Our guest blog post comes from Nate Silverman, Principal at Silverman Consulting LLC and a certified Hot100 Advisor. The Hot100 Program is designed to help privately owned companies with one or two active owners, annual revenues of $500,000 to $50 million, and at least five employees to increase sales, profitability, and/or valuation (owner’s equity). Nate will be a participant in our January 20 panel discussion on Advisory Boards: Why You Need One and How To Start.
Many entrepreneurs start their own company because they want to be The Boss. They want to be the One in Charge. But, many soon realize that it is indeed lonely on top. They start to miss having someone to talk to. They start to feel like everyone at the company (their employees who they carefully recruited and selected) expects them to know all the answers. As the President, they are expected to help everyone else. After a while, many business owners long to talk to someone who wants to help them.
This is one of the primary roles of an advisory board – to help the owner or president learn, improve themselves and deal with ongoing business issues. A good advisory board should include a mix of people who have been there/done that and understand the challenges you will face growing your business and specialists who know more about certain topics or fields than you do. This includes legal, accounting, technology, human resources, etc.
Advisory boards can be formal, with set meeting dates throughout the year, or informal – individual mentors who agree to take your call or meet with you whenever you need to ask them specific questions. One of the benefits of having group meetings is to allow for the advisors to interact and debate. You may get more out of the discussion and conflicting viewpoints, but only if you are able to facilitate the meeting and keep on topic. In one advisory board I helped set up, we brought together the leading experts in the field for the first time ever. We had lively discussions that benefited everyone – primarily because we had questions that had never been asked before. It forced the advisors to talk with each other (which helped build stronger relationships between them) and elevated everyone’s understanding and appreciation for the goals of the company.
To maintain a successful advisory board, you need to make sure every meeting or discussion is mutually beneficial. Advisors may initially agree to be involved simply to help you or be a part of something new and exciting. But, that can wear off after a while. If they are helpful to you, you need to make sure they receive something back in return. This could be money or stock (i.e. payment), sneak peeks or special opportunities to use your product or service (i.e. privileges), new relationships (as in my example above), or even new opportunities for themselves (if your company will help create new markets or business for their companies). On the other hand, don’t be afraid to change advisors as your needs evolve over time.
An effective advisory board is a unique blend of experts who will help you be the best owner or president you can be to continue to grow your company. Develop and manage the group wisely.