Soon after I joined the Young Presidents’ Organization (YPO), one of my new friends said, “Bob, you are trying to use the monthly small group forum meeting as your personal board of directors. What you really need to do is put together your own board of advisors.” It seemed silly to me—how could I possibly benefit from a board of advisors?
Why Would I Want a Board of Advisors Telling Me What to Do?
My friend was persistent, so I carefully researched the possibility. I asked YPO International to send out a survey to a region of the country far away from me, to ask members about their experiences with using an advisory board.
I received more than 30 responses. And it was amazing how much these business owners raved about the huge benefits they had gotten from having an independent advisory board!
Generally, their boards of advisors would meet five or six times per year for two to three hours. The most effective board size was considered to be four or five members. The entrepreneur would prepare a detailed agenda for each meeting, usually emphasizing one issue that he or she was struggling with or giving a lot of thought to. He or she would typically make a detailed and thoughtful presentation of this major topic and maybe some minor ones at the upcoming meeting.
Most but not all of the entrepreneurs paid their boards around $1,000 per meeting. But most advisors were highly successful businesspeople and they attended the meetings more to help out a fellow entrepreneur than for the money. Some businesses that were struggling didn’t pay their advisors at all.
So I adopted this model for my board of advisors. It worked great. The advisors were particularly successful in helping me recruit, hire, and manage some new high-level people I wanted to bring in as my business grew. I vividly recall one of the advisors even coaching me in the right voice tone to adopt in making my recruitment pitch to a highly sought-after job candidate.
My board of advisors was even more indispensable when I went through the process of selling my business. Without the board of advisors, I bet I would have sold my business for 30 percent, if not 50 percent, less, and suffered a lot more anxiety during the experience as well.
The bottom line: No matter how small your business or how deep your experience, put together a board of advisors!
Takeaways You Can Use
- Everyone needs a board of advisors.
- Four or five advisors are usually enough.
- Meet five or six times per year for two to three hours.
- Prepare issues carefully for meetings.