Hire an Advisory Board
Hiring an advisory board sounds like something only large
companies can afford. Not true, says author Carol Milano. Make
your members' volunteered time a win-win situation for both of
you and you'll soon have a valuable team of advisors at your
Hire an Advisory Board - For FREE!
By Carol Milano © 2000 ChamberBiz
A Fortune 500 company wines and dines its Boards of Directors
lavishly, and provides handsome stipends. At Creative Courseware
in Kansas City MO, the advisory board is larger than the firm.
"We can't pay them, but we do feed them well," confides
Connie Swartz, owner of the 16-year-old curriculum development
"I think an advisory board is something a small company
should definitely seek," declares Martha Gershun, president
of BizSpace.com, an Internet publishing company in the telecommunications
field, who serves on Creative Courseware's board.
How can an advisory board help a small business? At Creative
Courseware, annual revenues in the early '90s consistently averaged
$400,000 per year. Since 1994, when their board began advising,
revenues have nudged $1 million.
The gains are more than monetary. Years ago, Swartz felt her
company's weaknesses were in marketing, finance, legal issues,
and technical skills. After reviewing Creative Courseware's marketing
plan, her new advisory board agreed. They suggested more strategic
approaches to growing her business instead of just relying on
luck and word-of-mouth.
How often does an advisory board need to meet? At first, Swartz's
board held a two hour-meeting each quarter, then semi-annually.
In January, they'll gather for their now seventh annual meeting.
Swartz often sees one advisor at a time, to talk about a specific
Why They Serve
What attracts a volunteer advisor? For Dave Richter, president
of Intellectual Property Management Group in Kansas City, and
a member of the Creative Courseware's advisory board, it's all
about networking and the exchange of ideas.
"Connie has a nice mix of people on her advisory board,
which keeps the dynamic interesting and exciting. We have members
with different perspectives: legal, marketing, finance, general
business. The exchange of ideas is always fun." The venture
catalyst suspects board members often come away with a few ideas
to use in their own businesses, too.
Fellow advisory board member Gershun certainly agrees, finding
that "thinking through problems for someone else is a little
like going back to school." By networking with high-level
professionals in a non-competing situation, "I've met several
great people on the Creative Courseware board. When you hear
someone say something smart in a meeting, you want to get to
know them." She's had lunch with other board members, who
have, for example, referred her to vendors. "Now they're
part of my network," says Gershun, who considers board service
an excellent addition to her own resume.
Although Swartz's advisory board members are volunteers, no
one goes unrewarded. Swartz thanks her advisory board members
with "gift baskets, company t-shirts and gift certificates
to bookstores or restaurants--things we feel they'd like. We
feature them in our company newsletter, and try to promote their
businesses, year-round." The gestures are noticed. "Connie
makes us feel appreciated. She always says thank you, feeds us,
sends cards... You wouldn't want to serve on the board of a company
that just took you for granted," Gershun says.
Recruiting Your Own Advisory Board
So how do you form an advisory board for your company? First,
identify your goals. For Connie Swartz, after the idea first
struck her, she talked with her five employees to determine Creative
Courseware's needs. For example, Swartz initially felt her company's
weaknesses were in marketing, finance, legal issues, and technical
Start a list of potential advisors.
With accounting, finance and legal issues prominent, Swartz's
staff nominated their accountant and lawyer. "We liked them,
and had worked with them long enough to know their philosophies
were in sync with ours," says Swartz. For a fresh perspective
on areas like marketing and customer service, they put two clients
on the list.
Expand your pool of nominees.
"We asked ourselves, who knows and loves us, has the skills
we need, and would volunteer to advise us?" Swartz remembers.
She particularly considered people she'd met through the non-profit
Silicon Prairie Technical Association, while serving on several
committees over six years. Other prospects included former classmates
or professors, vendors, suppliers and friends.
Invite your nominees to an initial meeting.
As company president, Swartz personally made calls for Creative
Courseware. "I talked about why we were starting an advisory
board, our objectives, who else would be included, and what their
roles and responsibilities would be." She met with two nominees
over lunch to explain in more detail. All six of her candidates
agreed to sit on the board.
Setting the Right Tone, Right From the Start
For an advisory board, its first meeting sets a tone and image
for members. In August 1994, Creative Courseware's new board
convened from 4 to 6 pm, in an advisor's office. Swartz had sent
each attendee a binder of advance reading material: a meeting
agenda, company mission, organizational structure, financial
data, goals, current activities, a mini business plan, and contact
information for other advisors. "We wanted them to feel
we'd put time into this, and that it was worth it to give up
two hours of their day." Creative Courseware's entire staff
was on hand.
Keep in mind that an advisory board is NOT a board of directors.
Swartz had carefully researched the differences. "Because
of our goals, I realized our need was for a board of advisors,
which requires no liability insurance." Her attorney recommended
that Creative Courseware prepare a brief confidentiality agreement,
covering financial disclosures and other topics. Each advisor
signed it at the first meeting.
And today? Swartz's advisory board is still going strong.
Two advisors have since resigned when new professional duties
interfered with their service. "Every year, I say, 'Okay,
you've done this all year. Do you want to continue?' Our four
original members continue to feel it's rewarding," Swartz
beams. "You don't have to be a big company to have this
kind of support structure: wonderful ideas, incredibly strong
interest. I'm so glad I thought of an advisory board!"
Carol Milano is the author of this article and HERS: THE WISE
WOMAN'S GUIDE TO STARTING A BUSINESS ON $2,000 OR LESS (Allworth
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