bmw rental chicago Annawan .. Chicago Drug testing

The Advisory Board: A Business Owners Most Valuable Resource

As a company grows, the owner's role begins to change. More and more of the owner's time is spent "in the shop or in the field" handling day-to-day operations rather than focusing on high-level planning and strategic issues.

As a result, a company often reaches a plateau and finds it difficult to continue growing. This may be the time for the business owner to consider creating an outside board of advisors.

Owners that do not use a functioning outside board of advisors are missing out on a tremendous opportunity to improve the management and profitability of their company. An outside board can provide business owners with valuable advice from individuals with years of business experience.

An outside board of advisors can also play an important role in the helping a business owner design and implement a long-term strategic business plan.

In addition to serving as a sounding board, a board can help monitor and improve business performance by:

? Networking to bring in new business

? Reviewing financial statements and audits

? Reviewing corporate mission and strategy

? Reviewing and approving budgets

? Monitoring business performance

? Making recommendations regarding major capital expenditures

? Assessing organizational structure and policies

? Approving acquisitions and mergers

? Approving major debt transactions

? Lending credibility to the company as it targets larger accounts

Initially, business owners may be reluctant to involve an outside board in what had always been private business affairs. The owner may fear the interference of outsiders or having strangers involved in the "family business." Even if an outside board is created, the worried owner may not allow the board to function in a meaningful way. The owner may be inclined to select long-time friends, advisors, or subordinate employees to serve on the board. Unfortunately, these folks do not have the independence needed to provide the owner with the objective advice he or she needs to hear. Alternatively, some owners create a board, but never hold regular board meetings. Other business owners feel threatened by their boards and only consult them on trivial matters. When this is the case, the board of advisors can rarely, if ever, provide any value and should be disbanded.

Creating an Outside Board of Advisors

If you are thinking about assembling an outside board, consider the following.

Develop a Statement of Purpose for the Board. The business owner should meet and decide what role(s) the board will play vis-?-vis company management. The end result of this process is a written, comprehensive statement of purpose for the board.

Decide on the size and scope of the Board. Ideally a board of advisors should be small enough to be productive. We recommend that a board be made up of between 3-5 people. If the board is much larger than this it becomes difficult to manage.

Decide on Characteristics of the Ideal Board Members/Advisors. Spend some time deciding what types of individuals you want on your board. Some owners decide that experience in the company's industry, or a similar industry, is a prerequisite. You may also want to include someone older and someone younger to represent the values of more than one generation. Some business owners value having members with different professional backgrounds (i.e., lawyer, business operations, accounting, business sales.) You may also want board members who can help with a specific strategic project (e.g., if you are planning to expand into a new market you may want a board member who has successfully run a business in that market).

Prepare a Member Prospectus. You should prepare a "Prospectus for the Advisory Board," to help screen and recruit board candidates. The "Prospectus" explains the purpose and goals of the board. It also lays out details like the board structure, time demands, fees to board members, and meeting schedules. Finally, it describes the capabilities, qualifications, and characteristics that the company is seeking in board members. The Prospectus need not be long. One or two pages are usually sufficient.

Identify Possible Board Candidates. If you are like most business owners, your first instinct may be to invite close friends and trusted advisors (i.e., your lawyer, CPA, or banker) to serve on the board. You should resist this urge whenever possible. The best board members are usually fellow business owners, entrepreneurs, business peers, and retired CEOs or CFOs. There are a large number of these people eager to serve on advisory boards. Many former business owners and retired executives are willing to serve on advisory boards for a nominal fee, simply to stay involved in the business world. These types of outside advisors have often faced many of the hurdles that lie ahead for your company and can offer you invaluable advice.

Meet with Candidates. You should meet with and interview each board candidate. You should explain your company's needs and ask about the candidate's qualifications to help you meet those needs. Always be certain to check references.

Ensure Support from Owners and Managers. Before you make an offer to someone to become a board member, have the candidate meet all of the shareholders and key managers to make sure that everyone feels comfortable working together. Minority owners and key managers should be able to express their opinions about the candidate ? both positive and negative ? but you should have veto power.

Fees and Costs

Board members deserve to be paid, but an outside advisory board does not need to be expensive. Often for less than the cost of hiring a business consultant, you can have a fully committed and dedicated outside board of advisors. The cost of an outside advisory board is usually broken down into the following components.

The Cost of Setting Up the Board. This can be as little as nothing if you organize and set up the board yourself. On the other hand, if you choose to use a firm that specializes in helping business owners set up advisory boards, they expect to be paid. Their compensation can range anywhere from a flat fee to a fee that is similar to that of an executive recruiter. Under this scenario they are paid a percentage of the total compensation that is paid to the board.

Annual Board Fees. These are the annual fees that are paid to each board member. These fees compensate the board members for the work they do behind the scenes, networking on behalf of the business, reviewing plans and documents, brainstorming, and generally being a resource for the business owner. For middle market companies, these fees range anywhere from zero to as much as $20,000 per year. The average seems to be around $12,000 per year per member.

Meeting Fees. In addition to the annual board fees, it is common to pay a board member for the time invested in attending the actual board meetings. This is intended to compensate the member for his time and expense in attending the meeting. For middle market companies, meeting fees range from zero to around $1,500 per meeting. The average meeting fee is approximately $500.

As a result, assuming the averages presented above, and an outside board of five advisors that meets four times per year would be as follows.

Obviously, this is only a rough indication. In many cases the costs are much lower than this. In a few cases, the costs are higher. Use this as only a starting point.

Consider deferring the specifics on a board member's compensation until after you've selected the member. It is important that members do not join boards simply for the pay. As an owner, you want to see that working on the board is something a board member will find fun and exciting to do. Share your business goals and objectives and see if the person responds enthusiastically. Then discuss the specifics about compensation once you have found someone who is excited about your company and shows an interest in serving on your board.

Author Bio: Rich Jackim, former Wall Street attorney and experienced investment banker has helped over 60 business owners successfully exit their companies and realize their personal goals. He is the author of the recenly published book, "The $10 Trillion Opportunity: Designing Successful Exit Strategies for Middle Market Business Owners." Available at Rich is the president of The Christman Group LLC, a boutique investment bank that specializes in selling privately owned businesses. Visit to learn more.

Rich received his BA from Colgate University, his JD from Cornell Law School, and his MBA from the Kellogg Graduate School of Management. He is a sought after speaker and has either published articles or been quoted in Business Week, Chicago Tribune, Chicago Daily Herald, Indianapolis Business Journal and numerous other regional and national publications.

In The News:

Local law enforcement is investigating the theft of nearly 100 beehives -- each reportedly holding more than 50,000 bees -- from an orchard in northern California.
An earthquake initially measured at magnitude 4.6 struck near Barstow, Calif., on Friday night, followed by two aftershocks, according to reports.
Archaeologists have unearthed stunning rock carvings showing an Assyrian king paying tribute to his gods with a procession of mythical creatures.
A photographer in the U.K. snapped pictures of what's been described as possibly "the fattest squirrel in the U.K." And the minuscule mammal can't stop eating.  
Saturn's moon Enceladus has an even better chance of supporting extraterrestrial life than previously thought: researchers have discovered its oceans are more complex than first believed.
The Roman city of Pompeii was devastated following the eruption of Mount Vesuvius in 79 A.D., resulting in the deaths of approximately 2,000 people. A new study, however, suggests that some of the victims suffered a much more gruesome death than others.
A mummified Egyptian priest has come to life, sort of, some 3,000 years after his death through the mimicking of his voice. 
An exploding star blazed to life 240 million light-years away in the Perseus constellation may have consumed its dead neighbor, new research shows.
For the first time since opening its doors 10 years ago, the Titanic: The Artifact Exhibition in Las Vegas has unveiled never-before-seen artifacts that help paint the picture of the historic shipwreck.
The global treaty that protected the Earth's ozone layer did more than just maintain a crucial protective covering for our planet.

Pressure Washer Companies and Steam Cleaner Maintenance

If you run a pressure washing business it is a... Read More

Using Holidays to Put Some Extra Cheer in Your Cash Box

No matter your age or station in life, we all... Read More

Secrets Revealed To Having The Most Professional Staff On The Telephone!

Do you have all the customers your business can use?The... Read More

5 Small Business Management Questions to Help Choose Marketing Programs

As small business managers, we juggle limited resources in a... Read More

Selling Your Business, Entrepreneurs Role

$elling $elling $ellingWhat makes a great sales person? Well, the... Read More

The Misconceptions of the Value Of Disclosures in Franchising

Disclosure laws in franchising are suppose to help the consumer.... Read More

What are the COSTS Associated with joining Leads Groups?

When it comes to cost, how much can you afford... Read More

Choosing A Business Thats Right For You

Q: I really want to start my own business, but... Read More

Debt Collection Techniques

Here are some sound debt collection techniques that can be... Read More

How to Integrate Yourself in Someone Elses Business

When do you need to get more involved with the... Read More

Freelance Tips: How to Cope with Spring Fever When Theres Work to Be Done

We all know how glorious those first warm days of... Read More

Starting a Small Business: Balancing Risk and Reward

In a perfect world, starting a small business would be... Read More

Don?t Quit Before You Get to the City!

We were more than excited. Our women's doubles tennis team... Read More

Finance Your Small Business: So Much Money, So Little Time

$37.4 million funded from venture capital today. $86.4 million funded... Read More

Consistency Builds Trust

You know your prospects need what you sell. You know... Read More

Do You Love Food? - Then Maybe Opening a Restaurant is Not Such a Crazy Idea

The restaurant industry in the United States employs an estimated... Read More

How Disabled Veterans Can Win Government Contracts

The Service-Disabled Veteran-Owned Small Businesses (SDVOSB) is a program that... Read More

Window Cleaning Business Start Up

Should you buy a business opportunity or Franchise if you... Read More

Small Businesses With Work Trucks; A Warning

If you are a non-operator owner of many work trucks,... Read More

Is This The Way Its Always Been Done?

Let's face it, we all tend to get stuck in... Read More

How To Select a Franchise

Here are some useful tips on how to select a... Read More

Implementing an Internship Program

CONSIDERING COMPANY NEEDS: In identifying your needs for the internship,... Read More

Pressure Washing Business Case Study, Tractor Cleaning

So often small service businesses fail to exploit niches, which... Read More

Sex Up Your Business Growth

A top executive called up me late in the night.... Read More

Small Business Opportunities And The Tens

You may find this Newsletter a little long winded but... Read More

second floor extension rje home remodeling lake forest ..