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- More from Jim Kendall
If you're willing to accept pushback from your own hand-picked advisers, you may be ready for an advisory board. Especially in today's uncertain economy, an advisory board can provide business owners with valuable analysis and advice.
So say Paul Heinze and Andy Kinder, two business advisers who have both organized and served on small business advisory boards. And so hopes Terry Hannon, a Wheaton-based financial adviser with five employees, $100 million under management and an advisory board that met for the first time Tuesday.
Although most advisory board members are outside the sponsoring company's normal sphere, Hannon, president of Theresa Hannon Financial Group, Ltd., is taking a slightly different approach. The seven members of her advisory board are clients.
Hannon is concerned that THFG's client interaction and service had become "too reactive" over the past year, perhaps understandable given the state of the financial markets. Still, Hannon's message to her board - disclosure: I'm one of the seven - is focused. "Help me do what we do better," she says. "And help me grow."
Such direction is important.
"Your advisers don't want to shoot the breeze" when they meet, says Heinze, president of Paul M. Heinze Co., a Barrington Hills consultant for closely held businesses. "Know where you need help. It might be marketing or collections or the fact that your executives don't talk to each other.
"If you're lonely or lost, an advisory board won't help."
The scope of the issues the business owner wants to solve will help determine choices for the board. Even so, says Kindler, "The business owner must be willing to have people (on the advisory board) who will push back. The board's role is to help the owner through the major decision process that brought the board together."
Kindler, senior consultant at Naperville's Corporate Strategies & Solutions, Inc., a Sandler Training Center, served on a law firm advisory board purposely made up of non-lawyers who were legal services users. Chosen to help the firm consider a change in business direction, the board met for two and one-half years - generally the useful life of an advisory board.
Most boards meet quarterly, Kindler and Heinze say.
"Lay out the rules of engagement early," says Kindler. "The advisory board can't get involved in the operations of the business. They need to stay big picture."
Kindler suggests seven members as a maximum advisory board size. Heinze prefers "three to five advisers" for businesses under $5 million in sales. Both agree that advisory board members should be compensated, partly for the time they devote to company issues between quarterly meetings.
"This isn't pizza for lunch," Heinze says. "Your advisers are supposed to help you solve a problem."
He suggests a $500 honorarium for a morning meeting.
Questions, comments to Jim Kendall, JKendall@121MarketingResources.com.
© 2010 121 Marketing Resources, Inc.