Assembling an advisory board
Who are prime candidates? How often should they meet? What compensation should they receive?
(FORTUNE Small Business) -- Dear FSB: I am interested in starting an advisory board for our company, Mulberry Copy Center Inc. Who would be prime candidates for this board? How often should they meet? What compensation should they receive?
- Jeffrey Long, Lakeland, Florida
Dear Jeffrey: Creating an advisory board is a terrific way to strengthen and grow your business, says Jill Kaufman, program manager of the Advisory Board Council, an economic development program started in 2003 with funding from Orange County, Fla.
The program matches small companies with volunteer board members. Overall, the businesses involved in the program have reported a 41 percent increase in sales as a result of their involvement, according to Kaufman.
"Advisory boards can assist a business owner in formulating a strategy for the most profitable way for the company to proceed," Kaufman says.
Boards usually consist of members with backgrounds in finance, legal, and management issues, and with experience in your company's industry.
"Most boards really need someone who is skilled at marketing," says Bob Shephard, Director of SCORE Central & the North Florida District at the Disney Entrepreneur Center in Orlando, who has also served as a member of advisory boards. "The problem with many, many companies is not understanding what true marketing needs are versus sales."
"Look for advisors who are well-seasoned, with many years of experience," says Kaufman. "Aim for the top. It's often those very established professionals that have the time to give back."
A practical meeting schedule for advisory boards is about every six months, but be sure to keep the lines of communication active in between meetings with progress reports via e-mail and questions about any "homework" board members might assign.
With a board of directors, members have a fiduciary responsibility to the company and are generally well compensated, Kaufman explains. Compensation for advisory board members is "much, much less," she says.
"Just enough to get their attention," Shephard advises.