Creating an advisory board is the best decision an entrepreneur can make, but many entrepreneurs fail to create an advisory board.

I speak to entrepreneurs daily about creating an advisory board and hear many excuses about why they don’t have a board.

Most common excuses:

1. Ego: What do they know that I do not?
2. They don’t have the time.
3. Fearful.
4. Do not understand role of advisory board.
5. Do not want to pay for advice.
6. Do not know how to setup.
7. Do not know what type of advisors to solicit.
8. Do not see value proposition.
9. Using Vistage or another organization.
10. Had a bad experience.
11. I can do it all myself.
12. Afraid of being fired: Advisory boards cannot fire a CEO.
13. Believe they must take advice.

Advisory boards are setup to provide business advice. They are informal.  Advice given is non-binding. With an advisory board, you do not need to chart unfamiliar waters alone. Advisory boards give you objective advice.

Advisory board uses: 

1. Marketing advice.
2. Gauging future trends.
3. Seeking introductions.
4. Finding investors.
5. Sounding boards.
6. Helping enter new businesses.
7. Provide a set of “fresh eyes” for the organization.

9 tips for creating an advisory board:

1. Determine the objectives of the advisory board: Boards can be targeted or general. Determine your needs and set your objectives.
2. Create a board that complements existing management: Look for people who bring new expertise to your company. Have members with diverse skills, expertise and experience.
3. Set expectations: Tell prospective members what you expect of them.
4. Compensate your Advisory Board: Compensation can be in cash or stock.
5. Keep board size manageable: The smaller your board, the more efficiently it will operate. Start with 3 or 4 board members and add, as different skill sets are needed.
6. Get the most out of your board meetings: Prepare to get the most out of your meetings. You need to set goals, prepare an agenda, and take minutes.
7. Ask for and expect honesty: You may not like what you hear, but accept that there are other ways to look at a situation.
8. Respect your board’s contribution: You do not have to do everything that is suggested, but you should evaluate the advice before making decisions.
9. Fire bad board members: If you have made a bad decision replace the board member.

An advisory board will make a company successful and a successful company more successful. Having an advisory board is an opportunity you cannot afford to miss.

In 13 Ways a Board of Advisors Can Help Your Company, I explain ways a company can successfully use a board of advisors.

How has a board of advisors helped your company? What unique advantage did it give you?

P.S – If this article resonated with you, then perhaps I can help? I am a proven CEO, a certified board director and an executive business coach who offers a free Entrepreneur Weakness Assessment to see if you are ready to take your business to the next level To learn more, click the link below.

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