About twenty-five years ago, I was involved as a principal in a group that bought property in a suburb of Chicago. We built a beautiful restaurant on the site. The menu, the staff and the brand image were all very high caliber. My career was blossoming. I had opened several successful restaurants and clubs in the previous ten year and thought I had learned what was needed to start a successful business.
The business had a very successful launch and within two years the business plummeted and was sold for about 50% of what was originally invested. We never expected such a fast loss.
Having advisers earlier would have saved me millions of dollars.
At that stage of my entrepreneur career, it was all about “my” instincts and knowledge. Emotional intelligence was not a fully acquired asset. Neither was my ability to listen to others.
Since that loss, we have built a group of advisers, consultants and peer mentors. We call the advisers and consultants our advisory board. They have helped us navigate through many obstacles such as the economic collapse and a continuing invasion in our marketplace.
The following breakdown shows how we classify each position to turn to in times of need.
Consultants
These are paid to provide a service and knowledge. They meet with staff on a regular basis to provide assistance in addressing market place shifts, compliancy with government bodies and financial planning. Some examples are:
- Sales
- Communications/Public Relations
- Marketing
- Certified Public Accountant
- Certified Financial Planner – Wealth Management
- Expert in your Market – for our business model it is one of America’s top 75 chefs
Advisers
These are providers of services that impact your business. They are not necessarily paid on a monthly basis. Their vested interest in your business may be due to other types of relationships. Some examples:
- Lawyer
- Banker
- Top Vendors (they have a great interest in your organization’s success)
- Successful Entrepreneur (you are able to learn how they “did it”)
- Academic (keep informed about what is currently being taught about your industry – and learn what bright talents they have in class for future employees)
- Insurance – agent or broker
Peer Mentors
Entrepreneurs should not be an island onto themselves. Become an outside face of your company; learn new approaches to old problems. Or better yet, learn how to address issues you haven’t yet experienced. Some examples of peer mentors:
- The leaders of your competition – there is usually enough business for everyone so discussing common themes is easily done. Find a competitor that shares the same core values and meet informally over lunch to discuss your shared market, tips to keep expenses down and industry trends.
- If your market is small or regional, contact leaders of similar businesses in other regions. Exchange staff in a work and learn process. Your staff can learn their successful programs and their staff can learn yours.
- Entrepreneurs! Participate in your local university’s entrepreneurship program. Mentor students. Meet other entrepreneurs that will allow you to just talk about the business of business.
- Join business roundtables that meet monthly and talk about mutual business concerns.
- Attend business conferences like Inc. Magazine’s series of national conferences.
Cost
Consider the cost of these associations a sound business investment and not an expense. You will receive a large return on the time and money.
Annual Meeting
Once a year all advisers and consultants are brought together for an “advisory board” meeting. They receive financial statements and strategic concerns in advance of the meeting. At our company, each person has five minutes to state their concerns for the company and advice for future movement. No compliments are permitted. If compliments are given, a bell is rung, and their time to speak is stopped. Encourage disagreement and arguments, but once you are in accord with your advisers, take swift action. Advisers like to know that their input matters and something will be done. To ignore them is to lose them. These meetings usually generate six to ten pages of suggestions, ideas and concerns to address.
Other Benefits
The most effective members of an advisory board have many clients that are larger organizations. The advisers bring solutions to issues that those companies have found to your company. They also have wide, trusted business networks, meaning they often “know” a person that can help you out in a situation. This group can promote your brand within their network. They can also help with recruiting staff that mirror your culture.
What advisers would increase the performance of your organization?