Many of our CorpNet readers looking to incorporate or start a business are doing this for the first time. Way before you’re ready to have a full outside Board of Directors, you may need some good advice, on a regular basis, from people you look up to or value in business. An advisory board is a group of people who want to see your business succeed, and who believe in your idea. They could easily be called your “sounding board.”
An advisory board advises you about areas of your business you may not know well. Jennifer Iannolo, Founder and CEO of Zenfully Delicious, has an advisor who works in international finance.
Zenfully Delicious is “a lifestyle company provides educational tools and support to women with fibromyalgia and food sensitivities.” The site provides recipes, advice and more, and the audience is eating it up (sorry). Her advisor has been important in helping her refine her business concept before seeking financing.
“He helped us craft our pitch in a way that explained our concept to the layman outside the world of health & wellness. He also made the company’s growth potential and profitability very clear to investors. We wanted to show our clever marketing, but he reeled us in to tell the story the investors really cared about.”
Find ’em, Collect ’em
This sounds great, but how do you find advisors, and how do you convince them to participate on your board? For some advisor types, it is possible that bringing them in will expose them to a new field, or other advisors whom they can network with and learn from. A “traditional marketing” executive may be a great advisor and may learn from your company how to work with some social media tools. A franchise owner may meet a great lawyer or accountant who is also part of your board. And a salesperson is always looking to meet new potential connections.
Sometimes, an advisor just likes encouraging entrepreneurs. I recently joined the advisory board of startup PinBooster, which connects advertisers with Pinterest users, because I like their idea, I respect the product and the traction they’ve gotten and I enjoy spending time with the founders.
Advisors may come out of your own networking activities, chambers of commerce, or even from SCORE. Some entrepreneurs compensate advisors with a small option or stock grant, or pay their expenses to travel to a meeting. But some advisory positions are purely for the support of the company.
Using Your Board Wisely
While most advisors won’t mind an occasional call or email question, one of the most effective ways to use them is to have quarterly meetings. Treat them almost like a real board of directors. Set goals and take their advice, and three months later show them the progress you’ve made and ask for more help. Run this meeting like any professional meeting, with an agenda, goals you want to accomplish, and have your financials, business plans, and other materials available to share with your advisors.
The way you conduct this meeting will reflect on you and the way you run your business. Of course, you should be open and transparent with the advisors about what is and isn’t working, so you can get the benefit of their advice – that’s why they’re there!
With an effective advisory board, your business can grow to a place where you’ll need a board of directors before you know it.