The Advisory Board

Even having a work partner that fills one or more roles will not replace an advisory board.   If you or your partners fill these roles, it’s not going to harm anything, but all of the roles on an advisory board being able to be filled by the management of a small business is unlikely. Even if you happened to be lucky and you could fill all those roles with your management alone, it’s a better situation when you have people outside of management to bounce your ideas off of.

There are many opportunities today to have an advisory board, and have it cost you very little, or even nothing at all. Developing a relationship with the following professionals and having them become a part of your advisory board is strongly advised:

1. A CPA – You’ll want a CPA to prepare your tax returns and possibly to perform a compilation, review or an audit. Usually if you hire a CPA to do these things they will be part of your advisory board. Usually they will be on the advisory board for nothing if you give them the aforementioned tax preparation business and you develop a good relationship with them. CPA’s can also refer you to funding sources and other support services including referring to you more business.
2. A Lawyer – You should develop a relationship with a good business attorney. It must be a business attorney. One of the perils of business is that it exposes you to legal situations. Certainly do not use attorneys if you do not have to and there are other opportunities to get more cost effective legal advice like Prepaid Legal Services and others, but you want to get an attorney on your advisory board. Therefore it is a good idea to develop a relationship with an attorney who you can trust and will bill you in a professional manner. I have seen some attorneys bill me $75 for sending a fax! It can get that crazy. However by developing the right relationship with the right attorney you can have a trusted and valuable advisory board member who you can call when the need arises for legal assistance. Lawyers can also be a source of support services, funding sources and may refer more business.
3. An Insurance Agent – There are several situations in business that call for specialty insurance and special protection. A professional insurance agent will be able to identify perils and risks that need to be insured.
4. A Part time CFO – By using a Part Time Chief Financial Officer you have the opportunity to get a number of financial services on an as needed basis. In addition you have a valuable advisory board member. Here are some of the CFO services a part time CFO can perform:

• Solving cash flow problems
• Determining cash needs
• Designing a plan to work with existing cash and other resources
• Structuring an exit plan
• Determining Business Value
• Optimize operations
• Drive results and drive the bottom line
• Contribute to business development
• Shape financial strategy
• Understand, identify and assess the risks of business ownership.
• Prepare the Financial portion of your business plan.

5. A technical or operations professional (which one depends on your industry) – You add this person to your advisory board for their operational or technical expertise as it’s related to your product or service. Once again, you might have someone in management who could fill this role, but it’s always better to get perspective from someone outside of management if it’s at all possible.

I would be leery of certain professionals on your advisory board charging fees. Do everything in your power to build the right relationships and if you can, promise to give business to these professionals somewhere down the line.

Advisory boards are critical to being a healthy, happy business owner. I have one associate who says he never worries about any problems in his business—he doesn’t have to. And he doesn’t have to because he gives all his problems to his advisory board and lets them figure it all out. For the amount of worries they can take off your shoulders, it’s certainly worth the time and effort to put together a good advisory board.

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