Here is the understatement of the year: Managing a growing business is a challenge.
A successful business requires many ingredients: vision, passion, work ethic, willingness to sacrifice, belief, intention, resources, products or services people want, just to name a few. When a small business fails (and many do, unfortunately), one of the key missing elements is a lack of understanding about the business of doing business. Developing know-how on the management side of keeping a business moving forward is a crucial component that many business owners overlook, or at least fail to appreciate. A growing business must address legal issues, accounting and tax issues, capital resource requirements, human resource requirements, marketing and sales challenges, and the list goes on.
There is a lot of expertise necessary and the owner(s) or partners of the business just can’t know or do it all. The sooner the owner(s) recognize their limits and seek the help they need, so greater their chances of not only surviving, but thriving.
Large corporations utilize a Board of Directors who help guide the senior leadership team in making decisions that affect the future of the business. An ideal Board is composed of diverse leaders from differing industries whose perspective adds value to the decision making process.
This shouldn’t be limited to the big guys! A small business can assemble a small group of individuals who will provide invaluable counsel, guidance and expertise to the owner and managers of the business. Unlike a corporate Board of Directors, members of a Board of Advisors do not usually have an ownership stake in the business and they don’t have legal responsibilities for what the business decides to do. They have no authority in making decisions, but offer input based on their experience and expertise.
So what could a Board of Advisors do for you? Glad you asked! There are a number of benefits to utilizing your own set of advisors. Primarily, they can help you avoid serious mistakes! Their ‘been there-done that’ expertise can help you stay away from the errors they may have made in their own businesses, thus saving you time and money.
Your Board provides a mix of opinions with differing points of view, which can help you see things from a variety of angles. We all have blinders at some point regarding our businesses, so a different perspective can be real asset.
If you choose your Advisors correctly, they will bring a wealth of contacts that can be invaluable to your success. Since a great deal of success is based on who you know and when you know them, having a group of professionals who will make timely introductions when you need them is an excellent resource. Be careful not to wear out your welcome by abusing this!
Your Board of Advisors can give significant credibility to your growing business. It demonstrates that you recognize the value of outside advice, that you are serious about making your business a success, and that you are self-aware regarding your own limitations.
How many advisors do you need? For a small business a rule of thumb would be 5-8, with more as the business grows. Who should you pick? First take a look at your own business plan, and what skills you may lack. You are looking for experience in key areas, and they need to be people you can trust. If you can’t work with them, or they tend to want to take over, they are not a good fit. They need to understand their role as supporting you, not running the business for you. They also need to get along with each other, or your meetings won’t be very productive.
Selecting and utilizing a Board of Advisors will take some effort and time, but a supportive team who will guide you with timely advice is worth the effort.
Warren Williams is president and founder of Turning Point Business Coaching. He provides coaching to growing businesses in Concord and the Greater Charlotte area. Have a question about this article, or a topic you’d like to see covered here? Contact Warren at email@example.com or visit www.TurningPointBizCoach.com.