Great Ideas for your Small Business: Create an Informal Advisory Board
the largest companies in the world have all sorts of advisory boards, but entrepreneurs are often reluctant to ask outsiders for help. An advisory board made up of industry leaders, deep thinkers, cutting-edge colleagues, and experts can steer you and your company through the choppiest waters—at very little cost.
Unlike a board of directors, which has legal and fiduciary responsibilities, advisory boards can be set up as formally or as informally as you like. You should offer to pay people a modest sum, perhaps $500, to attend one meeting every quarter or at least twice a year.
Years ago I served on a small business advisory board created by the American Express Corporate Card group.
About a dozen movers and shakers in the small business world met once or twice a year to brainstorm about new products and services, review existing products, and share our insights with company executives.
When the stock was soaring, we met in luxury hotels around the United States and were paid honoraria of about $1,000. After the opening-night dinner at one hotel, we found fluffy bathrobes and warm chocolate chip cookies and milk waiting in our rooms. A few years later, when Amex went through some belt-tightening, the meetings were held at a hotel across from their corporate headquarters in down- town New York City.
I’m not saying you have to fly people around the country and put them up in fancy hotels to obtain free or affordable advice. No matter where we met, we provided good consulting services for very little money. As board members, we did a lot of networking, learned about each other’s companies and organizations, and enjoyed some very lively discussions.
If you are in a manufacturing company, for instance, try to assemble a board with representatives from your major suppliers, a marketing expert in your field, a retired executive with experience in your industry, and perhaps your accountant or attorney.
Create an agenda, depending upon what you need to focus on at that time, but always start with a quick overview of what’s happening at the company. Provide the details in writing, including a current balance sheet, new company brochures, and anything else that you think your advisers need to know.
After you’ve presented the facts, sit back and listen to their comments. Rely on your “kitchen cabinet” to keep you hon- est. They will certainly have a different perspective on your situation and often come up with objective solutions. Look for advisers who will help you take the pulse of your industry and monitor your competition. There’s nothing better than feeling supported by a group of people who believe in what you’re doing.
We have always relied on a core group of advisers to keep SBTV Corp. on track. My uncle, Steve Coan, a retired partner in a major Wall Street brokerage, is one of the smartest people I know. He’s a whiz with numbers and terrific with personnel problems. One of my best friends, Kathy Taggares, is one of the savviest business people I’ve ever met. She’s my strategic adviser. Although she isn’t an expert on the news business, she is incredibly street smart, and I never negotiate a deal without her input.
Andrew Hurwitz, a dear friend who is a highly respected entertainment lawyer, has been steering me in the right direction since we founded SBTV (Small Business TV) in 2000. For television production challenges I turn to Isabella Rupp, a veteran director. My husband, Joe, my most trusted adviser, tackles the toughest problems. He’s the ethical director, responsible for weighing the ramifications of every project we accept. Be- cause I’m a working journalist, it’s imperative that none of our other projects conflict with my day-to-day responsibilities to serve small business owners.
Whereas this kind of informal kitchen cabinet is essential, you might also consider establishing a customer advisory board. Dr. Tony Carter, a professor of sales and marketing at Columbia University’s Graduate School of Business, surveyed seventy Fortune 500 companies. He found that twenty-one of the companies surveyed had customer advisory boards, and nineteen of those twenty-one said they were extremely useful.
For example, both Swissötel and Avis Rent-a-Car created women’s advisory boards to help tap into the growing women’s travel market. Based on recommendations from its board, Swissötel has offered special services to women business travelers. They offered good seats in restaurants serving lighter, healthier spa-style cuisine, and the health clubs have extended their hours of operation to fit the women guests’ busy schedules. According to Susan Stautberg, a New York City consultant who helps companies create advisory boards, Avis is also trying to make women feel more welcome by lowering sections of the check-out counters and making the office areas bigger. “Avis wants to stay ahead of where the customer has gone,” said Ron Masini, vice president of product development. “If we hadn’t used the women’s advisory board as part of our process, we would have missed some important hot buttons regarding the best way for Avis to serve the female business traveler.” So think about inviting some savvy experts and customers to provide invaluable advice to you and your staff. It will be money well spent.