Leadership

Peer-to-Peer: How Do I Form an Advisory Board?

Your fellow entrepreneurs weigh in on how to create a smart sounding board for your business

Written by PROFIT-Xtra

Question:

“I would like some input on how to form an advisory board. Where do we find high-level contributors? How do we ask them? How are they compensated? What can we expect from them? How do advisory boards function in general?”

Submit a question.

Reader responses:

Look to an association

“The Associated Senior Executives (ASE) in Toronto is a non-profit group of retired executives who will sit down for 1.5 hours and discuss any issues you want for the small fee of $75 and if you want ongoing help it is also discounted. They will come out to your business or you can meet them on a regular basis or when you need to. I used this service recently and found it to be invaluable and will continue to use them for a fresh outlook from people outside of the company. I can’t say enough about it and for $75 you can’t afford not to try it out. The site is www.A-S-E.ca and you can get all the info needed there.” —Steve Wass, Wass Tools Ltd., Hamilton, Ont.

Consider including your customers

“I run four physiotherapy clinics and we have run three advisory boards in the last year: a patient advisory board, a doctor advisory board and a team advisory board. We got so much good information from our patient and team advisory boards and have made many changes and advances as a result of this.

“We asked the physiotherapists to each choose a patient they thought would be good on the board (and not only ones who would be positive, but would give us constructive criticism). The boards were run by a consulting company we were working with and none of the management team was at the meetings. It was felt that we’d get the most honest responses that way.

“We only did one patient advisory board meeting. It takes a lot of planning and organizing, but we will do one again in a year or so. These are the people who experience the business, so can tell you what works and doesn’t work. We didn’t pay them, but did provide lunch and then sent a big thank-you gift basket later. Same with the team advisory board. We did have two meetings, the second at about eight months, and got feedback on how we responded to their concerns from the first meeting.” —Vaida Hick, Physiotherapist & Director, PSI Rehab Group & Acceleration, Ottawa

Take the recommendations of your peers

“Where do we find high-level contributors? Most business people hire advisors that are recommended to them by other business owners. This is often how we find our accountants and lawyers. Some people feel that these will form an advisory committee. The truth is that in the world of business we require much more rounded-out advice and this is often accomplished through mentor clubs. Mentor clubs are meetings of peers who help each other with various challenges and generally share information with each other. Some of these clubs charge a fee for a facilitator to organize things.

“Another popular angle is to hire a business coach who has established himself long enough to have all the proper connections to top people. The advantage here is that all you may need is the coach himself as he has many resources of his own to draw upon. Coaches are easy to find. Ask your chamber of commerce—there are many coaches out there now and they almost always have ties to the chamber. Or ask someone you trust to make a recommendation.

“How do we ask them? They will be more than happy to give you a free session so that you can find the right fit for you.

“How are they compensated? Business coaches like myself, charge about $1,000 a month for the service.

“What can we expect from them? Business coaches will meet with you each week and help you to identify and work on the most important things. Their job is to keep the first thing the first thing.

“How do advisory boards function in general? In whatever form they are—one person or a team—the key is to focus you on the important things for your business. This means getting right to the point—why does your business exist and where do you want it to go.” —Rob Carol, Action International Canada

Go step-by-step

“We have just completed these exact steps. Let me explain our process, as we now have a stellar Advisory Council. First we defined why we wanted an Advisory Council. For us it was specific expertise relative to our business goals and qualified referrals. Guiding principle (participant commitment)—honest, critical and constructive feedback. Next, we defined what skills and experience we wanted our members to bring to the table. Part of this was determined with our first step. We have now secured domain knowledge and vertical industry experience. Then we thought of everyone we knew, or had met, during our lives who had such expertise /experience; and / or then who we knew that might know such experts. Next, we called and asked to meet. We asked for their feedback on our plan first, and then we asked if they would be interested in being an Advisor. By the way, at our first full meeting, we were able to demonstrate their initial impact—as we incorporated some of their feedback in our final plan.

“Compensation isn’t always necessary in the beginning. Many don’t expect it from smaller businesses, they consider it mentoring or part of giving back to their community. Certainly be prepared to pay any out-of-pocket expenses however. Variables initially or within a year might include: stock, options, cash, reciprocal business referrals (if appropriate).

“What you can expect, is what you ask for. Be clear about why you are asking them and what you want them to do. If they don’t ask these two questions, you should be wary of their participation anyways. Consider setting a term of commitment. We asked for a one-year commitment and have appointed a chair. As for the functioning, it will depend on your needs and expectations. Ours is very much a high-calibre SWAT team.” —Evelyn Ledsham, President, MAGNET Workforce Inc.

    Originally appeared on PROFITguide.com
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