Grow your contractor business: Get an advisory board
March 25, 2014 by Brynna Leslie
Small businesses that added an advisory board grew an average of 67 per cent in just three years, according to a new study by the Business Development Bank of Canada.
Currently, however, just six per cent of small and medium-sized enterprises (SMEs) use one.
“Most entrepreneurs work so hard in the business, day in day out, fighting the fight, that they don’t often take the time to stand back and see the value of people helping them work on the business, and think about the future of the business and the kinds of moves they’re making,” Jean-René Halde, BDC’s president and chief executive told the Financial Post.
It’s a similar message put forward by Mike Draper of Renovantage in an interview with Canadian Contractor publisher Rob Koci last month.
Draper noted that contractors who spend too much time working in the business find themselves working too many hours, which hinders rather than helps growth.
The BDC study found that 57 per cent of the 1,000 business owners surveyed thought setting up an advisory board would take too much work and time.
And yet, it’s hard not to make the time.
Between 2001 and 2011, “the average sales of businesses that had an advisory board were 24 per cent higher than a control group of similar businesses,” reports the Financial Post. Furthermore, businesses armed with an advisory board were 18 per cent more productive than those without.
If you want an advisory board, where do you begin? Start by thinking of people that will add value to what you do. They may be friends you trust to bounce ideas off; other small business owners from different industries; even your accountant.
Your advisory board should be as diverse as possible, with each member bringing something unique to the table.
It may help to think of the different aspects of your business where you may need help – marketing, financing, or legal. You want people whom you trust, but also those who have specific expertise and, just as important, influence to broaden your networking circles.
Advisory board members are casual and don’t have any fiduciary responsibility to you or your business. It may just be a group of people that you gather together every few months or so, or a handful of people that you can count on to receive a phone call once in a while when you have a question about planning.