Things to Keep in Mind When Selecting Your Business Advisor

No matter how ambitious or talented, we all have our blind spots – certain obstacles or hard realities that we fail to predict. This is why we all need some sound advice from time to time. To get it, we must engage the right advisors along the way. Many entrepreneurs assemble a board of advisors and then have no idea what to do with them.

 

An “advisorship” is much more than a mentorship; it is a relationship between a business and a third party that has a specific value to add. Just as an advisor must invest his or her time to serve the business, the business must invest time into the relationship. But what comprises a really great advisorship? Let’s take a look at how to engage and manage your dvisors.

 

How to Engage the Right Advisors

 

  • Select advisors based on areas of expertise. Every business needs a dream team, but you can’t hire for every expertise you’ll need. Sure, you may need developers and designers, but how about experts on your industry or people with relationships with certain prospects that you can’t afford to hire? As you identify areas of expertise that you lack, consider who might be able to help.

 

  • State expectations up front. It is best to have a contract that covers details regarding any form of equity grant or compensation as well as whether or not expenses are reimbursed. Some entrepreneurs explicitly state the frequency of meetings, phone calls, and possibly the number of hours expected from a committed advisor.

 

  • Keep a candid exchange. Your relationship with your advisors should be constantly optimized through candid feedback exchange. Entrepreneurs should ask their advisors the question: “How can I better utilize you to help the business?” Likewise, great advisors always ask the question, “How can I be more helpful to you?”

 

  • Have an exit strategy. Most entrepreneurs I know say that their “advisors” have less than a 50% success rate. Granted, great advisorships are a two-way street. That being said, it is fair to expect that some of your advisors will flake out, change industries, retire, or simply be too busy to help. As such, it is best to define up front what happens if either party decides that it’s not working out.

 

What Makes A Great Advisor?

 

  1. When you advise a founder/CEO, understand that they will only take a small fraction of it.
  2. Advisory roles require face time.
  3. Advice given privately is taken more often than advice given publicly.
  4. Keep the companies top of mind – always.

 

A great advisorship, like any other relationship, requires energy, communication, and commitment. Pursue advice, but with a commitment to do what it takes to set up your advisors to succeed.