I’ve talked a lot about the benefits of setting up a board of advisors for a business. As I mentioned last month, I believe it provides the life jacket your business needs to be successful!
But just as important as having a board of advisors, is setting it up correctly. If you don’t have the right planning and structure in place, you won’t get the full value - and you’ll likely waste time and money in the process.
A consultant who knows the ins and outs of setting up an advisory board can be instrumental to this process. Yes, it requires an investment by the business owner. But, it can help prevent many roadblocks along the way. In fact, it can mean the difference between the group’s success and failure - and avoid lots of frustration and disappointment.
When a client hires me to set up their new board of advisors for their business, here are a few of the biggest mistakes they avoid:
#1. Not Having a Clear Focus
An advisory board needs to have a ‘why’ that is understood by everyone on the board and reflects their commitment to the business. We accomplish this by first setting the proper mindset and expectations, and secondly, having enough conversations so that everyone is well educated in the business and the board’s mission. If they’re going to serve on our board, they need to be there for the right reasons with clear expectations for everyone.
#2: Not Having the Right Mix of Board Members
Your board should have about five members - but to fill those spots, you’ll want to do more than look to your closest friends. I believe there are three types of people you MUST have represented on your board:
- Someone who is loyal to you as the business owner and will always have your back (such as a spouse, close friend or colleague).
- A financial person who understands both the potential and the risks of the business.
- An industry expert who has relevant experience and a valuable network of people behind them.
- These board members should serve as long as it makes sense for them to - it’s not a life sentence. Over time, you might want to ask a member to leave or invite a new member to join. After all, your board should change as your business’ priorities change.
#3: Not Having a Proper Launch
Once you’ve put the work into organizing and creating your board, you need to have a launch plan in place that sets the pace and the expectations for the group. The first step is to pick a date for the first meeting and distribute an informational packet in advance that contains your nondisclosure agreement/non-compete as well as any additional information your members need prior to the meeting. Then, when that first meeting is held, you want to make sure it’s facilitated correctly - something that is very difficult for business owners to do themselves. When done well, this will draw out participation and help the group get accustomed to brainstorming and problem solving.
Part of having a proper launch is setting up the right cadence for future meetings. I suggest starting with monthly meetings for the first three months to help members get over the learning curve. This also gives members the opportunity to get to know each other. From there, the meetings can gradually get spaced out further.
Those first three meetings are crucial because they’ll help you know whether each member is right for the board. It also gives them an opportunity to self-select out of the board if they realize it’s not right for them.
Are you interested in setting up an advisory board? Or have you tried setting up a board in the past but didn’t get the results you wanted? I can help! I’ll hold your hand through the process to help you get it planned, organized, and launched. Then I can either help get you through the first meeting successfully and I will quietly bow out - or stay put and serve on your board if that's appropriate. The choice is yours, let me help you and do it with you.
If you’re ready to learn more, please reach out! I’m always happy to chat.