Our guest blog post this week comes from David Heyting, Senior Tax Manager at Hersman Serles Almond PLLC. David has worked in both the public and private sector counseling business owners on tax compliance, tax planning, job costing, and business expansion and succession planning.
When starting out, business owners realize that they need to be very knowledgeable – experts even – in their own industries or professions. However what they may not be aware of is that, they also need to be lawyers, accountants, human resource managers, bankers, counselors, IT engineers, and on and on. The list of things that business owners need to know and understand in order to succeed is endless. The problem is that we are all only given 24 hours in the day! Not to mention that the business owner still has to actually run the business. This is where leveraging is important. By forming an advisory board, a business owner can fill the gaps by using the talents and resources of a carefully chosen group of professionals. They do not need to be an experts in all areas, but can rely upon others to help them deal with issues that fall outside of their knowledge base. It goes along with the old saying that two heads are better than one. The business owners now have several knowledgeable people working to address issues facing their company.
“It’s not about what you know, it’s about whom you know” is a common business phrase that we all have heard. The reality of the matter is that it is true! A business advisory board helps to provide a business with a huge resource pool. Often times the solution to a problem is more about knowing the right person or company to fix the problem than understanding all of the ins and outs of the problem. Business owners who use advisory boards will quickly find that often times their advisors have already dealt with the same issue and have a solution to the problem. Having a larger resource pool through an advisory board is an enormous asset to a business. That is a reason why large companies seek high powered individuals to be on their boards – not only do they want to use that persons vast knowledge, but they also want to benefit from the connections and resources that person brings to the table.
Along with a resource pool, advisory boards help to provide collaboration. Typically most decisions that impact a business affect multiple facets of a business. Business deacons are made all the time that have unexpected, inadvertent consequences. Sometimes it can take years for these issues to arise and when they do they can be large issues. The advisory board helps to eliminate these types of problems by bringing multiple viewpoints to the forefront. Now in one meeting a business owner can look at all sides of decisions. Nobody ever wants to look back and say, “I wish I would have run that by my CPA and not just my attorney” or visa-versa. Nothing is done in a vacuum and it is critical to make sure that decisions are made with full knowledge of its impact.
Business owners need to know what they know and know what they don’t know. It is important to not only understand their strengths, but to also recognize they cannot possibly be experts in everything. Therefore use of an advisory board is essential to meet the needs of a successful business and its owner.