One of the more common issues affecting owner-operators of SME businesses is the lack of a sounding board for new ideas, strategic planning, performance concerns and management hassles. It can be very lonely at the top for the small business owner whose monthly board meetings are solo affairs.
A recent trend publicised in a May 20 BRW article (“Board Games”, Amanda Gome) highlighted the emergence of the “Advisory Board” as an effective alternative to a board of directors. Small business owners can rarely afford the cost of establishing a formal board, but are increasingly turning to Advisory Boards to provide the strategic thinking and support benefits afforded by such groups.
If established correctly, an Advisory Board can benefit business owners in:
- Access to specialist expertise not otherwise available within the firm
- Access to personal and professional networks
- Increased credibility with prospective clients, investors and employees
- Establishing accountability for individual action and progress
- Providing a sounding board for new ideas and strategic planning
- Enhancing the productivity and results of individuals throughout the organisation.
An Advisory Board is a far more cost-effective and simple alternative to a board of directors for a small to medium enterprise. There will come a time in the evolution of many SMEs when a formal board is necessary, but as FastTrack’s Justin Sway remarks, “an advisory board is like ‘try before you buy’”.
If you are feeling lonely at the top and could use a regular sounding board, consider establishing an Advisory Board. It could be one of the best investments you make for long-term success.
Five key tips for setting up an Advisory Board
- Keep them small and include people that complement your own expertise – accountant, business adviser, industry specialist, marketing advisor, human resources consultant.
- Schedule meetings on a monthly or bi-monthly basis
- Establish the purpose and objectives of the team up front
- See the initial cost as an investment in the future success of the business.
- Plan for setting up a formal Board once net revenue exceeds $5M.