How to Develop a Successful Board of Advisors (...and Why You Should!)

Written by Eric Graham

Continued from page 1
  • Look for a proven track record. Findrepparttar leaders in their field. The best board candidates are successful CEOs, business owners, professionals, university professors and consultants who have achieved success in their own businesses and careers.
  • Clearly communicate your goals and objectives. Invest time in talking to and meeting with potential members. Communicate to them what your goals and objectives are. Let them know that you are not looking for “yes men” and that you want advisors who will challenge you and hold you accountable for your businesses growth.
  • Board Compensation Board members expect and deserve to be compensated for their time, efforts and advice. Typical advisory board compensation includes a stipend from $5,000 to $25,000 per member, per year. Some companies pay their board members per meeting, with payment ranging from $500 to $3,000 per meeting, with a monthly retainer of $500 to $2,500. Companies should also cover transportation, meals and lodging for members when attending meetings. Most successful boards also give or require members to buy stock or some form of equity inrepparttar 149174 company. This givesrepparttar 149175 board members equity participation and a vested interest inrepparttar 149176 growth ofrepparttar 149177 company. Pitfalls to Avoid Some potential problem areas to avoid when setting up or working with your advisory board are:
    • Members missing meetings. Because board members are usually running successful businesses of their own, they may not always be available for every meeting. However, board members should be made aware that attendance of board meetings is important and expected. If a member is chronically absent,repparttar 149178 value of their membership onrepparttar 149179 board should be reviewed.
    • Insecurity of senior managers. Some company insiders may feel intimidated or threatened byrepparttar 149180 involvement of outsiders. The CEO or owner must make every effort to communicate to his staffrepparttar 149181 benefits and importance of having a board of advisors.
    • Incompatible personalities. This is a challenging situation, because most members of your board will be strong willed, achiever types, who have gotten where they are by taking charge. Many will have strong convictions about their opinions and may find it hard to deferrepparttar 149182 leadership ofrepparttar 149183 meetings torepparttar 149184 CEO. You must determine when a member’s personality is “too strong” and becoming disruptive.
    • Excessive number of board members. Because of their strong personalities, if you have too many members on your board,repparttar 149185 more assertive members often dominaterepparttar 149186 debates, depriving you ofrepparttar 149187 contributionsrepparttar 149188 quieter members may have made.
    • Lack of CEO communication. Withholding company information or not regularly communicating withrepparttar 149189 members of your board of advisors destroys trust and effectiveness. Regular communication between meetings is essential to maintaining an effective board. Inadequate compensation. As I mentioned, you do not want compensation to berepparttar 149190 determining factor in a candidates membership on your advisory board, however successful individuals ofrepparttar 149191 caliber you seek expect to be fairly compensated for their time and knowledge.
    Keys to Board Effectiveness
    • If you build it, use it. Owners and CEOs who investrepparttar 149192 time and money in creating a board should be committed to soliciting and using its advice on important issues and decisions.
    • Value their input, even when they disagree with what you want to do. Sometimes a board is at it’s most valuable when it recommends against a course of actionrepparttar 149193 CEO wants to take. If you recruit a good board, often they have already been downrepparttar 149194 path you are on, and their experience (and past failures) can help you to avoid costly mistakes.
    • Communicate with your advisors. Keeprepparttar 149195 members of your board informed about what is happening in your company and industry. Counsel with individual members onrepparttar 149196 phone at least monthly and send them information well in advance of your meetings, to help them prepare and keeprepparttar 149197 meetings productive.
    • Hold regular meetings. Most boards meet once per quarter. However, boards should meet more often during times of rapid growth or if company needs merit additional oversight and guidance.
    • Have an objective for each meeting. Your board members are busy people and their time is valuable. Makerepparttar 149198 most out of your meetings with them, by having a clear agenda and objectives for each meeting. Make sure to coverrepparttar 149199 most important items of business first, in caserepparttar 149200 discussions take longer than planned or some members have to leave early.
    Annual assessment of board performance. Periodically assessingrepparttar 149201 board’s effectiveness is a critical factor in ensuring a good return on investment. Each yearrepparttar 149202 board should set performance goals and define their criteria for success. Atrepparttar 149203 end ofrepparttar 149204 yearrepparttar 149205 CEO andrepparttar 149206 board should assess it’s performance, compared to its goals and criteria for success. Over 80 percent of all private companies are operating without a board of advisors or board of directors. Odds are your competitors do not have one. Because of this, developing a board of advisors can give your company a distinct advantage over your competition. This is particularly true for start-ups and family run businesses. There is tremendous value in receiving objective, knowledgeable advice from a board of advisors who share inrepparttar 149207 financial and equity growth of your business. I encourage you to begin recruiting your advisory board today!

    Want to improve your conversion rates? Eric Graham is the CEO of several successful online companies. Internationally recognized as a top authority on eCommerce & Website Conversion , he's an in-demand speaker & consultant.

    Visit today for an in-depth evaluation to boost YOUR websites conversion rate!

    Technology Community Helps SMBs Focus on Their Core Business

    Written by Betty Liang

    Continued from page 1

    Here’s a testament torepparttar kind of exchange opportunities that are available all around us: inrepparttar 149170 July 2005 edition of Runner’s World, there is an ad from Factory Outlets ( promoting its pre-launch site. Factory Outlets needs traffic to test its ordering, fulfillment and customer service systems and is giving away $350 worth of free merchandise in exchange for time. If you don’t believe it, pick up a copy of Runner’s World to get an authorization code intorepparttar 149171 site – and shop your heart out (the merchandise is limited, but it’s free).

    Manufacturers invest millions of dollars into marketing torepparttar 149172 SMBs and yet there has not been a centralized place where SMBs can get an aggregated listing of exchange opportunities offered by manufacturers. Until now.

    SMBxchange, Inc. is a new technology community geared to providing exchange opportunities to SMBs, including useful tools and resources to help them run their business. By this, we don’t mean resources on how to get a loan, where to get legal advice, etc. There are plenty of small business portals that dorepparttar 149173 job. The tools, resources and exchange opportunities featured on are around useful technologies that can improverepparttar 149174 way SMBs work -- perhaps even introduce products that people never knew existed. SMBxchange is a relatively new community and exchange opportunities are inrepparttar 149175 near horizon. Types of “exchange opportunities” will include: focus groups, beta programs, whitepaper campaigns – where there would be some type of incentive (free product, cash, etc.) in exchange for user feedback.

    Membership into SMBxchange is free and there is no obligation or commitment. By joining, members get access to SMBxchange newsletters and a secure members-only site where there will be a listing of opportunities that matchrepparttar 149176 member’s product interests. Members only participate in programs for products they’re interested in. SMBxchange isrepparttar 149177 first community that bridges these two audiences (SMB and manufacturer) into a symbiotic environment. This is a community that bringsrepparttar 149178 technology torepparttar 149179 SMB, and aggregates opportunities and offers tailored torepparttar 149180 SMB’s product interests.

    To join SMBxchange, completerepparttar 149181 online form at

    Betty Liang, spent most of her professional career in various marketing management positions with companies such as Ricoh, Cisco, and Oracle. She is now focused on her own small business helping other small and medium businesses advance their technology capabilities through exchange opportunities.

        <Back to Page 1
 © 2005
    Terms of Use