Advisory boards: an untapped resource for businesses.

Online since 19.10.2016 • Filed under Industry news
Advisory boards: an untapped resource for businesses.

Earlier last year I attended a conference with Robert KiyosakiMasters of Wealth Seminar’ in Johannesburg. Kiyosaki spoke about choosing the right “Tribe”, a possible team of like-minded people to hang out with. He mentioned that the team should consist of an accountant, an attorney, a real estate broker, a banker and your business partner. This formed part of the inspiration for a team of us at The Hope Factory to implement the idea of establishing advisory boards as part of our entrepreneurial development programme for Enterprise and Supplier Development within the context of B-BBEE. In our instance however, we included a Business Mentor in this team.  

An advisory board is a group of individuals who provide know-how and strategic advice to a small business’ co-founders, managers, and board of directors. Small businesses should choose people with the skills, experience and/or connections to help them grow their business. Advisory board members with contacts in the industry are of very high value to the business. When choosing the advisory board, try to find experts with different skills and experience to the founders.

How an SME can benefit from setting up an advisory board

As a business grows, the entrepreneur hires staff. Regardless of the number of employees, size, structure or complexity of the organization, accountability for the company’s success rests mainly on the shoulders of the entrepreneur.  A board of advisors will benefit the entrepreneur as follows:

  • They become the sounding board
  • They focus on the big picture - strategic issues and industry and market trends
  • They provide objective advice and contribute to strategic planning
  •  They are able to facilitate introductions to potential suppliers, customers, and so forth.
  • Experienced board members help you to avoid old mistakes.

How can an advisory board provide strategic advice?

Advisory boards provide valuable inputs to business structuring and management, and may also provide the latest industry news. They offer guidance and advice on operations, legal matters, finance, manufacturing, organization and the competition to benefit the business.

One of the biggest advantages of an advisory board is that it provides a fresh perspective by looking at the business from an unbiased point of view and identifying strengths and shortcomings of business policies that the owners/management of a company cannot often spot.

The best entrepreneurs use advisory boards with subject matter experts to fill gaps of knowledge. Advisory board members are not directors in the traditional sense. They do not serve a governance function or represent shareholders or other stakeholders. They simply provide advice to the entrepreneur about achieving current business goals. And this is what we at The Hope Factory have launched earlier this year for our entrepreneurs. It was extremely well received, and the feedback was unanimously positive from both entrepreneur and advisory board member alike. We will hold our next session at the end of the year, and anticipate great impact and exposure for our inspirational entrepreneurs.

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