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How to build an advisory board

An advisory board is the informal board of a company. Advisors can guide you and your new business.

It is voluntary for the entrepreneur to build an advisory board and it should only be build if you will use the advises the board can give you.

Which skills

First you have to analyze which skills you want in the company´s advisory board. Do you need competence in sales, finance, product knowledge, HR or other key issues?

When you have identified your needed competences you can start looking for members.

Generalists and specialists

It is normally an advantage with a mix of generalists and specialists in a board. Generalists may be persons with experience and overview of business operations or exports and a specialist could be a lawyer specializing in IPR.

Some members of the board should also have knowledge and experience in the work of a board.

Leaders or former leaders

Obvious topics to the board can be leaders or former leaders of successful small businesses. These candidates are practitioners who know and understand the small business problems and challenges.

Directors or functional managers

Another obvious group is directors or functional managers from major companies. These individuals often have a large network and have a specialized knowledge that the small company can not or find it very difficult to obtain by other means.

Call for candidates

Once you have identified the names you want on the board please call them. The person you call will most likely be honoured by the call - if he does not sit in 50 advisory boards in allready.

Prepare candidate speech

Prepare the "sale" of board space: What do you want to tell possible board member when you meet him or make a telephone call? Maybe you have sent the possible board member an e-mail in advance to prepare for the talk.

External assistance

You can also choose to have an external partner to call, e.g.:

• Interest Organizations
• Recruiters
• Personal networks
• Board Organizations

Public support organisations for small businesses

Normally you shall not have your own accountant or lawyer to sit on the board because they have difficulty being impartial.

Advisory board size

Experience says that a small and orderly but effective board of directors is best – maybe two to three at a start.
The Advisory Board can always be expanded when the board functions and board routines and the tasks of company management are incorporated into the company´s routines.

Board of directors vs. advisory board

The major difference between a professional board of directors and advisory board is that the advisory board has no formal power. The owner can then be completely indifferent to their advice.

Board of Directors have the formal power and can dictate direction of the company - if the owner does not own 51 % of the shares.

The critical ingredient is getting off your butt and doing something. It’s as simple as that. The true entrepreneur is a doer, not a dreamer.
– Nolan Bushnell, founded Atari (early computer) and other businesses