Starting a new business can be lonely work – especially if you’re an office of one, as many start-ups are. Employees of established businesses have the benefit of managers and colleagues to bounce ideas off and seek input from, and can assemble teams to tackle complex issues. In contrast, business founders are often faced with make-or-break decisions about a range of issues that lie beyond their skills, experience or capabilities.
This situation often leads to a sense of isolation, which can result in a loss of confidence or an aversion to decision making – both of which are potentially catastrophic for early-stage companies.
One practical solution is to establish a board of advisors – a group of trusted individuals whose experience, background, and perspectives will complement your knowledge and skills. In addition to bringing established industry networks, credibility and (in many cases) public profile, when employed effectively, advisory boards provide the sort of grounding and frank feedback that will benefit all business owners.
Steps to establish a board of advisors
- Establish your business objectives
As your business objectives change, so too will the types of advisors you require. Perhaps you need help raising capital. Maybe you need additional insight into customer requirements. Possibly you need assistance in negotiating a major deal, or restructuring your operations. List two or three major business objectives that you would like to achieve in your business in the next 12 months.
- Determine your ideal advisor profiles
Having decided your key objectives, create a check-list of the types of skills, qualifications and experience your advisors should possess. Be as specific as possible, and don’t be afraid to be demanding (it is better to set your sights high than low, although you may need to compromise on some points).
- Articulate your expectations
Summarise the nature of the relationship you seek to have with your advisors, including the proposed frequency of contact, form of contact (e.g. formal meetings, coffee chat etc.), and any specific obligations of the advisors (e.g. reviewing product plans for marketing proposals). Be mindful that busy professionals are often time-poor, so set realistic targets as to how much of their time you would like them to commit. It may be wiser to suggest brief meetings initially (say, 15 minutes every other month), with a view to increasing contact time as the relationship matures.
- Identify potential advisors
Sit down with your friends, colleagues and other members of your network and ask for their recommendations concerning potential advisors who match your profiles and other criteria. Where possible, ask them to organise an introduction.
- Pitch and close – Your pitch to would-be advisors must be succinct and to the point, providing a compelling answer to the question of ‘What’s in it for me?’ Unless you have scope to offer a meaningful fee, you should emphasise the’soft’ benefits of being involved. Articulate some of the challenges you are seeking assistance with, why you have approached them, and how they could benefit in helping you find solutions. If you are not in a position to offer payment, be upfront about it, but be prepared to canvass other remuneration options (including equity).
Once you have established your advisory board, be sure to maintain open lines of communication. The onus is upon you to organise meetings, prepare agendas or discussion papers, and to track and report on action-items. Be sure to tailor your communications to each advisor; for example, don’t email if he or she prefers telephone conversations, and don’t prepare lengthy memos if he or she prefers brief one-on-one presentations.
Most advisory boards have between six and ten members, as this provides scope for a good mix of skills and backgrounds, while remaining a manageable size to ensure quality of communications and relationships.
It is up to you to determine how to best leverage the diverse range of qualifications you now have at your disposal. Choose a process that fits best with your management style and needs, but not before asking the board members themselves how they would prefer to work with you.
Mark Neely is a lawyer, technology commercialisation consultant and author of 10 books, including The Business Internet Companion. mpn [at] infolution.com.au