If you run a small business, you’re the one who calls the shots — and you’re probably pretty good at it. But getting some guidance on your business from people who aren’t involved in the day-to-day, or who have specialized expertise, can be extremely valuable. That’s why many small businesses have an advisory council.
Help with Financial and Business Decisions
An advisory council is a group of people — maybe as few as two or three if your business is very small — who periodically come together to be a sounding board for ideas or issues you’re having, and offer advice on your financial and business decisions. It’s less formal than the board of directors a larger company might have. And unlike a board of directors, an advisory council (or advisory board, as some may call it) doesn’t have any actual control over your business.
So, why form an advisory council instead of just getting together for lunch with a colleague now and then, or having conversations with your attorney or CPA? Because meeting regularly as a group gives you a 360-degree view of your business in one fell swoop. It allows people with different perspectives and expertise to bounce ideas off one another, and offer differing opinions.
A council also forces you (in a good way) to take a more methodical approach to reviewing your business decisions, challenges and trajectory. You put council membership expectations in writing, set meetings at regular intervals — generally monthly or quarterly — and stick with them.
Assemble Your Dream Team
So, who should be on your advisory dream team? You want people whose advice and ideas you trust, who have a good understanding of your business (or at least your field), and who want to see you succeed. Start with anyone you already call on for help with your business, either for hire or for free: Your accountant, your attorney, maybe a mentor whose opinion you respect.
Then cast a wider net. Maybe there’s an industry expert whose articles you’ve read, or a recently retired business owner or executive with a career’s worth of experience in your field. Perhaps a vendor or even a customer might be able to offer valuable insights. Investors or shareholders, if you have them, are also smart choices for your advisory council.
Make It Worth Their While
For many advisory council members, being on a council is its own reward. It’s an opportunity to network, learn, socialize, and be a part of the success of a venture without having too much at stake. Plus, who doesn’t like giving advice?
That being said, it may be customary to formally compensate advisory council members in some way. Many business owners offer their advisory board members a cash stipend on a yearly or per-meeting basis, and find that it helps ensure that members take the commitment seriously.
Include a Council "Quarterback"
You may also consider inviting your independent Financial Professional to join the advisory council on a voluntary basis. Since a Financial Professional is focused on the “big picture” of your business’s financial circumstances (and most likely your personal finances, too) they can be an ideal addition for your council. The advisor may help you facilitate the discussion, and follow up on action items.
The Financial Professional may also be an effective (and objective) soundingboard for the different parties, and help ensure that the lines of communication stay open before, during and after the council meets.
Don’t Go It Alone
Even the most self-sufficient entrepreneurs can benefit from a little advice — and maybe the occasional pep talk. A carefully assembled advisory council can help you take your business to the next level.