1) Capital is Needed. Capital is the lifeblood of every business. Whether it is personal infusions of cash, lines of credit at the bank, grants or external shareholders, acquiring capital takes time and talent. The cost of capital is real and getting money into a business can be expensive and time consuming. An advisory board is a perfect sounding board to cross check assumptions and explore all sources of potential capital before bringing money into a business. Having advisory board members that have faced similar issues can save a lot of money and time.
2) Growth prospects are unclear. Every business is in growth mode and most businesses are not lucky enough to have their growth prospects perfectly laid out for the coming 3 years. If you are in this camp, an advisory board is a great way to analyze and validate any growth objectives. Many businesses have failed trying to chase down revenue growth opportunities. Advisory boards are an ideal way to avoid trapdoors.
3) Existing mentors / advisors are not giving you what you need to grow your business. Most business owners have informal networks that they label as advisors; however, most of these relationships are not ideal. Truly independent, best-in-class advisory board members take time to identify and recruit. If you are less than 100% thrilled with your advisors, you need to set up and execute upon a formal advisory board.
4) Acquisition opportunities. If there are opportunities to grow through acquisitions, an advisory board is a must. The high majority of acquisitions fail to meet buyer expectations often resulting in devastating financial impacts. Acquisitions are a great way to grow a business, but the exploration and execution of an acquisition is time consuming and expensive – not to mention it taking away focus from the current business. Advisory boards are ideally suited to help founders / executives run an acquisition search and due diligence. Getting expert insights of business leaders on an advisory board can make acquisitions easier and more effective, plus save a ton of headaches and sleepless nights.
5) Contemplating the sale of the business or asset divestiture. Making a sale is a big decision. Most business advisors, attorneys and accountants are cheerleaders for these events because they result in additional fees. But what do your peers think? What is an unbiased opinion to exploring, pursuing and closing the sale of a business or asset? Any compensation that is paid to advisory board members will likely be minuscule compared to the value of the independent insights gained in major business decisions.
6) You are reading this post. If you are even thinking about an advisory board, you need one. Whether it is a personal advisory board to help out with work / life balance, a scientific advisory board to help your company with technology or a business advisory board, advisory boards are a great vehicle to get feedback and provide accountability.
Not sure where to get started? Let us help you out! Get our course “Assembling an A+ Advisory Board” for only $1. This $14 savings will only be valid for the first 100 students! Visit www.advisory-board.info today to enroll!
Subscribe to Blog via Email