Why do you need any outside support for your business? You have built it on your own and have grown it to the point where it’s bringing in a respectable revenue. But are you happy with where you are, or do you want to grow further? Most of the time, when I ask business owners this question, they tell me they want to grow, and they’re finding it difficult to achieve the next stage of growth. This doesn’t surprise me — it’s perfectly normal for businesses to reach a growth ceiling and get stuck. What a lot of people don’t appreciate is that the skills you need to start a business aren’t always the same ones required to take it to the next level. At some point, you’ll have enough people working for you that you need to step back from the hands-on side of the business and focus on management. This is the first big hurdle that many small businesses never manage to clear. If you’re turning over $10 million a year or more, you’ve made it past this hurdle. Even then, it isn’t the last one you’ll find in your way because the larger your business grows, the more issues you have to deal with. If you want to continue growing, eventually you will
reach a point where you have a choice: stop growing or bring in the expertise you need to grow further. Personally, I think every business should focus on growth. If you’re not growing you’re standing still, and that’s not a great idea at a time when there is unprecedented technological change and increased global competition. To be successful now, and often just to survive, a business has to be agile. A business that isn’t really going anywhere will find it hard to adapt to these changes in technology, market and any other aspects that affect their business. But a business that’s making progress can change course to adapt or exploit new opportunities. If you want to keep up the momentum, you need to find a way to break through the growth ceiling. That’s one of the most common reasons businesses decide to start using an advisory board. Do businesses with advisory boards perform better? The short answer is yes, they do. In its 2014 survey nearly 4,000 of business owners, the Business Development Bank of Canada “research quantitatively demonstrated that SMEs that use advisory boards have superior growth and better financial results”. The two most significant conclusions being:
  • On average, businesses enjoy increased sales of 66.8% in the first three years after setting up an advisory board
  • Businesses experience increased productivity of 5.9% on average, compared to a 3.2% rise in the previous 3 years

My experience with my advisory boards in Australia show a similar or even better performance. As an advisory board chair, I’ve worked with many private and family businesses that realised they’d come as far as they could on their own. They decided to bring in someone from the outside with a fresh point of view to see where the business was and how it could grow to the next level. They didn’t want high-priced consultants but someone with deep business experience, who had grown businesses and sat where they sit as a business owner or CEO. They also didn’t want to go down the road of setting up a traditional board of directors that provides legal and fiduciary oversight. If you want to break through that growth ceiling, you need ongoing access to skills that aren’t available to most business owners or CEOs. Those skills weren’t required to launch your business and drive its initial growth, but they are required now. You can learn them, of course, but is that the best use of your time? An advisory board structure is the best path to obtain this expertise. It’s also a good way to get around the “lonely at the top” problem that most business owners discover when they get to a certain level. Business owners tend to be self-motivated and confident people, and they’re often reluctant to share their problems with outsiders. They usually have a desire for independence or a fear of losing control — being vulnerable is a weakness. For regular access to the knowledge necessary to run a larger business, you have to talk to someone about it, and an advisory board gives you someone objective to talk to. They’re not employed in your business, so their perspective isn’t shaped by your corporate culture, but they’re very much on your side. Advisory boards also act as a business mentor. When you work with a personal mentor, you’re learning from their experiences and knowledge, using them to expand your own capabilities. Instead of personal development, an advisory board offers company development. You and your management team have a source on tap you can talk to, learn from and bounce ideas off.

An advisory board has a wealth of experience — its members have gone through the business growth challenges you face, and they know what solutions work. They can bring ideas from other industries and can bring in specific expertise, too. The membership is open, with experts joining when they’re required. But they are not task-focused like consultants, though. If you hire an IT consultant, they’re there to deal only with IT, but your advisory board will understand the impacts across the whole business. An advisory board is also committed to building longterm value for your company, and its advice will be tied to achieving that objective, rather than just a single project milestone. The advisory board is a flexible tool that can be tailored to deliver what your business needs. It isn’t something you have to bend your business to fit around — it adapts to what will add best value to you.

Peter Williams is Australia’s authority on leveraging business growth through advisory boards. With over three decades of experience in engineering, investment banking and corporate strategy, including running and exiting his own multimillion-dollar management business, he knows what it takes to run a successful business – he has sat in the driver’s seat as a CEO and a business owner – and will make sure you’re getting the advice you need as you do it. In his book Are You Ready For Your Own Advisory Board? Peter discusses the most common misconceptions about these boards and explains what they do and what they can contribute to your business. For a free copy of Are You Ready For Your Own Advisory Board? visit www.FreeAdvisoryBoardBook.com.au/AFR