Would You like a feature Interview?
All Interviews are 100% FREE of Charge
The opinions expressed by entrepreneurial contributors are their own.
Small business owners these days have a lot on their minds. Extremely high borrowing costs, corrosive inflation, a slowing economy and tight credit conditions keep them on edge.
Like any entrepreneurial bunch, you’re probably working overtime, doubling down on your efforts to make a profit, and going into overdrive mode. I have one more to-do list. Forming an advisory board.
If you’re a builder, restaurateur, online retailer, or run any other kind of small business, you need an advisory board. A relationship with a trusted advisor can help you weather recessions and economic shocks. This has happened more frequently in the last few years. Above all, uncertainty is the watchword of the year.
Related: 10 Reasons Leading Entrepreneurs Join Peer Advisory Boards
who’s on your board?
Advisory boards are typically made up of local individuals from a variety of industries who have your, and your business’s, best interests at heart. It helps solve problems, develop strategies, and even analyze regulatory changes. Why are they giving you time? One, they may directly or indirectly benefit from your business growth. They will learn from you too.
Board members are typically financial professionals such as bankers, accountants, and advisors, lawyers, and human resources professionals. You might even become a competitor if sharing industry insights is in everyone’s interest. We recommend finding someone who is affiliated with the Small Business Development Center, your local Chamber of Commerce, or her SCORE network of retired entrepreneurs.
Think of this loose coalition as your personal “Shark Tank” mentor. Mark Cuban and other venture capitalists on popular TV shows buy stakes in small companies from participants in exchange for advice, but never give them up.
Your advisory board is also your ringing board. It’s like a group of 5 to 10 of her friends who can call in for expert advice in areas they would never master on their own. Beyond advice, you can build a community around yourself that grows with your company.
RELATED: ‘I’ve had some disappointments’: Barbara Corcoran leaked ‘Shark Tank’ secrets behind the scenes
how to go about it
Once you have decided to form one, select your players. The interview process is important. Questions include: Are you able to meet face-to-face at least once every three months? It’s about laying the foundation for your business’s needs beyond the paid services your company might offer.
First and foremost, you need an advisor who will be candid with you. You should aim to get out of the silos and see the big picture — potential risks, potentially missed opportunities. Family and friends are often bad advisers because their judgment is clouded by their loyalty to the business owner rather than the business. Difficult advice can be difficult to hear, so a neutral, trustworthy voice is best.
Board members can act as risk managers, talent scouts, and trend followers. We are too busy to keep up with industry, local, state and federal regulations, from tax law changes to labor rights to product regulations. So a group of experts in the field will complement your knowledge and skills.
Today’s high-interest new normal may be new to business owners under 40. Financing is complicated. A loan might have been enough when interest rates were near record lows, but today it might make more sense to exchange stock for cash. A financial expert who works with other companies in the same industry should be able to tell you the pros and cons of each option.
In addition, advisors can help you plan ahead, for example, in the event of financial difficulties. Like any other aspect of life, it’s about maintaining an ongoing relationship that keeps you in check.
RELATED: Stop throwing money away: 5 tax benefits your business misses
too busy?think again
Small business owners may say they are too busy to add 5-10 people to their business circle.It’s important to remember that all entrepreneurs do both upon business and of business. Many focus on the latter. But as the company grows, founders need to delegate to others and spend extra time thinking about their vision and overarching strategy.
After all, as your business grows, new needs arise. Larger or more diverse companies have different tax implications. Extra profits, while nice to have, pose a puzzle: What to do with excess cash — pay off debt, invest in equipment, or invest money? Financial experts, lawyers, accountants It helps a lot if you put your head together.
You might find it hard to complain about small businesses doing well. But everything changes during the growing season. May require more real estate, equipment, software, and employees. As a result, additional funding will be required. The last thing you want to do is leave money on the table.
The Small Business Advisory Board can help you grow through these challenges. As you benefit, so do your team members.