TRAVERSE CITY — Everyone needs good advice when starting and running a small business — even those who have done it before.
Executive managers of large companies routinely consult highly experienced and respected advisors for unbiased feedback before making key decisions or implementing major changes.
Small business owners can benefit from the same type of guidance by forming an advisory board. Unlike a board of directors, an advisory board is an informal group that has no financial interest in your business. They simply provide knowledge, feedback, and experience that can help you think strategically and maximize your success.
When seeking advisors, it’s best to have a diverse range of perspectives and backgrounds. It may be an individual who’s mentored you in other areas of your life or someone you already have a business relationship with such as an attorney or accountant. Look for honesty, objectivity, specific knowledge outside your skill set, a good reputation in his/her field or community, and connections with networks that may be helpful to you.
Be careful about using family members as advisors. Their objectivity may be clouded by their relationship with you. Limit your advisory board to three to five members to minimize complexity and conflicting advice.
When inviting prospective members to serve on your advisory board, explain how you hope to benefit from their knowledge and be explicit regarding whether any kind of honorarium is involved. Many advisors are willing to give their time, but make expectations clear. And, don’t assume your advisory board members want to be “on call” whenever you need them. Be respectful of their time.
Ask advisors to sign a non-disclosure and/or non-competition agreement. This may sound excessive, but such documents are necessary to ensure the confidentiality of your discussions.
Consulting with advisors individually on occasion is fine, but the greatest benefits come from meeting as a group. Arrange periodic meetings and prepare an agenda that addresses priorities without being excessive. Be sure to include plenty of time for questions so the group can discuss issues and collaborate on ideas that may not have occurred to you.