Create a Board of Advisors to Guide Your Business
Corporations always have a board of directors; it's a requirement of the legal business structure. But regardless of your business structure, as a small business you can, and should, have a board of advisors.
Your board is there to guide you and help you make critical business decisions, such as on the structure of your business. Most boards have a similar makeup.
Let's start with the four basic players on your board:
- A legal representative
- An accountant or financial representative
- A business insurance representative
- A banking representative
You'll compensate these individuals for their services either directly or indirectly. For example, you may pay your attorney or accountant on an hourly basis. In comparison, your insurance representative makes a commission from the products or services for which he or she contracts with you.
Your experts can be partners in your small business success. Empower them to be part of your success.
Your legal representative can help you select your business structure and file any necessary paperwork. It is often helpful for the legal and financial experts on your board to work together. Consider having a launch meeting. At this meeting, you can make necessary small business decisions as a team and delegate the various tasks that need to be done. Meeting as a group ensures that there will be no miscommunication.
Depending on your type of business, you may find it helpful to include your insurance representative in this meeting, especially if your business involves potential liabilities.
The fourth member of the team is your banking representative. In an age of direct deposits and automated banking, it's critical that you become a known face at your local financial institution. Make it a habit to physically walk into your bank during regular banking hours to make a simple deposit or withdrawal. Make a personal connection with the banking team.
As your business grows, you'll require their specific business services in some capacity. Perhaps you'll simply need to open a business checking account. You may be looking for financial assistance to actually start the business. Or you may need a loan to grow the business down the road. Know your bank and let them know you.
There's flexibility when selecting additional members of your board. Try to balance your team between professionals (the first four) and those who'll be more consultative. For example, you might want to add a customer or a supplier to your board.
If your business is strictly local, one of your board members could be a competitor from another area. If you're a franchise, select another owner in a neighboring state.
Many business ideas lend themselves to partnerships with other businesses. For example, if you're specializing in accounting services for over-the-road haulers, the owner of the largest truck stop on the interstate might be a good resource for you. If you're a wedding consultant, the manager of the bridal shop or the award-winning local floral designer may be good additions to your board. If you're getting into the pet-sitting business, a local veterinarian or the manager of the neighborhood pet store might provide excellent guidance.
There's no limit to the size of the board or the membership profile. Your board doesn't need to meet officially; they can simply exist on paper and you can access them as you need their guidance and expertise. Most people would be honored if you placed them on your board of advisors. Ask them.
