We aren’t exaggerating when we say that having a small business advisory board can work magic for you. Our client Jack is proof. His business was plateauing, and his advisory board helped him turn things around. It is a form of delegation at the highest level, but with completely different results.
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No One Person Has All the Skills for Running a Business
Small business owners like Jack started their business to follow a dream. Jack’s dream was to be his own boss. Jack had been a successful attorney at a mid-sized law firm, but he was tired of the hours, rainmaking, and defending big businesses. He wanted something more meaningful out of life. So, he took the plunge and started out on his own.
Look, there was no doubt that Jack is a great lawyer, but Jack had no real training in business operation. But that’s okay, because he had skills of his own. Many successful businesses were started by people whose experience as an owner was limited. It’s tough to run a small business when you’re suddenly expected to wear all these different hats. Lots of people may have advice for you, but you might not necessarily know where to turn or who to trust. Jack was no different.
When we first met with him, he was frustrated and overwhelmed. Our first question to him was whether he thought we could practice law. He looked at us quizzically and said, “no, you haven’t passed the bar.” We had to smile at that, because he was right. Just like how we weren’t trained or experienced to be lawyers, he wasn’t prepared to run a business. This was Jack’s “light bulb” moment, as it were. Jack wasn’t just a business owner, he was a CEO. And he had to learn how to act like one.
Why an Advisory Board Was Right for Jack
Running a law firm is quite different than running other small businesses. There are restrictions and requirements that must be met, and that’s where specialists can be of use. The question is, how can you manage these experts cost-effectively? In this instance, we recommended an advisory board.
What is an advisory board?
An advisory board is a group of professionals with backgrounds in both necessary business disciplines and a specific industry. This group advises business owners on key strategic decisions regarding how to manage their business and help it grow. This differs from a board of directors because there is no obligation on the owner to follow or to act on this advice. Advisory boards are a great way to learn without ceding control. A smart business owner won’t ignore the advice, but he or she still retains full control of the decisions being made. Unlike simple delegation of tasks, this is delegation of ideas.
Benefits of an advisory board
The most obvious are:
- Perspective: challenges the owner to think differently or see the issue from various sides so he or she can make more informed decisions
- Creativity: the more people involved, the less likely the group will suffer from tunnel vision
- Connections: to be successful long-term, you need to have the right skills in place to get the job done.
- Accountability: when running your own shop, there’s no one there to help keep you focused and on-track
- Sounding Board: Having others around can help you find better solutions by sharing them with the group.
The Dos and Do Nots of Advisory Boards
There are some clear dos and don’ts when it comes to setting up a board. Much like finding the right talent for your small business, it is important to find the right mentors and peers that can help you. So, here is our advice
- …focus on expertise in the field but also vision for the future
- …seek diverse opinions – you don’t have to like everyone, but you do need to respect their knowledge
- … prove your decision-making authority and ensure everyone agrees the process.
- …use family or friends. Unless you can have a frank and honest debate with the people in your life, avoid them even if they have expertise in the areas needed. If they think the relationship is at risk, they will likely hold back.
- …pick myopic experts. You want people who know their field, but also those who can see a bigger picture.
What We Did with Jack
We knew enough about Jack’s business so we could identify the knowledge gaps. We had some of the experience required, but he needed some additional experts. To help, we sourced experts from our network. We provided the names to Jack and helped him interview potential board members. Each board member was compensated for their time on an hourly basis, just like any employee. We set up monthly advisory boards at the start, and switched to quarterly once the business was in a better position and once Jack didn’t need to turn to his board for every decision he didn’t want to make himself.
The board consisted of 6 members, including a ProStrategix consultant and Jack himself. It is important to keep the board size to a manageable number. Enough to have the right expertise, but not too much to get bogged down in endless debate. Jack was struggling when we met him, and after 6 months, he was on a solid pathway to growth and expansion.
What if You Can’t Afford Jack’s Board
There are free ways to set up an advisory board. SCORE can help you. If you go this route, know that you are dependent on their volunteer base, which may not be exactly what you need. If you can’t afford the approach we took for Jack, it’s not a bad fall back option.
At ProStrategix, we know you have concerns. We’re designed to help give you the business support you need so you can focus on doing what you love. If you would like to learn about how we might be able to help you, please contact us.