What is an Advisory Board? The definition of an Advisory Board is: a structured, collaborative…
Future-proof a Start Up Business with an Advisory Board
The daily schedule of a start-up business owner or entrepreneur is never the same. They wear several hats being the owner but also typically the creative genius, founder, salesperson, marketer, customer service expert and finance manager. They have long-term goals about where they want to take their business, but they may not have the time or expertise to get there on their own.
Start-up businesses can benefit from quality Advisors
The digital age provides opportunities for ambitious individuals to leverage their ingenuity, entrepreneurial thinking and remarkable drive to launch their business concepts. Yet, ambition, determination and a great idea cannot guarantee success. Small businesses are still vulnerable to market conditions, strong competition, execution risk and management issues. Typically, a young firm will be pressed for resources to bring on the relevant expertise to meet these market pressures and take the business to the next level.
The face of modern business is a lean, flexible operation where outsourcing many of the roles traditionally held in-house is common practice. As a result, it makes sense for fledgling businesses to effectively outsource advice to fill the knowledge gap in their business.
A Fresh Perspective
Consultancy firms have been the traditional source of external advice however a wave of Advisors are bringing a new way of working.
Entrepreneurs can gain access to independent Advisors who provide a fresh, untampered perspective. Multiply this by two or three, the typical number of external Advisors on an Advisory Board, and the benefits of independent advice are multiplied. A hand-picked Advisory Board can prioritise focus, share best practice and provide valuable insights into shaping the business.
The Advisory Board Centre is at the heart of research into the area of effective Advisor engagement. In its State of the Market 2019 Annual Report, the Centre indicates that Advisory Boards are a crucial tool for businesses.
‘Traditionally, the emerging business sector has preferred Informal Advisory Boards and mentors but there is now a shift to a more formalised structure…with 21% of businesses starting a formalised Advisory Board when their business is in the emerging stage.”
Advisors are not caught up in the often volatile day-to-day operations of the start-up so they can provide valuable strategic advice with a long-term outlook. Accessing professional Advisors is a step towards creating a strong foundation to enable business growth. The earlier a start-up can commit to good governance, the better placed it will be to advance.
Emerging firms are using Advisory Boards to help them understand and prepare for next-stage governance; to help them formulate the future through well-designed and fit-for-purpose Advisor engagement.
Importance of Scalable Governance
It can be challenging for emerging businesses to embrace governance when the business is constantly adapting to unforeseen obstacles and there is a high level of volatility. However, good business practices and the intent to develop strong governance, well-oiled operations and disciplined structures are crucial for creating a scalable operation.
It’s common for emerging businesses to source funding from incubator and accelerator programs, from government initiatives and alternative lenders. It is not just the innovation inherent in the business that attracts financiers though, it is also good quality processes and governance. A well-structured Advisory Board can increase the confidence of external financiers and investors.
Consultants & Advisors
Consultants also offer external advice, however, the cost of large consultancy firms can be out of reach for small business owners. Advisors can work in collaboration with emerging businesses to offer flexible and cost-effective advice.
The State of the Market Report points out:
‘The democratisation of advice is the new trend. Advisors and Advisory Boards enhance rather than replace consulting…Advisors and Advisory Boards should be considered as part of the consulting process by organisations seeking a multidisciplinary and integrated approach. The new Advisor is an independent voice of reason behind the consulting dollar investment.’
Emerging businesses can gain significant value and competitive advantages by accessing Advisors and perhaps implementing an Advisory Board. However, it is imperative to source good quality Advisors with relevant expertise and knowledge to reap these benefits.
Small business owners looking to learn more about Advisory Boards and how they can help future-proof your business have a few options:
- Understand best practice in Advisory Boards by downloading the ABF 101 Advisory Board Best Practice Framework™
- Educate yourself through the Advisory Board Technical Foundations Program, designed for business owners who are seeking best practice guidelines on how Advisory Boards technically work.
- Ask for help through the Advisory Board Centre’s Advisor Concierge, a complimentary service that supports businesses to connect with an exclusive group of leading, board ready professionals to create a tailored Advisory Board. You can drop an e-mail to firstname.lastname@example.org to get started.