How An Advisory Board Can Help Your Business

Introduction

Running a business is no easy feat, especially when you're trying to navigate the challenges of a constantly changing market, customer demands, team development, supply chain, cashflows, health and safety, compliance, the list goes on!

As a business owner, you're responsible for making critical decisions that can impact the success or failure of your company, which in turn has a wider impact on your team and the community in general. Sometimes it feels like the pressure never stops, then throw in a cyclone like we’ve just had and the pressure can ramp up.

This is where an advisory board comes in handy.

An advisory board is simply a group of people who provide guidance and support to a business owner or management team. They offer an independent view of the business and its operations, which can be invaluable when it comes to making important decisions. In this article, I'll discuss the value of an advisory board for small businesses, drawing insights from the New Zealand Institute of Directors and business.govt.nz

The great thing about advisory boards is that you can structure them however you like. For most of the advisory boards I’m involved with, external members may be the accountant, an industry expert, a health and safety support, a business advisor and a senior leadership team. It might be all of that, just one of those members with the business owner, or a combination of members. There is no one size fits all, just what is best for your business at any given time.

What Can An Advisory Board Offer?

What Can An Advisory Board Offer?

Independent View

One of the primary benefits of an advisory board is that it provides an independent view of the business. Business owners and senior leadership teams are often too close to the company to see the bigger picture. An advisory board can provide an objective viewpoint and help identify blind spots. This can help a business avoid costly mistakes and make more informed decisions.

Support

The support provided by an advisory board is another valuable feature. Running a business can be a lonely experience and having a group of folks to bounce ideas off can be invaluable. An advisory board can provide advice, support, and encouragement when it's needed most. This can help business owners stay motivated and focused on achieving what it is that they need to do. Sometimes that might be as simple as a ‘vent’, or it might be more structured with a formal meeting rhythm, similar to a board of directors.

Support Around Decision Making

An advisory board also provides structure to the decision-making process. When faced with a difficult decision, it can be challenging to know where to start. An advisory board can provide a framework for decision making, helping to ensure that all the relevant factors are considered. This can lead to better decisions and improved outcomes.

Varied Skills & Experience

A quote I read a long time ago but has always stuck with me said (or words to this effect), "If you’re the smartest person on your team, your team’s in trouble." (I think it's a Henry Ford quote). So another valuable feature of an advisory board is that it can add skills and expertise that may be lacking in the business. An advisory board can provide access to these skills and ensure that the business has the support it needs in critical areas.

Benefits To Your Business Of An Advisory Board

Benefits To Your Business Of An Advisory Board

Clarity

There are numerous benefits of having an advisory board, but I think one of the most significant advantages is the clarity it provides. An advisory board can help clarify the goals and objectives of the business, which can be especially important for businesses that are just starting. This clarity can help business owners stay focused on what is important and avoid getting side-tracked by less critical issues.

Better Decisions

Another benefit of an advisory board is that it can lead to better decision making. By providing an independent view and objective advice, an advisory board can help ensure that decisions are well-informed and well-considered. This can help the business avoid costly mistakes and make decisions that are in the best interests of the company. Sometimes a business owner just needs to hear a contrary view that can allow them to consider things in a different way.  

Managing Risk & Compliance

An advisory board can also provide a valuable overview of the risks and compliance requirements facing the business. This can be especially important for small businesses that may not have dedicated staff to manage these areas. By providing an overview of these issues, an advisory board can help ensure that the business is meeting its legal and regulatory obligations and avoiding any unnecessary risks.

Avoiding Or Managing Conflict

For businesses with multiple directors or even a family owned business with a number of family members , an advisory board can be especially valuable. It can help ensure that everyone is on the same page and working towards the same goals. This can help avoid conflicts and ensure that the business is moving forward in a coordinated and effective manner.

Increased Profitability

Finally, an advisory board can help improve the profitability of a business. By providing guidance and support, an advisory board can help identify opportunities for growth and improvement. This can lead to increased revenue and improved profitability, which is essential for the long-term success of any business.

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