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An Advisory Board Can Help You Get Through It
Thursday May 14, 2009
Because an advisory board provides a pool of knowledge and expertise, it can be a real help in steering your small business through tough economic times. Besides acting as a sounding board for your plans and setting objectives, an advisory board can also help you develop new strategies. To make it easier to get your own advisory board up and running, I've put together these resources:
Agenda for Your First Advisory Board Meeting So choose the people you want to be on your advisory board and approach them. Remember, the worst they can do is say "No" - and you may be pleasantly surprised when they don't. HOW TO HARNESS No business is too small to benefit from having an Advisory Board and an Advisory Board is such a powerful management tool that no small business should be without one. Think about the last time you met with other business people and had a open discussion, sharing your ideas and concerns. An Advisory Board is a formal version of this process. Unlike a one-time or casual event, your Advisory Board is composed of people with a genuine interest in your business and a desire to see it do well. As I said in External Management Resources In The Business Plan, you can think of an Advisory Board as a management think tank. Your Advisory Board members will serve as a sounding board, a source of ideas and expertise - and give you honest advice. More than anyone else, your Advisory Board will be on your side. They will be people with no axe to grind who want to listen to you and advise you. Above all, they'll want to contribute to your business's well-being. Where, you might wonder, would you find such paragons? Just look around you. There are many recently retired executives and managers who might be interested. Other business people and vendors may also be good choices. Aim high. Choose people you admire that you think you will be able to develop a relationship of trust with. There's no harm in asking, and you may be pleasantly surprised when they accept. Two to three people is sufficient for an Advisory Board for a small business. They will be expected to meet with you (usually on a quarterly basis) to discuss and advise. While being an active part of your business is payment of a sort, you should also pay your Advisory Board members by hosting an upscale lunch each meeting, or by paying each Advisory Board member an honorarium each time. You will also need to prepare for each meeting of your Advisory Board by preparing an agenda which you'll need to distribute to your Advisory Board members ahead of time. (Include any related materials necessary.) Perhaps more difficult, you need to be prepared to be completely open and frank with your Advisory Board, sharing both your hopes and your fears. They won't be able to advise you properly or well if you hold back. An Advisory Board is an especially valuable management resource for small businesses. No single person can know everything, and ad hoc, on the fly advice can be worse than none. An Advisory Board that meets regularly gets to know you and your business and can provide the management expertise you need to avoid shoals of mistakes and set your business on a true course.
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How to Harness the Power of an Advisory Board How to Persuade People to Serve on Your Advisory Board Sample Advisory Board Invitation Letter
It can lay out exactly what prospects want to know without taking up too much of their time. Compensation might take the form of: • • • • Providing food and drink during and before or after an advisory board meeting (lunch or dinner) Covering expenses Cash – an honorarium or a fee paid per meeting Stock options The most common form of compensation is probably some combination of the above. Don't forget to mention that you will follow up soon with a phone call and give your contact information in case he or she has any questions in the meantime. the responsibility of the advisors and the time commitment expected (how often the board will meet and for how long). Since writing that article. In closing. Creating an advisory board. Some board members will be more valuable than others and you don’t have to compensate them all the same. Chances are good the people you’d like to have on your board are already busy people! Besides laying out the benefits.In Harness the Power of an Advisory Board I say that advisory boards are such a powerful management tool that no small business should be without one and describe creating an advisory board. After all. As much as possible. restate why you think the person would be a great addition to the board and what specific contribution he or she could make. your advisory board invitation letter also needs to include: • • • a brief overview of the company. These are what your advisory board invitation needs to focus on. You don't need to put together a huge package of materials to try and persuade someone that serving on your small business advisory board would be a good thing. It's only human nature for a prospective advisory board member to want to know what he or she gets out of the bargain. . I've received a fair bit of mail asking for more details. When you're creating your advisory board and trying to persuade people to serve. Intrinsic benefits might include: • • • • • Extending their circle of contacts and perhaps developing new business Getting new perspectives and ideas Contributing to the development of a particular profession or industry Discovering new potential customers or allies Personal satisfaction of helping to steer a company to success Prestige or resume building The main external benefit is compensation and how you will compensate the prospective board member has to be part of your pitch as well. the advisory board's mandate and focus. the writers agree. So once you've chosen prospective members for your small business advisory board. the next step to creating an advisory board is to craft invitations that focus on the benefits of serving on your board. So think carefully about each of the prospective advisory board members you have chosen and decide what each one would view as the best or most important benefits for serving on your board.but how do you persuade people to serve on your small business advisory board? The key is to remember your basic rule of selling and focus on how they will benefit by serving on your advisory board rather than how you will benefit. try to personalize your advisory board invitation by emphasizing the benefits that might appeal most to that particular individual. A single sales letter is a much better approach. don't be afraid to up the ante for particular prospects. you want their time and expertise. is a great idea .
There may also be some follow-up questions/discussions my email. ranging from dataprocessing through graphics design. You can reach me by phone at (phone number) or via email at (email address).short and direct) I'm pleased to invite you to become a member of the (company name) Business Advisory Board for 2008-09. Specific goals for this year include developing a niche market strategy and revamping/updating the company's Web presence.'s Business Advisory Board is to provide management advice about the direction the company should follow.'s Business Advisory Board. (Advisory board's mandate and focus .) (*Use bullet points if you have more than 2 benefits. the better the advice your advisory board will produce. Consider It Done Ltd. being a member of Consider It Done's Business Advisory Board provides you with a stellar opportunity to continue to shape the VA industry. I will be in touch with you soon but in the meantime. Example letter – Feel free to customize this sample business invitation letter and use it to invite people to serve on your own small business advisory board. Consider It Done Ltd. Because of the nature of the matters to be discussed. Sincerely. you want to select "the brightest and best" with a diverse range of skills and experience. (Details . I will certainly cover any expenses you incur from attending advisory board meetings and also offer a $500 honorarium to be paid directly to you or to a charity of your choice. each meeting consisting of a dinner and following two hour discussion. So don't be afraid to ask people who may seem to be out of your sphere to serve. provides a spectrum of business services to clients. My company.What are the responsibilities of board members?) The Business Advisory Board will meet three times this year. (Pitch .. needs new direction.Describe what your company does.What are the advisory board’s goals?) The main purpose of the Consider It Done Ltd. We continue to focus on filling our clients' needs completely and fully.) As one of the pioneers of the Virtual Assistant Industry. now has three full-time employees and a host of part-time contract workers. The worst thing that will happen is that they will say "No". the more experienced and knowledgeable your board members. . (Overview of the Company .What are the benefits to this advisory board member?) (*Don't forget to customize this section of the business invitation letter for the particular person you're inviting. our company motto is "We'll do it right". A person with your experience and insight would be the perfect person to help me determine whether my company should break new ground or whether there's still value to be gleaned from traditional territory. see Creating an Advisory Board. I’m available to discuss any questions you may have.) Operating since 2002. First started as a one-woman operation run from a basement.You may find it easier to use this sample advisory board invitation letter as a template. Consider It Done Ltd. Obviously. Last advice: You already know that when you're creating an advisory board. Your company letterhead (Prospective Board Member's Name and Address) (Date) Dear (Board Member's Name): (Introduction . Rejection costs nothing. members will need to sign a confidentiality agreement. (Close and thank you) Thank you for taking the time to read this letter and to consider being a part of Consider It Done Ltd.
when forming a board you need to understand its purpose. Many consist solely of interested outsiders. with an eye to the big picture. You want members to be problem solvers who are quick studies. Advisory boards can also be made up of customers and prospects who provide insights into product development and marketing issues. 1. Here are ten rules of thumb to follow when building an effective advisory board.http://www. expertise and experience. have introductions made or build repeat customers. meeting monthly or more. They can help you enter new businesses and look at your own operations with an open mind. They provide timely knowledge about trends and competitors. Choose the Right People: Of course. What all such boards share is this: They advise.stengelsolutions.com/print/how_5066439_set-up-advisory-board. as well as identifying upcoming political. seek new strategic positions. In general. legislative and regulatory developments.com/tips19. Unlike corporate boards. but a good number include investors as well.html Ten Tips Advisory Board . industries or issues such as adopting new technology or going global. Determine the Objective of Your Advisory Board: Advisory boards can be general in scope or targeted to specific markets. 2.htm You don’t need to navigate unfamiliar waters alone. but you also need to know what specific skills to seek.ehow. have strong communications skills and are open minded. Put together a good board of advisers. look for diverse skills. gauge future trends. evaluate and play devil’s advocate. even getting involved in the daily grind. Some are hands-on. and you’ll create a powerful asset that can make a huge difference when you need to get objective advice. scout the marketplace. Others meet quarterly. advisory boards have no fiduciary responsibility and their advice is non-binding.(Your signature) Name Title http://www. .
If the advisory board is going to discuss issues that include private information. so don’t be offended if you hear things you don’t like. 6. but not always: Getting a heavyweight on your board of advisers can give you credibility. He or she should be result-oriented. Choose a site that is comfortable and free of distractions.. encourage members to tell you about their mistakes so you can avoid making the same ones. Compensate Your Advisory Board: Depending on whom you are asking and how involved you need them to be. responsibilities and term of office. and follow it with an action plan. Run the session as you would any professional meeting. It will also expand their own networks and provide them with a way of giving back. The facilitator should know which experts to draw out and how to stimulate a dialogue. The minutes should be written up and circulated to top management. you should lay down the ground rules about what is expected in terms of time. Keep in mind that your members will likely benefit themselves in a variety of ways. but it’s also important to have members who are going to spend the time to give you thoughtful advice or are well connected and willing to make introductions. Careful thought should be given to developing the agenda and managing the meeting. 5. Being on your board will expose them to ideas and perspectives they may have otherwise missed.Big names can be a bonus . Consider Alternative Feedback Methods: Getting the entire board together on a regular basis may not be possible. Set Expectations: When inviting a prospective member to join your advisory board. If appropriate. Solicit input for the agenda. meet or have conference calls with specific members about topics relevant to their . You can learn a lot by finding out what other people did wrong. Ask for Honesty: An advisory board must be open and frank. Your board will also suggest ways of correcting the problems they identify. 3. members should be notified that they will be asked to sign a confidentiality agreement. 7. compensation can vary from just providing food to covering expenses to stock options to cash payments to a combination of the four.. and distribute important information ahead of time. Get the Most Out of Advisory Board Meetings: Prepare for meetings well in advance. Instead. as ideas without action aren't worth much. The notes should include recommendations on key issues. 4. Specify the areas in which you’re seeking help.
E-mail is a great way to reach everyone and have them respond to you at their convenience. Keep Board Members Informed: Once they’re on the board. Remember that these people are evangelists for the company. Ask yourself. advisers can be replaced without a lot of legal headaches. keep members excited about your business by giving them updates at times when you aren't soliciting their advice. a business executive is so close to an issue. 10. so keeping up-todate will help them be of greater value to you. She can be reached at 212-362-3088 or E-mail . a business strategist. 8. But remember: This isn’t a corporate board. get rid of him or her. 9. Listen to what the board says. you can’t see the forest for the trees. “Does this work for my company? Am I comfortable with that?” Then make a decision. Fire Bad Board Members: If you realize you’ve made a bad choice. so you don't have to do everything they suggest. Unlike a board of directors. Prepared by: Geri Stengel. Sometimes.expertise as needed. president of Stengel Solutions. The fact that they've agreed to be on your board means they care about your company. Respect your Board's Contributions: Don't abuse or waste their time.