Creating a Business Advisory Board for Family-owned and Closely-held Businesses
May 06, 2019
Advisory boards are one of the most cost-effective and powerful ways to drive a family-owned or closely-held business to success. Advisory boards can add significant experience and knowledge to a business. Understandably, many boards have a mixed reputation and therefore business owners may be hesitant to invest the necessary time and energy to develop an effective board. To help understand the importance of an advisory board, a business must first understand how to optimize opportunities and drive performance through a successful relationship with an advisory board.
A board should be chosen for their interest in your business as well as their knowledge and their expertise. This video covers the four things that you can do to ensure your board helps increase the value of your business.
0:14 But today we’re going to talk about the four things that you can do to ensure your board is there to help you to increase the value of your business to make sure you can leave the legacy behind that’s important to you. So what are those four things?
0:30 Number 1. Always start an advisory board process with a strategic plan in place. Why else would you invite people to give you some advice if it’s not to help you reach the strategic potential that your business is capable of? So you want to start out with some sort of a plan. Some goals, dreams, the vision about what you think your business can achieve.
0:52 Number 2. Identify people that can help you. Not because they’re your best friend or your neighbor, not your attorney, not even your CPA. Nope. The people you want on your advisory board need to be hand- picked because they have the skills, the knowledge, the background and the experience to help you reach those strategic goals. So, for example, if you want to maybe move into an export market, but in your business you don’t have a lot of export experience, you’re going to invite somebody onto your board that has specific export experience. So always match the people on your advisory board with the strategic goals of your organization.
1:34 Then, that leads us to point number three. We know that strategic goals change as you begin to achieve them and the business starts to grow. That means your advisory board needs to change, too. Always invite your advisory board members for a short term. A year, maybe two. But no more than that. Invite them onto the board, make sure you’re all in agreement as to what the expectations of performance are for your advisory board members, heed their advice, use their advice to grow the business and at the end of that term, thank them profusely and let them roll off the board. If you still need them, you can always invite them back.
2:15 And that leads us to point number four. With your advisory board, you need to listen. You’ve heard that old adage- don’t buy a dog and do the barking yourself. When you have an advisory board, they’re there to serve a purpose. One of the most important things you can do is really listen to what they have to say. That doesn’t mean that you’re going to take all of their advice, it doesn’t mean you’re going to do everything that they say, but it’s important to make sure that they know that you value their contribution. Otherwise, why are they there? If you can do that, in my experience, advisory boards are one of the most powerful and cost-effective ways to drive your business to real success. Good luck!