Ever wonder why some firms grow quickly and others seem to take years to get going? Starting a business is easy enough, but running it can be complicated. One set of skills is needed to launch a business, and another set is required to expand sales and profits.
What secret weapon do successful business owners use to avoid fatal mistakes? After all, 20 percent of new companies fail in their first year, and only half will survive past year five. Without the proper tools, it’s almost impossible to grow an organization.
Letting Go of the Lone Wolf Mentality
In the start-up stage, many entrepreneurs focus all their energy on getting their companies off the ground. They lean into the roles of the lone wolf and sole decision-maker. They make sales, generate revenue, and start producing goods or services. Doing this on their own provides a great sense of accomplishment.
But very quickly, business owners will run into challenges, make mistakes, or miss opportunities. To grow a business, the founder has to let go of the role of the lone wolf and instead work as a pack.
The Secret Weapon
Working with a team of experts is one of the best ways to beat the odds. And forming an advisory board is an especially effective way to access expertise from various fields routinely. An advisory board is a secret weapon that allows entrepreneurs to make well-informed decisions. It amplifies the skill and experience of the primary decision-maker and helps them avoid costly mistakes.
The board’s primary function is to provide access to business expertise. It should include a skilled business attorney, a tax adviser, and an accountant. Sometimes the same person handles two of these roles, but it’s wise to consider keeping them separate to allow specialized focus on different aspects of the business.
Include a board member who understands key performance indicators and critical paths to success. They know how to set attainable goals, push growth, and measure success. This individual should be able to measure the company’s performance against competitors and spot challenges and opportunities early on.
As a firm grows, the advisory board may also develop. The experience of retired CEOs, business owners, and industry specialists all bring additional expertise.
A Strategic Facilitator Runs Meetings
At every stage, a strategic advisor will help manage the advisory board. A consultant or coach can fill this role. They run board meetings and use owner feedback to create agendas. They also coordinate follow-up and ensure each board member contributes.
Using a strategic facilitator, the business owner can serve as one member of a team instead of the ruler. The advisor is there to see the whole picture, allow all voices to be heard, and make educated decisions about the next steps. It’s a special set of skills but critical for continued business success.
Advisory Board To-Do List
Without expert advisors, it’s easy for a company to make minor errors early on that eventually grow into critical issues. To maintain a holistic approach to growth, boards must handle various tasks. Here is a typical to-do list for advisory boards:
- Determine or refine unique selling point
- Continually research competition and provide updates
- Benchmark sales, profits, expenses, and growth
- Evaluate capital investments and payback timelines
- Assess expansion opportunities and weigh risks
- Evaluate price, product, and service offerings
- Review profit and loss statements
- Refine and improve billing, inventory, and shipping strategies
- Ensure tax compliance and identify strategies for tax savings
- Proactively identify legal concerns and ensure compliance
- Optimize salaries, staffing, and hiring
Get on Board!
Formally creating an advisory board and using a facilitator to drive progress is one of the most effective ways to compensate for blind spots, reduce tunnel vision, or avoid tripping over profit-draining surprises. When the owner encourages a team of experts to improve the business, they not only improve the survival rate but also create a path to long-term profits and growth.
