Assembling a great advisory board is easier than people think. In fact, some of you have advisory boards, or are board members yourselves without knowing.
Consider this: do you have a senior friend who you run things by before taking major business decisions? If yes, that person is an advisory board member. Forget titles – think substance. You just haven’t structured your board yet.
Let’s talk about some practical considerations for setting up your board:
1. Who should be on your board? Ordinarily, you should aim high and shoot for the most prominent people in your industry. If you don’t have the connections, you must work with what you have. There must be someone you know and respect in a related field that you can talk to. Remember, an advisory board is sort of informal so it’s a
mentor-mentee relationship.
2. Where will you find these people? Old bosses from places you’ve worked is usually a good place to start or more experienced people you’ve done business with before (customers, suppliers, etc). If you sell actively on social media, you can pick from people here who you have decent relationships with. For example, Duna Omowumi is a well-known and likable masseuse on Facebook. I think she can get all her board members right on Facebook – if she wants. One of the many reasons you shouldn’t be abusing everyone on social media🙂.
3. How do you pay them? Advisory board compensation is dicey. A Canadian study found that 57% of all advisory board members in Canada are unpaid. You know why? Because a lot of accomplished people love to give back! Many successful people want mentees who they can groom. Remember that this person is from your existing network, so it’s possible they will be willing to do it for free – for a while at least, especially when it’s clear you are serious. After you’ve stabilised, you can consider paying a token sitting allowance for every meeting (which is usually quarterly). Alternatively, some offer 0.1% to 1% equity share of their business in exchange. Its very flexible and depends on the strength of your relationship.
The first step is to approach a prospect. This is like selling to a customer. You want to frame the conversation as a form of business mentorship relationship. The response may not come immediately, or you may be turned down. It’s all part of it. When we were selecting board members for Sycamore, we chased a top executive for months just to get a meeting and be rejected. It turned out to be a blessing because the person we eventually got, opened some pretty big doors for us. The second step is to send an appointment letter (plenty free templates online to help with this). Agree on periodic meeting times, and get to work.
You also want to have small but odd number in the event of a vote. I’d recommend a board of 3 people, so that it’s nimble enough for everyone to contribute effectively.
This thing is not a big deal. Don’t let anyone tell you that it is theoretical and for big businesses only. You don’t plan to stay small forever do you? Now go ye forth and execute.
