Both starting up and growing a business is hard work, nobody pretends it’s not but like the pain of giving birth no matter how prepared you feel you are, you really can’t imagine just how hard (or how painful) it is until you experience it yourself.
Last week Shane and I were lucky enough to attend a Deloitte Private event where we met other fast growing business owners, chatting with them is invigorating, we share a common understanding of life both as a startup and a growth business, we are all exposed to risk and as such share a fabulous basis for a conversation. Much of the discussion involved advisory boards, formal boards and governance structures within our various organisations. During the drinks and networking discussions we also spoke with others about informal advisors and the roles of our staff as support for ourselves as business owners. I asked one husband and wife couple who have owned their business together for over 10 years how the cope with working and living together – without the respite of an impartial person to bounce ideas off or vent to. Their response surprised me asking me how my partner (the lovely Steve) coped living with me working horrendous hours and travelling as my business grows – our opposing views highlighting perspective is everything.
If you are in the thick of running your own business you will know how hard it is to maintain a social life, juggle family and friends, read anything that isn’t industry related, meet anyone who isn’t a potential customer / investor / supplier / team member ie: your time is precious, so who you engage as advisors is just as important as choosing staff (although it’s slightly easier to get rid of advisors if they don’t work out). These people need to be there for one purpose only – so help you be successful – not distractions.
So who are these advisors?
First the must haves – a lawyer, an accountant and an insurance adviser:
- Take your time selecting these people, be clear on what you need from them, for instance if you have a commercial background you might just need the lawyer for review purposes so confirm they are comfortable with that level of engagement, or if you are using Xero and pretty straightforward finance wise you may only need the accountant for annual accounts vs a monthly fee engagement.
- Interview them, these are advisors you will need to rely on in times of stress, are they a good fit for you? do you trust them?
- Avoid retainers and fixed fees until you know you need that level of service.
- Reference check them – seriously, don’t just settle for the first person you meet check them out, what do their other clients say?
- Consider using specialists – there are Tech sector specialists for instance, franchise specialists etc, so consider using those vs generalists
- Insurance Advisors / Brokers are not all created equally – same advice applies here too
Employ these people as soon as you can afford to – branding, marketing, public relations (PR):
- These are not all the same thing so it is highly unlikely you will find one individual who can do the lot
- Again stay away from retainers just use these services for projects or time & materials – some marketing and PR firms try to lock you in from the outset, resist until have had a good handle on what you need from them and how they work
- There is an art to PR and getting your company in the media, PR people have contacts and writing skills most business owners don’t possess so there is value in their craft – don’t dismiss it
- Branding is a creative process and takes time – to get an awesome logo may take many iterations so be prepared, stay engaged and hold a vision (vs a solution) for the message your brand will convey in mind.
- Advisory boards provide you with advisors (advice / help) at a reasonable rate (sometimes free) to provide insight into areas of the business you need help with, particularly useful for growth companies to augment the founders capability with experienced professionals in their given fields. Key words advice and help.
- Differs from a formal Board of Directors – advisors do not hold a governance role, you don’t have to act on what they advise, they have no operational role within your company structure. This article provides a good overview of the differences along with links to other posts worth reading.
- This Forbes article provides some good tips on the construction of your advisory board – the makeup of the board, skills and experience.
- The most important thing when engaging advisors is these must be people who will add real value to your companies growth. Like engaging your lawyer and accountant be really clear on what you need from these advisors, interview and reference check them and get evidence of their experience.
- Tiny rant – there are “professional advisors” who sit on advisory boards who have never started a company, never grown a company, never sold a product or service. They are usually consultants who sometimes prey on trusting entrepreneurs to get engaged with their new venture but offer very little value beyond that you buy from professional experts. Be very wary of the smooth talking but vague advisors who come knocking offering to be on your advisory board (rant over).
Board of Directors
- It is normal for the board members of a startup to be the owners or founders and in some cases these founders continue as the board perpetually – it’s your choice whether you need to bring on directors don’t be coerced
- Take professional advice before appointing a formal Board of Directors vs an Advisory board. Understand what the responsibilities and liabilities of a board of directors. In NZ there is an institute of directors you can read this detail on their site
- Like the appointment of an Advisory Board take your time over selecting these directors – what are they bringing to the table? what is their experience? again interview and reference check them extensively. Look for balance of skills and experience.
- Consider the balance of your board – women are under-represented at board level generally, and across the tech sector yet the evidence shows companies with women on their boards are more successful to the point the UK government have a 25% female representation target (personal crusade over now too).
- At a personal level you need other support networks in your life – your significant other, your family, your friends, your sports team etc – make time for these people, they have no concept of what you are going through so respect this and fit them into your life
- Your staff are there for one reason, to do the job you employed them to do and be successful in that role, which will in turn be working towards delivering your strategy and vision for your company. They are SME’s not your business advisors so engage, communicate, be open and enable them to do their jobs while remembering they haven’t walked in your shoes so don’t have your perspective.
Happy sharing, Vic.
Here is a lovely gift from our Insurance Brokers Meridian General for our continued custom – a mulled wine kit: