Louise Broekman is the Founder of the Advisory Board Centre.
Louise specialises in executive education and professional development. Her notable achievements include expanding a licensed model across eight countries and chairing advisory boards for high-growth firms.
The Advisory Board Centre provides support for businesses and advisors, including executive training, market intelligence, and networking services. Louise’s role in shaping the advisory sector through innovation and education has made her a respected figure in driving value for businesses and professionals.
Want to learn more? You can read or listen to our chat with Louise Broekman on YouTube, Spotify, Listen Notes, or Player FM. It’s also available anywhere you listen to your favourite podcasts via Buzzsprout.
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Authored by Louise Broekman, Founder of the Advisory Board Centre.
Imagine having a team of wise, trusted friends who could guide your small business through thick and thin. That’s the essence of an advisory board. While advisory boards are often seen as a resource only available for big companies, they are actually perfect for small and medium businesses, especially those turning over between $1 million and $100 million a year. Let’s explore why forming an advisory board could be one of the smartest moves you’ll make for your business.
The importance of advisory boards for SMEs
Navigating growth and succession planning
The main role of an advisory board is to guide businesses through growth and succession planning. This is especially true in Australia where lots of businesses are family-owned and need to think about what comes next. Most businesses don’t have an advisory board because they want to stay the same. But, for those with an ambition for something different, bigger, or better, an advisory board is a great way to do that.
An advisory board, by its nature, is not a one-size-fits-all solution. Advisory boards customise their advice to fit your business’s needs and challenges. They offer a variety of viewpoints that help you make better decisions, manage growth smoothly, and handle changes in leadership easily.
Often, we have this mindset that bigger is always better. But some advisory boards help you figure out the right size for your business, focusing on what’s best for long-term success rather than just expanding. This helps improve your profits and customer satisfaction.
Strategic decision-making
Running a business means making a lot of decisions. It’s easy to start second-guessing yourself when you’re doing it alone. Here, advisory boards play a crucial role. They act as a sounding board, offering a blend of advice that challenges your own initial thoughts and biases before you make a commitment. You’ll feel more confident knowing you’re making informed decisions.
The interesting thing with an Advisory Board is that it’s not just one person. It’s not ethical or practical to expect one person to know everything about your business. And it’s not right for an external advisor to think that they have the fountain of all the knowledge for somebody else. And so an advisory board brings together diverse experts, each chosen for how well they can help your specific situation, making sure the advice you get helps guide your business in the right direction.
Transforming how you run your business
A study we did in 2002 looked at 4,000 businesses and showed that the most successful ones avoided making decisions quickly. Instead of being constantly busy with no real productivity—like gerbils on a wheel—these successful businesses took time to think through problems and make sure their actions matched their overall goals. This approach leads to smarter decisions that fit the business’s long-term plans, rather than quick fixes that might feel good at the moment but don’t help much in the long run.
Many business owners get caught up in making fast decisions because it makes them feel important and productive. But this doesn’t usually lead to the best outcomes. Advisory boards encourage you to slow down and think about different possibilities before deciding. Usually, within about six months, businesses learn to make more careful and thoughtful decisions.
How to start an advisory board
Have clear expectations and structures
The first thing you need to do when setting up an advisory board is to be very clear about what you want from it. What are the main challenges your business faces? What do you hope to achieve? Before you even think about who will be on your board, you may want to try our free advisor concierge service. This service will help pinpoint your business priorities and figure out the best setup for your board.
Advisory boards work best when they have clear rules about what they’re supposed to do and what they should stay out of. They should focus on giving strategic advice, not managing day-to-day activities. Remember, advisory boards aren’t quick fixes for urgent business crises like cash flow problems.
New advisors need to understand that being on an advisory board is about providing well-thought-out guidance, not just quick tips. Effective advisors are those who ask good questions to help business owners think deeply about their decisions.
Now, what’s really important in the establishment phase of an advisory board is having the right chairperson. This person should be someone you respect and who is excited about your business. They’ll help organise the board effectively, setting the right protocols, and aligning the board’s activities with your business goals. Before the board starts its work, have a meeting to make sure everyone understands their role and what they need to do. This helps everyone give better, more useful advice.
Different types of advisory boards
The great thing about advisory boards is they can look different depending on what your business needs. Here’s a simple guide to the different types you might consider:
Starter advisory boards:
This basic model is just you and a chairperson. It’s a good starting point to help you get comfortable with the concept of advisory boards before expanding.
Pop-up advisory boards:
These are great for small businesses looking for flexibility. Members of a pop-up advisory board join in for specific projects or problems and leave once their part is done. This way, you get the right help at the right time.
On-demand advisor panels:
These are like pop-up boards but are even more flexible. You can call on a panel of experts anytime you need quick, expert advice. This setup is common in fast-moving areas like startups or investing.
Project advisory boards:
These boards focus on big goals or projects, like starting a new product line or entering a new market. Once the project is done, the board might end or move on to another project.
All-business advisory boards:
These boards look at everything going on in your business. They meet regularly to give advice on various topics but don’t make decisions for you—that’s still your job.
Short-term advisory boards:
These are set up for a short period, often 90 days, to tackle a specific problem. After achieving their goal, they might end or switch to another issue.
Each type of advisory board brings different levels of expertise and commitment, letting you customise the advice you get to suit your business and how you like to manage things.
Selecting the right members
Picking the right advisors means looking at both what you need right now and what you’ll need in the future. Try to choose a diverse group: someone who has recently dealt with challenges like yours, an expert in an area you want to grow into, and someone from a completely different field for new ideas. This mix ensures your board can offer well-rounded advice.
The main goal of the board isn’t to agree on everything but to challenge each other and think critically about different options. This helps you make decisions that are thought through from all sides, not just the easiest or most popular ones.
If you have specific goals, like improving your social media presence or expanding into new markets, look for advisors who have direct experience in those areas. For example, someone with a strong background in digital marketing would be perfect if you’re trying to grow your online audience even if they’re not from your industry. This ensures your board isn’t just knowledgeable overall but also has expertise in the areas where you most need guidance.
Running the board
Once your board is formed, you need to organise it properly. Schedule regular meetings, make sure agendas are clear, and clearly define everyone’s role, especially the chairperson’s. The chairperson should keep discussions focused on big-picture strategies instead of daily business operations, helping the board stay on track.
Every member needs to know what they are there to do. This clarity keeps meetings from drifting into pointless chatter. An ideal advisory board should feel like a team of peers, where members are comfortable being open and honest. This creates trust and leads to useful discussions, which can significantly benefit your business.
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The real power of an advisory board lies in how well it blends into your business’s decision-making process. It’s there to boost, not bog down, your strategic planning. Especially for small and medium enterprises that often run on tighter resources, an advisory board can kickstart growth and help sustain your business. This team offers valuable advice, pushes you to question the usual ways of doing things, and keeps you on an ethical path, all of which can lift your business to exciting new levels.
