Finding Entrepreneurial Success With Advisory Boards
Startup survival and entrepreneurial success are the product of hard work, grit, and a supportive group of highly qualified advisors. Advisory boards are a key element for business growth and strategic decision making. Advisory boards fall under a different category than their larger corporate counterparts. “A board of advisors gives advice leaving legal control in the hands of the owner(s),” says Forbes. Generally speaking, advisory boards do exactly what their name implies, they advise. Unfortunately, many entrepreneurs are hesitant to enlist the help of advisory boards for fear that they may lose control over key decision making and overall control of the company. That’s not the case with advisory boards.
Company owners have the option to take the advice from their board and implement the suggestions or continue on their own path. “One of the smartest growth initiatives a business owner can implement is an advisory board: a hand-selected group of advisors that believe in your leadership, are aligned with your culture and mission and are committed to your success,” says Inc. If a company works hard to procure a diverse professional group of highly invested stakeholders to form advisory boards, the trajectory of a company is far greater than walking the road to success alone.
When Do You Need an Advisory Board?
According to Entrepreneur, there are 2 schools of thought as to when companies are ready to enlist the help of advisory boards. “The first recommends putting in the initial work to have a solid business before reaching out for advice,” says Entrepreneur. “This group prioritizes having revenue and a team to reference when asking the board questions.” The second school of thought regarding advisory boards recommends acquiring those advisors from the inception of the company.
Forming an advisory board to help build the business is the most ideal path. “The list of questions is endless: Is there a market for this? What’s the best way to test the market? How should the business be structured? Bouncing ideas off of a board early on helps an entrepreneur make sense of these questions,” continues Entrepreneur. However, no matter where an entrepreneur or business owner is in their path, they must also do what they feel is in the best interest of their business. It is also a good idea to enlist the help of advisory boards when a particular goal is above the abilities of the company’s resources, when management needs more diverse skills, or when the team is struggling to move forward.
Building Advisory Boards
Before building advisory boards business owners should have their complete values, mission, and strategic plan in place. It’s important to have the foundational elements of the company established. It is also important to communicate the mission and future goals of the company to all prospective advisors.
Advisory boards are often made up of 3 to 5 members to create a voting majority. They should also include a highly diverse set of professionals that have had great success and some failures in the industry. “Failure is both inevitable and a fantastic teacher, so any prospective advisory who had failed in the past will have terrific input to offer your company,” says Bryce Welker CEO of Crush Empire. “In addition to having the ability to predict failure and help you avoid it, these individuals can also help your company survive if a large project fails.” One way to recruit the advisory board members you are looking for is to leverage existing connections and social media.
When approaching potential members for advisory boards with goals and expectations, business owners should start with established connections. “Approach an existing professional network first,” says Forbes. “Try to find members with experience achieving the goals you wish to accomplish.” This is also true for finding industry professionals in your field. Ajay Pattani, CEO, and founder of Perfect Seach Media, also found success with LinkedIn when recruiting members for their advisory board. “Our initial search was focused on individuals we had existing relationships with,” Pattani says. “Then, we continued the search for additional board members by leveraging our first advisory’s network to develop relationships with other potential advisors.” They used the professional social media platform to procure members who matched their core values, willing to donate time for just helping the company succeed, and matched their gender and racial diversity criteria.
Managing Advisory Boards
When enlisting the help of advisory boards it’s important to note that the business owners and founders are the presidents of the board itself. The owners are responsible for scheduling meetings, managing the board, and informing the board of important updates. There are many important key elements business owners should follow while managing advisory boards. Board portals like BoardBookit can also help to promote organization and collaboration.
Schedule: Oftentimes, the members on advisory boards are donating their extra time to help a business succeed. The owner must take the time to schedule meetings to help accomplish their goals. Advisory boards should meet quarterly or a few times per year. Determining meeting times in advance and sticking to a schedule is the best way to utilize time for both parties. Board portals like BoardBookit allow admins to poll their advisory boards for prospective meeting times, RSVP to upcoming meetings, and sync with their personal calendars.
Structure: Advisory boards are less formal than the governmental entities of boards of directors, but structured meetings can go a long way. The president should take attendance at all meetings and create an agenda to help with organization. Implementing a board portal can help with the organization and addressing all outlined objectives. Import existing meeting agendas into the BoardBookit platform or create a new one using a template. Also, store and access all documents securely instead of relying on costly and cumbersome paper copies.
Communication & Collaboration: Because advisory boards meet more infrequently than boards of directors, communication is key for events that occur in between meeting times. Enlisting the help of a board portal can also help with this task, especially when entrepreneurs are busy growing their business. BoardBookit allows admins to post updates, press releases, and announcements to users’ dashboards to keep their advisory board members updated. BoardBookit Discussions allows users to seamlessly collaborate on documents and upcoming agenda items in real time on all devices in between regularly scheduled meeting times.
Action: Entrepreneurs enlist advisory boards for their unbiased opinion and helpful advice. “When a board of advisors votes on a recommendation, it’s up to the owner to act on it,” says Forbes. Although the owner has the ultimate say on if the recommendation is executed, the board will take notice if the owner neglects to heed their advice. “Giving up a sense of control can be challenging, yet may be the key to expanding to the next level of growth,” continues Forbes.
Startup founders and entrepreneurs rarely find success alone. Enlisting the help of advisory boards is the key to welcome outside expertise from industry professionals further helping organizations grow and flourish.
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