In a number of small to medium sized businesses it is not unusual for the owner/president to be doing everything; personally overseeing every detail of his/her company. The common retort when asked why they are involved in everything tends to be something like: “I don’t have time to train them” or “nobody is as committed to the business like I am” ultimately “They don’t work as hard as I do”.
All these may be or more likely become true. The sad truth is for an owner stuck in this cycle they become their own limiting factor for success; their business is completely dependent on the owner working inordinate hours doing everything to keep the business going. This limits the company’s ability to grow and often causes the company to ultimately fail.
It does not have to be this way.
Many companies have successfully traversed through this stage of their company’s evolution; it takes hard work and commitment but it can be done and the rewards are significant. The company’s valuation goes up dramatically as does its saleability. Effective, concrete reasons to put the effort in to evolve the business, why then do many business owners not get their business to the next level? For most they do not even see the need – they keep doing what got them their initial success.
It often takes outside objectivity to get their attention.
One relatively easier way to facilitate the evolution of a company is through establishing an Advisory Board. It still involves hard work on the part of management but the rewards can be substantial. In a recent study the BDC commissioned they found that from 2001 to 2011 the average annual sales of businesses that had advisory boards were 24% higher than those of comparable companies, productivity was 18% higher and in the 3 years following establishing an advisory board sales grew 66.8% vs 22.9% over the previous 3 years – all compelling financial reasons for creating an advisory board. Further, the Advisory Board composition can and should include expertise beyond the capabilities of the owner usually this expertise can include; finance and/or accounting, sales and marketing, human resources and operational expertise. On average a board has five people and while they do not have voting rights nor do they have the accountability of a Board of Directors they can advise effectively and are a meaning sounding board for the owner.
According to the study, the leaders believed the benefits brought by the advisory board more than compensated for the effort required to set them up and would not hesitate to do so again.
Plutus Consulting Group