Whether you are a "lone wolf" entrepreneur or part of a family dynasty, every business person can benefit from the impartial advice of a peer.
Personal advisory boards are one of the hottest trends in small business today. Setting up a group of friends or colleagues who meet periodically to offer wisdom and support can expand the size of your management team without increasing your payroll costs. It can also bolster your legitimacy and increase the value of your company.
A personal advisory board can range from an informal group of trusted friends to a more formal peer-to-peer mentoring group.
Gary Collins knows advisory boards. Mr. Collins, who has 20 years of experience in executive management, is a managing partner at Toronto-based 4Growth Inc., which provides management services to businesses. Mr. Collins launched the Canadian operation of Internet pioneer McAfee Associates in 1994, and by 1997 it was designated the highest performing worldwide region with $60-million in revenue.
Later, as co-CEO of Pomegranate Media Inc., Mr. Collins built and sold a successful marketing services business. He was also vice-president and general manager at NexInnovations Inc., a technology services provider, where he managed a $300-million region.
A native of Sarnia, Ont., Mr. Collins has a bachelor's degree from York University.
Earlier, Mr. Collins took your questions about advisory boards and small businesses.
Dave Michaels, globeandmail.com: Hello Mr. Collins, and thanks for joining us today. To get things off the ground, I have a few basic questions. How does an entrepreneur approach other business people and ask them to give their valuable time and expertise to someone they don't know? What's in it for them? What kind of pitch should you give?
Gary Collins: To begin, create a list of 20 influential people you know. Ask these people to provide an introduction to key people whom you think should be on your advisory board. Once you have connected with potential board members, invite them to discuss opportunities over lunch or dinner.
Your advisory board members can benefit through stock and/or stock options, or through an hourly rate (offer in the $100- to $300-per-hour range). This is in addition to the opportunities for sharing their experiences, giving back, and career networking.
Before you meet, be sure to prepare a strong pitch, including a professional presentation of your current business and your vision for the future. Outline the gap between your current business and where you want to be, and highlight the ways that your advisory board members can contribute to closing this gap. Preparing this pitch will also help you to define the needs, skills and experience necessary in your advisory board.
Dave Michaels, globeandmail.com: What should be your ratio of people you know to people you don't? I'm guessing you might get more honest feedback from people who aren't your friends.
Gary Collins: There is no specific formula for the mix of friends and independent board members. Regardless of the mix, the objectives are the same - leverage the experience of your board members, gain independent advice, and leverage the board's ability to reach your target markets and help grow your business. Ask yourself the question "will this board have the ability to close the gap between my current business and achieving my vision?"
Theo Zivo from Canada writes: While the idea of advisory boards is to have access to many minds with different resumes, there exists a very real danger that a leader may only choose those who mirror their own experiences. The result is a boardroom of useless sycophants. (For the record, I've seen this in action more than once and the result was disastrous.) The alternative error (which I believe President Obama may be making) is to fill your advisory board with so many contrary minds that consensus is as elusive as the holy grail. How does one go about creating a balance?