Some businesses have had to fold up as a result of some irrational decisions made by the business owners. Often, these decisions are made out of frustration when the business is going down the hill and the entrepreneur seem to be losing it. He realizes, sometimes when it is too late, that such decisions were not the best for the business after all. Often times, when all things seems to be going wrong for the business, an entrepreneur just needs someone with a clear head who would be able to think rationally and provide non-biased information, to advise them on what to do.
Who constitutes an advisory board?
An advisory board is an informal body of outside experts that an entrepreneur can use as a sounding board or to fill in gaps in expertise and contacts. Advisory board consists of a group of individuals who have been selected to help advise a business owner regarding any number of business issues, including marketing, sales, financing, expansion and so on. An advisory board is an informal group of local business professionals who can help you run your business better. They advise the board of directors and management of a corporation but does not have authority to vote on corporate matters.
An advisory board is not an official part of the company. It is a group of people you frequently turn to for advice, usually playing the roles of mentors, and attend formal meetings with some sort of regularity.
How to get members of your advisory board
There a lot of different ways you can find advisors, such as asking your accountant, banker, attorney or friends and approaching people you read about. People love being asked their opinion.
What is important is to recruit from a cross-section of ages, sexes, ethnic groups, business experience and expertise. Stay away from people who will tell you what you want to hear, but many entrepreneurs tend to recruit people like themselves or who see through the same lens. This is a huge mistake.
Do you pay an advisory board?
It is always a good idea to provide some compensation for your advisory board members, this could mean paying for their meals during meetings, though many business owners provide a financial stipend, as well. Typically, this small financial investment is well worth the benefits the advisory board provides.
Essence of having an advisory board
First, the purpose of an advisory board is to assist you in leading your company. It is there to assist you, challenge you, guide you, and open your eyes to new opportunities.
Having a source that can provide an outside perspective on the industry that you do not have in your company, you can be sure to get objective advise.
They provide mentoring, social and networking opportunities; after all your board isn’t JUST the board, it is everyone the board knows.
They contribute to the effective planning and monitoring of the business.