resource for you to use as you need.
A good king makes the decisions,but only after listening to his ministers. A good CEO of a large corporation has regularly meetings with Department Heads, and gathers their input before making major decisions. You as an entrepreneur have less of a safety cushion than does a king or major CEO, so advice becomes even more important for you!
Entrepreneurs are a fiercely independent bunch, and necessarily so. Starting your own company is a big risk, a breaking of the dependence we had on a steady paycheck. It requires a tremendous amount of 'gumption,' faith in yourself, and an obsession about your idea. You have to be independent, willing to make it on your own, to make the break from being a wage slave.
Too much independence, however, can hurt the new business. One of the greatest hazards is proceeding without adequate knowledge. Too many entrepreneurs get in trouble because they fail to ask for help or get advice, until it's too late.
We all have weaknesses. You may have been the best electronics technician in the area, but running an electronics business requires a world of skills you may not have leaned. All of us have areas we are weak in. An Board of Advisors can help.
At the very least, consider each of your main business functions. You have got to market, so you need a marketing consultant or advisor. You'll be dealing with money, so an accounting and/or banking help is necessary. If you are producing an item, you'll want an advisor in the field of production. and so on. You'll also want to invite anybody you think is smart, especially those who have a head for business, to be on your Board of Advisors.
Arrange for the group to meet once a month. The easiest way I've found to do this is to buy lunch or dinner once a month. It will cost you some money, but it is money very well spent. The advice may keep you from making a costly mistake, or may propel you to more profits. It is probably tax deductible in any case.
Keep things informal. Allow some socializing, let everyone finish dinner - and then get up and make a very short presentation to the group. What you have done during the past month, what you are working on now, and what you want to have happen during the coming month. Ask for ideas, ask for resources, ask if anybody knows how to do something. Most people love giving advice. Realize that some of it will be bad, some will be good, but some will be 'right on,' saving or making you a lot of money. You are the boss, and have to weigh the advice and make the decisions.
Your lawyer, your accountant, your marketing person, your Internet guru, and your banker are of course likely candidates for your Board. Their advice, because they are familiar with your business situation, can be invaluable. You'll also want to invite others that you think are particularly good at business. If you know any retired entrepreneurs, putting them on your Board gives you a tremendous amount of experience. Employees and owners of other (non-competing) firms are fine. Include as many as you like - you won't get everyone to show up at any one meeting anyway.
How do you get people to be on your Board? Just ask! Most people are flattered when somebody seeks their advice. Explain in a friendly manner what you are looking for. You might even show them this article! A document signed by you that clearly releases them from any risk or liability may make some more willing to participate.
Any compensation for the Board should be informal. Of course, some will be happy just for the free meal, and you'll find the group quickly becomes valuable as a networking club for all the members. There is nothing saying you can't send a check from time to time with a note, saying something like "This is just to return a portion of what your good advice has brought my company. Thanks!" At the very least, send thank you letters. You want these "gurus" to stay!
It can also help if you are trying to go after a bigger project. List your Board of Advisors on your letterhead (with their permission, of course). Now it looks like you are a bigger, well connected, more capable bidder than just you as a one-person shop. It clearly demonstrates you are approaching your business in a very intelligent manner!
Advantages To You
The real value of this Board though is NOT the advice you'll get at the meeting. The real value is in the stream of leads and referrals you'll get after each meeting. The next day, these people go back to work in THEIR worlds, but as a member of your Board of Advisors, they feel responsible for you!! If you have a monthly meeting, I'd be surprised if it wasn't a shot in the arm monthly.- Additonal advantages:
- More information for decision making - you make the decisions, now you can do so wisely.
- Experienced advice - These folks have already graduated from the school of hard knocks.
- New points of view - Fresh perspectives may point to unseen opportunities and clear up misconceptions.
- Access to a wider realm of power contacts - Often it is not what you know, or who you know, but who those people know, that can help you when you need it most.
- Networking - Your Board WANTS you to succeed, and will help you out in a hundred different ways.
- Advantages To Board Members
- Prestige - Everybody enjoys having their opinions valued, and you can acknowledge the help in your literature, on your letterhead, and in your talks.
- Satisfaction - Many successful business people enjoy helping start-ups, and this allows them to do so more than just doling out money.
- Social - The old saying is that it is lonely at the top. Entrepreneurship can be lonely at times, and Board meetings can be welcome.
- Networking - There are professional networking clubs in many cities - what you have done is created your own! The accountant may start using the attorney who may use the Internet guru, etc.
- Money - These are not paid positions, but referral fees and "Thank You Bonus" checks are common.
- Opportunity - You may present a great opportunity to the Board members for investment, or the discussions might uncover opportunities that Board members can capitalize on.
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