Do your revenues continue to grow year after year, you’ve NO management or employee problems, and you’ve got it all down. If this is you, then you probably move on now. But if you’re like most companies, then you should have an advisory board.
There are 4 types of advisory boards:
First, a customer focused advisory board consisting of your most strategic customers.
Form a board of your most strategic customers and invite them to offer perspective concerning your products competitors or industry trends. It’s intended to build a relationship with the customers or segments that will most directly impact the future of your company.
Second, a general advisory board consisting of select people who are qualified to evaluate your specific business model. These outside experts should be drawn from various business disciplines such as finance, marketing, sales, legal, operations, or other business disciplines to provide direction and much needed reality checks as you plan your business strategies. It’s ideal for businesses who need and outside highly knowledgeable viewpoint.
Third, industry specific advisory board consisting of influencers in the industry who assemble to discuss the critical issues facing the entire industry, including lobbying efforts. This may include key suppliers, functional specialists journalists analysts and academics. This group can be instrumental in bringing outside understanding of the industry developed thought leadership and define industry standards.
A fourth type is a hybrid board that selects members that are customers, industry-specific, and general specific business expertise.
“Why should you have an advisory board for the organization that you lead?”
An advisory board makes you as the leader, stronger. A well-functioning advisory board strengthens the management teams’ weaknesses and brings value to any organization.
From banking and private equity perspectives, you are more likely to obtain a loan or investment if you and your management team are well-advised. You will use funding more appropriately. When you go to sell your company, then you will make more money since the suitor can better see how to transition the organization.
It’s important to note that an advisory board is not the same as a board of directors. A board of directors is a legal distinction between those that advise and those that own and govern. An advisor simply offers advice. A board member is legally responsible for the organization for matters of corporate governance and is compensated for those responsibilities accordingly.
If you choose to build your own board, then here are a few tips: Aim high with your board candidates and create your dream team! Choose persons that have successfully done what you are about to do to the extent that you can. Use networking resources, industry associations, business groups, LinkedIn, and referrals to find board members.
If you need help with your board plan or get stuck, then reach out to John McAdam, a hands-on private business advisor for business owners with 10 or more employees that want to double their revenue. Reach him at john@pioneerbusinessventures.com and tell him you found him though Our Expert Insights.