Many cultures have a way to impart wisdom from one generation to another. It’s called a circle of elders. It makes sense. Why not let the younger generations continue to build on the knowledge of those coming before them? Your business can benefit from its own circle of elders. Advisory panels can provide the steady guidance your business needs to grow, but whom do you invite to be on your panel? How is such a group structured and how are its members compensated? It’s really a pretty straightforward process.
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Assembling a circle of elders will help you gain knowledge from experienced and trusted business people and community peers.
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It’s important to first define what an advisory panel is not. An advisory panel, or board, is different from a traditional board of directors. A board of directors has legal obligations to the company it serves. It has a say in how the business is run and the business leader reports to the board officially. There are often costs to insure board members against any legal action and, often, directors are compensated financially. An advisory panel is much less formal and can consist of two or three trusted advisors. A board of directors has an obligation first to the company and then to the president or CEO. With an advisory panel, there’s more focus on supporting the business leader. If businesses were playgrounds, think of a board of directors as guardians and advisory panels as coaches.
Assembling the team
In order to develop a strong advisory group, look for advisors who complement your skills and offer strength in areas in which you aren’t strong. If you are a top-notch designer, don’t invite someone whose claim to fame is also design. Perhaps a retired accountant or marketing professional could lend bench-strength to your business, planning cycle instead? Remember that it takes a village to raise a business so advisors who are well connected in the community will also be assets. Wouldn’t it be great to have an advisor with solid banking connections? Family members are fair game too if you feel they have some expertise to offer and can remain objective. If there is a key customer who you feel could provide some vital feedback from the consumer’s point of view – he or she would be a great addition to the team. Once you’ve identified a few candidates for your advisory panel, contact them with an invitation to join your panel. Contact your candidates directly via phone, e-mail or, even better, in person over lunch. Explain to them that you respect their knowledge, experience and reputation, and that you’d be honoured if they’d consider acting as an advisor to your business.
Defining the role
The better you can define what’s expected of them, the more likely you are to receive their acceptance. Suggest that a commitment for one year would be wonderful to start with – it’ll give both of you an “out” should it not be a good fit. You’ll need to define how often and where they will be required to attend meetings. You could elect to meet quarterly as a group and then touch base with each advisor individually on an “as-needed” basis. It’s probably wise to define some short-term goals your advisors can help you with and, once those are addressed, you will be better able to expand the panel’s scope. Advisors typically aren’t paid for their service – they do it as a way of giving back to the community and because they’re flattered to be asked for their advice. You should be prepared to pay for travel expenses they may incur to attend your meetings and for a nice lunch a few times a year if the meeting is held at a restaurant. You might consider offering to donate to one of the candidate’s favourite charities as a form of compensation.
Communicate and take notes
Be prepared share key parts of your business plan with your panel. Book the meetings with at least a few weeks’ notice and get input from everyone as to any topics they feel should be included on the agenda. Send out agendas ahead of time so that your advisors will be able to think about the topics to be discussed prior to the meeting. Run the meeting as professionally as possible, sticking to the allotted time frame. Advisors will appreciate that you know their time is valuable. Take notes during the meeting and from those notes create an action register that shows what steps you are taking to implement the advice you are so fortunate to be receiving. Once again, your advisors will feel compensated when they see that their input is turning into actual progress. By sharing your tactics and results with them, you will be encouraging your advisory panel to continue to support your business. Keep your requests to a given advisor within the scope of their expertise. Some advisors may provide more input than others – that’s OK. Get their bios and include them on a page in your business plan listing your advisors. Your banker and other investors will be pleased to see that you’ve taken steps to shore up your company’s pool of talent. A happy investor is a good thing!
It may seem a bit daunting to invite other people into your inner circle. Small businesses are their owners – the business and the entrepreneur are one. That’s just the point. An advisory panel is there to support you and, by extension, your business will benefit too. When it comes to initiatives that offer great financial return for minimal financial investment, instituting an advisory panel tops the list. Don’t go it alone. You’ll be so glad you had a little help from your friends.
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