Business Advice: Where to Get It

Small businesses sometimes need a set of advisers.  The idea of having one is as important as a business plan.  However, some business owners realize the need for advisers much later.

Choosing between On-board and Outside Advisers?

Small businesses need to determine if they would need an in-house adviser or just some knowledgeable people that can be contacted by phone for an informal business call.

The advantage of having a formal set of directors to give advice concerns responsibility.  An On-board formal set of advisers are subject to rules and regulations. So, they would have a deeper sense of responsibility and will be very useful for faster and emergency response.

However, if businesses have several trusted individuals that can provide good advice could also be beneficial for the company.  The lack of restrictions and legal liabilities will also make the advisers respond to questions in a very candid manner.

Directors are responsible for keeping track of their company’s performance in financial matters.  They should also provide oversight functions for company strategies and the success of its products and services.  Shareholders of large companies are wishing that their executives should have paid due attention to that.  

Jeff Wuorio is a small business writer and details the issues needed in setting up a small business board of directors.

According to Wuorio, several questions need to be answered in setting up a board.  The company should set the specific responsibilities of the board and what would be its functions.  Questions on auditing and if the board will help raise capital should be answered.  Small businesses should also determine the terms and methods of paying the board.  

The last point could entail lots of expenses which should be expected by business owners.  Even small businesses are expected to pay more than $30,000 annually for each board member.

How to Choose a Board Member

Business columnists say that small business owners should look for a board member with the following characteristics:

For one, the board members should complement the skills of the business owner.  Some people are naturally adept in some areas while lacking necessary skills in others.  The board members should fill this void in order to complement the skills of the business owner.

Board members should also have enough experience in business.  An experienced board member who understands the business and entrepreneurial process is an ideal candidate.  A board member should also help companies look for investors and customers based on their network of contacts.

Board members should add value to companies.  A rubberstamp board would not be healthy for small businesses.  And most importantly, the board should provide a broader picture of the company as owners tend to get lost in the day to day operation of the business.