There’s one secret weapon that’s available to all young entrepreneurs. But unfortunately, most don’t use it, probably because they don’t know it exists for them.
The secret weapon is to assemble a Board of Advisors.
Advisors are successful people that you respect, and that agree to help your company. They are generally successful and/or retired entrepreneurs, executives, business owners, service providers, professors, or others that could help your business.
Here’s the best part: assembling your Board of Advisors doesn’t cost you any money (you don’t pay them), although I do recommend giving them stock options to incentivize them to contribute as much as possible.
For the most impact, I recommend forming a Board of 4-8 advisors.
Since I often help entrepreneurs raise funding, my typical list of the advantages of assembling your board is as follows, although I think you’ll quickly see that the Board can give you key advantages even if you don’t need funding:
- Practice: if you can’t successfully pitch an advisor to invest time in your business, then you are not going to successfully pitch anyone to invest money in your business. So, practice your pitch on prospective advisors first, and use that practice to perfect it.
- Connections to capital: as successful individuals, advisors often have the ability to invest directly in your company; and/or they tend to have large, high quality networks of individuals that they can introduce you to.
- Credibility: having quality advisors gives your company instant credibility in the eyes of lenders and investors. For example, if you started a new hockey stick company, having Wayne Gretzky as an advisor would certainly give you great credibility (and connections).
- Operational success: Having Advisors with whom you can discuss key business matters as you grow your venture will help ensure you make the right decisions, particularly if they have encountered and dealt with the same challenges already in their careers.
Finding advisors is relatively easy. Start by creating a list of entrepreneurs, business owners, executives, and others who you feel can help your business. Then arrange informational meetings with them. My pitch to get these meetings is generally, “I’m a young entrepreneur. I have a lot of respect for what you’ve accomplished. I was hoping I could grab a few minutes of your time to tell you about my venture and get your take on it.”
If during the meeting you feel the person would be a great advisor, ask them to join the Advisory Board.
Finally, with regards to your Advisory Board meetings, I suggest holding them quarterly. For your first meeting, I suggest presenting your business plan to your Board beforehand and getting them to comment. Do they agree with your key objectives and goals? Do they agree with your strategies? Etc.
In future Board meetings, I suggest you review your company’s performance versus stated goals, set goals for the next quarter, and present the Board with your key questions and challenges.
Creating and leveraging an Advisory Board will add tremendous value to you and your company, and the cost (in terms of your time) of creating it will pay for itself over and over again.
Dave Lavinsky is the president and co-founder of Growthink. Since 1999, Growthink has helped thousands of entrepreneurs start, grow and sell their businesses. To help entrepreneurs succeed, Growthink offers both business plan development services and a business plan template.Subscribe to the Podcast