Advisory Board or Red Wine Club?

By Chad Stamper, Director of Technology Commercialization, Illinois Small Business Development Center

As entrepreneurs we need a trusted group that can support our business decisions and development. Many will establish an Advisory Board to fill that role.

Why establish an Advisory Board

There are at least three good reasons to set up a board. The first is the injection of needed expertise. The second, a board functions as a stamp of approval in the eyes of partners and potential investors or bankers. Finally, it can help to strengthen business leadership. Better decisions are often made with wider input.

Barriers

The idea that a board may strongly influence our business might actually be a deterrent. We are driven by, the urge for freedom. It is easy to feel that a board will limit us, but this fear is generally unfounded. We may also be apprehensive about the costs in time and money involved. This does not have to be the case, as most advisory boards serve for free. Following are examples of advisory board structures.

Ad-Hoc Boards

Gather a group of people for an informal, one-time gathering with just a single point of discussion. Repeat the meeting with different people in order to get various inputs.

Red Wine Clubs

Organize meetings with the same group in which different topics are discussed each time. Meetings can take place over a cup of coffee or a glass of wine and can be rather informal, yet still yield similar feedback and input as a more formal board.

Advisory Boards

Advisory board meetings are more formal and, in many ways, function as a professional board. The main difference is that the former has an advisory function, rather than a control function, and has no legal responsibility.

Who will be on the board?

One should carefully consider the type of people needed. It may be a person with specific academic, industry, or subject matter expertise. It can also be a person with a network of customers or suppliers, or whose authority will help enhance the business’ credibility.

Board without fees

There are many reasons why competent people want to sit on boards. For some, their motivation is to help others and they will donate their time in exchange for the experience. Others will consider it prestigious to be invited, or perhaps some will welcome the possibility of networking with other members.

Do it your way

As an alternative to a board, the same skills might also be obtained by consulting with a mentor, start-up coach or professional advisor. There are people out there that possess the knowledge needed to take your business to the next level, and there are many ways of getting them involved and invested in our business. To discuss establishing a board, contact Chad Stamper at cstamper@bradley.edu or (309) 677-4432. 

This article/post is an excerpt of an article by GrowthWheel® International Inc. The full article and other GrowthWheel tools about advisory boards can be obtained from the author.