Regardless of if you have a new start-up or a long-standing family business seeking to grow, having a board can help your business become more successful.
Whether your board is loosely structured as an advisory board or has a fiduciary responsibility to the business’s shareholders via a formal directorship, you need a plan of action to get the most out of your advisors.
Here are some key ways to help your advisors help your business to be a success:
1. Know your advisors’ competencies. Advisors can bring a bevy of benefits to companies, so know what you want and what will help you the most when seeking an advisor.
2. Set clear and realistic expectations. What is it you want your advisors to assist with? It could be help with raising capital (through direct contacts or credibility), strategic advice, marketing and PR, product development, business development, sales or a whole host of other connections and areas. Know and communicate your expectations.
Many of the companies I advised find the most value in using me as a sounding board and a check-in point to keep them on track. That is an underrated value of having someone who can provide discipline on your advisory board. On the flipside, don’t expect your advisor or board member to be running your business for you. That’s never their role.
3. Know what you are looking for. You should know your needs before you seek an advisor, just like you should know a job description before hiring a candidate. While you may run into someone who is so fantastic that you just want them involved in your business, it’s likely going to be most helpful to have a list to check a potential advisor’s skills against.
Also, it can be tempting to add cachet to your company by adding brand name individuals as advisors. However, if these big wigs don’t do anything for your business, they will end up being just a waste of space on paper.
4. Have diversity in your advisors. Your business will benefit from having advisors that don’t all have the same skills or demographics. If your board is comprised of people with the same age, sex, industry background, etc., you are missing a huge opportunity to expand the benefits advisors can bring. Having diverse advisors will expose you to a wider array of connections and thinking.
5. Ask for the help. I always tell those that want to engage me as an advisor that I am always available to help, but they have to ask. First, I don’t know the goings-on day-to-day in the company, so I won’t know what issues are most pressing without being told. Also, I am very busy. There are multiple things on my mind at one time, not always the company. If you want something done, ask and be specific in your ask. The onus is on you, not the advisor, to find a way for them to be helpful.
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I would also suggest you schedule regular check-in meetings, via phone, Skype, in-person or otherwise. This is usually a practice with formal boards, but not necessarily with advisory boards. This makes sure that you, as an entrepreneur, don’t forget to utilize the advisors as you get caught up in the day-to-day fire drills of running the business.
6. Be responsive. If you ask for help and the advisor wants to help or is helpful, be responsive. I have had far too many entrepreneurs ask for my help, only to find when I requested something specific, like a piece of collateral required for me to bring my contacts and expertise to bear, they never got back in touch (or perhaps, took quite some time). Advisors can be helpful, but you need to fulfill your part of the bargain. You have a responsibility to follow through on any tasks required to help your advisor help you and the business.
Even worse are the entrepreneurs who ask for help and then bounce to the next person for help without following through on the work the first advisor has done. I have seen this many times. It is not fair to send an advisor on a wild goose chase or have him invest time in one direction for you to get bored, fall off the face of the earth and then ask another person a new set of initiatives. You will not only lose business benefits, but you will earn yourself a bad reputation.
7. Give advisors a “vested” interest. Many advisors love to give back to entrepreneurs, but being an advisor is both a commitment and an opportunity cost, even if that cost is that they just can’t be on another board. Consider giving them an equity stake so they have a vested interest in participating in the success of the company.
However, the second part of that is to make that equity interest “vest,” i.e., earned over time. As many flaky entrepreneurs as there are, there are also flaky advisors. So have a trial period to test out working together and if you both see the value, have that extra kicker available.
About Carol Roth
Carol Roth is the creator of the Future File ® legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness.
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