Creating an Advisory Board to Help Your Struggling Business

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When your business is struggling, it can help to create an advisory groupĀ of experienced businesspeople. This is important because, even if you do a reasonable job of separating your ego from your business's problems, your advisers are likely to be more rational and, if you choose well, collectively more experienced and business savvy than you are. In other words, this really is an instance where a group can arrive at a better decision than an individual.

There is no one-size-fits-all rule for establishing an optimum advisory group, but we favor keeping it small, with three to five members. If your business is incorporated, some or all of the people on your board of directors may be well positioned to play a role as an adviser. If board members don't have the necessary skills, or you don't have a board because your business is a sole proprietorship, LLC, or partnership, you'll need to look elsewhere. Try to find:

  • Experienced small business people in your community who you know and trust and who, in turn, respect your business.

  • A loyal customer with deep business experience who values your business and is willing to help. Every business worth saving has supporters. Don't be afraid to enlist yours.
  • An objective, business-savvy family member with the time and desire to help.
  • SCORE, a nonprofit organization that provides free in-person and online mentoring to small businesses. Check out what they offer at www.score.org.

It's best to approach each potential mentor personally and explain that your goal is to have a group of objective advisers who will meet with you periodically to review your business and financial plans. If you'll need a considerable time commitment in the beginning (for example, a full-day meeting followed by monthly two-hour sessions), make this clear up front. Offering to pay a small stipend per meeting or per hour will be appreciated even by people who don't need the money, because it tells them you value (and won't abuse) their time. If your finances are too tight to afford that, consider offering some other form of compensation, such as free products or services, or, if you are incorporated, a small stock grant.

by: , J.D.

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