In Harness the Power of an Advisory Board, I say that advisory boards are such a powerful management tool that no small business should be without one and describe creating an advisory board. Since writing that article, I've received a lot of comments asking for more details. Creating an advisory board, the writers agree, is a great idea - but how do you persuade people to serve on your board?
The key is to remember your basic rule of selling and focus on how they will benefit by serving on your advisory board rather than how you will benefit. After all, you are looking to take advantage of their advice and expertise in various aspects of your business such as management, marketing, accounting, staffing, customer service, technology, etc. It's only human nature for a prospective advisory board member to want to know what he or she gets out of the bargain.
Emphasize the Benefits of Serving on Your Board
So once you've chosen people who you would like to service on your board, the next step is to craft invitations that focus on the benefits of being part of your small business's advisory board. As much as possible, try to personalize the invitation by emphasizing the benefits that might appeal most to that particular individual.
Intrinsic benefits might include:
- Extending their circle of contacts and perhaps developing new business
- Getting new perspectives and ideas
- Contributing to the development of a particular profession or industry
- Discovering new potential customers, business partnerships, or opportunities for cross-promotion
- Personal satisfaction of helping to steer a company to success
- Prestige or resume building
The main external benefit is compensation and how you will compensate the prospective board member has to be part of your pitch as well.
Compensation might take the form of:
- Providing food and drink during and before or after an advisory board meeting (lunch or dinner)
- Covering expenses
- Cash – an honorarium or a fee paid per meeting
- Stock options
The most common form of compensation is probably some combination of the above. When you're creating your advisory board and trying to persuade people to be on it, don't be afraid to up the ante for particular prospects. Some board members will be more valuable than others and you don’t have to compensate them all the same.
Think carefully about each of the prospective advisory board members you have chosen and decide what each one would view as the best or most important benefits for serving on your board. These are what your advisory board invitation letter needs to focus on.
The Invitation Letter is Key
You don't need to put together a huge package of materials to try and persuade someone that serving on your small business advisory board would be a good thing. A single sales letter is a much better approach. It can lay out exactly what prospects want to know without taking up too much of their time. Chances are good the people you’d like to have on your board are already busy people!
Besides laying out the benefits, your advisory board invitation letter also needs to include:
- a brief overview of the company;
- the advisory board's mandate and focus;
- the responsibility of the advisors and the time commitment expected (how often the board will meet and for how long).
In closing, restate why you think the person would be a great addition to the board and what specific contribution he or she could make. Don't forget to mention that you will follow up soon with a phone call and give your contact information in case he or she has any questions in the meantime.
You may find it easier to use this sample advisory board invitation letter as a template.
Don't be Afraid to Invite the Best
Last advice: You already know that when you're creating an advisory board, you want to select "the brightest and best" with a diverse range of skills and experience. Make a list of the areas of expertise you need the most help in. Obviously, the more experienced and knowledgeable your board members, the better the advice your advisory board will produce.
So don't be afraid to ask people who may seem to be out of your sphere to serve. The worst thing that will happen is that they will say "No". Rejection costs nothing.
Formalize Your Relationship With an Advisor Agreement
After you have had a few advisory board meetings it is standard practice to formally clarify your relationship with the board members with an advisor agreement. The agreement should outline the agreed compensation and whatever deliverables are expected from the board members.
Once you have an advisory board assembled you will want to convene your first board meeting.