But many entrepreneurs, especially those in the early stages, find the task of building an advisory board daunting. Whose strengths would complement their own and counter their weaknesses? Who might bring an insight to the table that would otherwise be missed? It can feel like an exercise in knowing what you don’t know. Moreover, most people who have not formalized such a board before haven’t given much thought to what it takes to keep one running effectively.
This is why, in the Entrepreneurial Winning Women™ program I oversee at EY, we make this an early part of our teaching. The program is our effort to help women entrepreneurs in particular take their small businesses to the next level. We identify promising startups and provide the women behind them with customized executive leadership training and the opportunity to join an elite network.
The advice we offer and the discussions that take place among our entrepreneurs center on five key tips:
Look outside your existing network of contacts.
As you sit down to think about whom to invite onto your advisory board, remember first that this should not be a group of your friends and fans. You’re looking to drive new business opportunities and new ways of thinking with diverse experience, expertise, viewpoints, and skill sets. Work to find people outside your inner circle who have built successful businesses and can pass that knowledge on to you. Think about who would be a constructively critical audience, and who can provide access to other valuable contacts, from potential customers, suppliers, and strategic partners to financiers, publicists, and other professional service vendors.
Recruit a well-known community member or industry influencer as your first board member.
There is a reason that film producers begin their projects by lining up the most bankable talent they can. Their involvement helps to attract others who want to work with them, or who simply see a star’s commitment as reassurance the project will take off. In the same way, entrepreneurs should work first to recruit the people who will attract others, and give an advisory board strong credibility from the start.
Invest the time in developing relationships with your board members.
Since most are not compensated, their reward is the satisfaction of sharing their knowledge and experience and helping you succeed. So make them feel appreciated! (Meanwhile, if a prospective board member does insist on being compensated, determine how uniquely valuable he or she is. If there’s a possibility of a long-term business relationship, you might want to offer that person some kind of remuneration.)
Establish goals and expectations for the board up front, including how often it meets and where.
Usually, in-person meetings once every three to six months will suffice, but you may want to reserve the right to consult with individual members on an ad hoc basis if a particular issue comes up. When the board does meet, make sure there is an agenda with specific goals. Your board members are busy professionals, so don’t waste their time. Perform a yearly assessment of how the board is working. If you can afford it, invite them to an offsite at a comfortable locale at your expense to have them discuss the board’s progress.
Have a framework for transitioning out board members.
As a high-growth entrepreneur, your business will evolve, and you will likely need advisors that bring different skills to the table at different phases of growth. Most will not have the time to serve on your board for more than two or three years, anyway. And others may not be as helpful as you had hoped. So, make it clear up front that they serve as needed and spell out term limits.
Finally, if you’re thinking of setting up an advisory board, be very clear on what it is, and what it’s not. It’s not a formal board of directors, which has well-defined duties including a fiduciary one. An advisory board holds no legal or financial responsibility for the decisions you make.
Instead, it is a group of volunteers with knowledge and skills that you, the business owner, lack, and whose purpose is to help you make your company a success. It is there to assist you, challenge you, guide you, and open your eyes to new opportunities.
For a high-growth business, it is difficult to overstate the importance of that kind of support. Advisory boards allow entrepreneurs to leverage others’ specialized knowledge while honing skills and talents of their own. Reaching new markets, accessing new forms of funding, adopting new technology, and garnering information to manage risk are all necessary to scaling a sustainable entrepreneurial venture. A strong advisory board is one of the fundamental building blocks that will allow you to take your business to scale.
About the Author
Kerrie MacPherson is a principal at Ernst & Young LLP and executive sponsor of its Entrepreneurial Winning Women program. She has served on EY’s Gender Equity Task Force, is an active leader in its Professional Women’s Network, and is the Diversity and Inclusiveness Champion in the Financial Services Office Advisory Practice.
* This article originally appeared here.
What Small Business Owners Should Know About Brain Health
By Andrew Greissman
You’ve heard the advice about how to create a viral video, and you’ve read all the tips on how to create SEO keywords, but what have you done for your brain lately? That’s right, in order to stay on top of your small business, you need to be thinking sharp and clear and the best way to make sure that all pistons are firing is to exercise your brain. Brain exercise is more than a new age concept, there is proven science behind the idea that, just like the muscles in your body, you can train your mind to perform at a higher level by engaging in the right exercises. According to the AARP brain health center, the five pillars of brain health are as follows:
Physical exercise:
Breaking a physical sweat, besides being good for your body at large, is also good for your brain health and can keep you thinking sharper. The reason? When you engage in physical exercise, you are strengthening the flow of blood through your body. Since the blood is the carrier of oxygen through your body, the more you get your blood flowing, the more you deliver this critical resource to the true powerhouse of your body; your brain. Alz.org, the Alzheimer’s prevention website, also cites physical activity as a way to encourage the growth of new brain cells.
Mental exercise:
Training your brain through exercises such as puzzles and games, reading, and even gardening, can have many long term beneficial effects. Just like any other muscle, your mind has connections that, when strengthened, allow more performance. This is particularly important for small business owners, as a mind functioning on a higher level means that you are more likely to stay on top of the myriad tasks during your day, from making sure orders go through, to obtaining financing for your expansion projects.
Diet:
Diet has been found to make a difference in the health of a person’s brain. In particular, certain foods have developed a reputation as being “brain foods”, packed with essential vitamins and compounds that enhance the creation of brain cell development and enhance memory. Fish is a widely touted protector of mental faculties, containing Omega-3 fatty acids, while fruits and vegetables containing antioxidants are also good for preventing your cells from aging. Foods that promote heart health are, as a rule, also good for increasing oxygen flow to your brain.
Staying social:
Having friends and engaging with others keeps your brain young as well. Social involvement challenges you to keep thinking, and interpreting the signals that others are sending you. this is a way to keep your brain stimulated and active without having to over think the exercise. People are naturally social; keeping this part of your life active and engaging will help you retain the highest function that you can.
Stress management:
Keeping a firm handle on the stress levels you are experiencing will also help protect the clarity of your thought. While it can be difficult to avoid stress, in particular as a busy small business owner, there are things that you can do to help you manage the inevitable problems that
will arise during the day to day. One of the best ways to manage your stress is to take a break from time to time. By allowing yourself even half an hour away from the chaos of your business week, you can retain a fresh perspective on all that needs to be done and keep yourself in top mental form.
Running a small business is difficult to be sure. In the end, your greatest ally will always be your own brain, so treat it well. Plan your business’s growth and expansion, and remember, when it comes time to access capital, you have options.
About the Author
Andrew Greissman works at Horizon Business Funding, LLC, which specializes in providing a wide range of small businesses with expedited working capital solutions. Unlike banks, we are able to work with damaged credit and high risk industries, filling in the gaps in the lending market with easy to access bad credit business loan alternatives.
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