It is surprising to me how often small businesses do not have an advisory board; that is a group of people that serve as a sounding board to the business owner on the health of their business. As I have said here in the past, entrepreneurs are experts in what they do, but often lack an understanding about running a business, especially if this is their first business. The advisory board is one way to help fill in the gaps in the entrepreneur’s knowledge and expertise and give the entrepreneur a better chance of success.
So, let’s pretend that you are getting ready for you first advisory board meeting and you want advice on your strategy for the next year. What are some of the things that you may want to discuss with them? Here is a checklist to help you prepare.
First of all, when you are preparing for an Advisory Board meeting, you will be thinking in several areas as well as at different levels. The first question is, “Are you going to bring a plan for 6 months, 12 months or another time period? Since we are a good way into 2011 it may just be for the rest of this year. For whatever time period that you choose, you will present your plan. That plan becomes the subject at future meetings, where you will report on plan execution actuals versus the plan.
So, there are a number of things to think about:
What are your business objectives for the time period? These may be expressed in financial terms (i.e. increase top line revenues by $X) or business terms (increase active clients by X, or increase sales to current clients by X %). These objectives need to be specific so that they can be tracked.
Once you have your overall objectives, you need to analyze your objectives in terms of the affect on your business according to area:
- Financials – what is the overall affect? Will you need additional working capital? What is the affect on the important factors such as Cost of Goods, Inventory, Labor, etc? Given what you must do to make the change, will it be worth the final result?
- Labor: What will be the demand on your labor force, increased productivity? New Hires?
- Sales: How many new clients will you need? How much increase form current clients?
- What specific actions must you take to implement the new plans?
- What specific actions will other people need to take, in leadership roles to implement the plan. What must you do to support them? This step involves detailed project planning, not just a check list for each group.
Based on these questions, you can begin to formulate a plan for the coming period. What you can expect from your advisory board, and insist that they give you, is an honest appraisal of your strategy before it begins, and then critical thinking on the results that are achieved during the execution of your strategy.