Many small businesses have a Board of Directors to make executive decisions and to oversee the company’s various activities. Your business may or may not have a Board of Directors, but you will want to consider organizing an Advisory Board to help boost your company’s success and credibility within the local and business communities.
Advisory Boards typically consist of three to five professionals with expertise in various areas of business. Individual board members may have experience in finance, marketing, your specific industry, purchasing, or another area of business operations. An Advisory Board will give you the benefit of working with seasoned professionals whose interest lies in helping your business thrive.
Members of Advisory Boards do not profit from their work with your business. Although you may compensate the board members by covering their travel expenses, providing meals, or offering stock options or monetary payments, their purpose is to give you guidance in developing a successful company. Advisory Board members will generally be more objective than Board of Directors members because they are not seeking any return from their time and work investments. You can expect the advice from Advisory Board members to be honest and straightforward.
Advisory Boards are an excellent resource for business knowledge as well as advice. The members usually have years of experience in their field and have likely encountered many problems along the way. “Experience is the best teacher” is absolutely true when it comes to operating a business, and the lessons learned from your Advisory Board’s cumulative business experiences are more valuable than any training course, book, or lecture. These professionals have “been in the trenches” and can offer realistic and relevant advice.
You will not be the only one profiting from having an Advisory Board. Professionals that are members of an Advisory Board are part of your business because they want to be. They love what they do and want to reach out to other business owners to pass on their knowledge and enthusiasm. Advisory Board members welcome the opportunity to network with other like-minded professionals while helping business owners build or expand successful companies.
Impact on Your Business Credit Profile
One of the greatest advantages of incorporating an Advisory Board into your business plan is the positive effect this can have on your business credit profile. Your association with proven business leaders will boost your presence in the community. This can potentially draw more interest from investors and also enhance your credibility with community leaders and local lenders. Taking a strong interest in your company’s future by coordinating an Advisory Board will let others know that you are serious about your business’ success.