A community of vetted, trusted advisors is one of the most important competitive advantages of a well-run company. When selected correctly, an advisory team can open opportunities, and inject knowledge and experience into an organization that otherwise would not be available.

However, before you approach your potential advisors, it's important to ensure you are ready to inform them and engage them.

Whether you are seeking one or two advisors that you can have on speed-dial as you initially ramp up, or want to establish an official advisory board, you'll want to assemble these items prior to asking any potential advisors to invest their time with you. Present them in a concise document to your prospective advisors once they've signed your NDA.

Company Values, Mission and Vision.These are the most important foundational elements of your business. They explain your guiding ethics & principles, why you exist, and where you are going. It is not your advisor's job to help you create these.

Current Company Organizational Chart. This explains the hierarchical structure of your organization. If possible, provide both a functional org chart (absent of names), and a position-based org chart (with names).

Company Past State, Present State, & Future State. Advisor candidates should understand where you've been, where you are, and where you are going. This will help them understand how they fit into the big picture.

Executive Summary. Every business plan includes a well-written executive summary that captures the company's positioning in a few sentences.

Product or Service. What problem are you solving with your product(s) or service(s)?

Target Market and Customers. The candidate should understand who the company's target customers are and why they have been chosen to help you dominate the market.

Competitive Analysis. A strong competitive analysis indicates detailed knowledge of the competitive landscape.

One Year Business Plan. What is your 12-month business plan? How do they fit into this picture?

Additional Considerations

In addition, business owners should be prepared to discuss these four factors:

Advisory Team Expectations. What are you expecting from your advisors? How will you get together? What will the meeting frequency be? If you have assembled a formal advisory board, will they be required to convene in person, or can they call in/Skype in? Will advisors be required to be available in between formal meetings? How engaged will advisors need to be with others beyond the executive team?

Advisory Candidate Role. - What is your advisor's specific role? What is his/her dedicated swim lane? If they are assisting with business development, will there be additional compensation? How will you measure success?

Compensation. As I describe in  my book "Built to SCALE: How Top Companies Create Breakthrough Growth Through Exceptional Advisory Boards," you can compensate your advisors on a monetary basis, a non-monetary basis, through equity/stock options or a combination of the above. Whatever you decide, you must do something. Advisors do not sign on as advisors for the money. They do it because they believe in the leadership and in the mission of the company. However, as the owner, you must put some skin in the game. You must invest yourself if you want to ask others to invest themselves. Further, by compensating your advisors, you will feel comfortable reaching out when you need assistance.

Roll-Off Strategy. - All business partnerships should begin with the end in mind. Should you or advisor decide to part ways, it's essential to protect the integrity of the relationship. If you are considering equity compensation, a restricted stock agreement is one tool will protect both of you in the event of a separation.

In Depth Interview About Advisory Boards

I recently joined Ian Altman, CEO of Grow My Revenue, on his Grow My Revenue Podcast to discuss the implementation of advisory boards. I shared several insights I learned from my own experiences, as well as what I learned through interviews with more than 150 other business owners. Please tune in to learn several helpful insights, including:

  • When you need to start thinking about an advisory board.
  • Why you must be ready and committed to change when you bring on an advisory board.
  • The 4 biggest mistakes companies make when selecting an advisory board.
  • How to structure your advisory board's compensation.

Speaking from experience, advisors can open doors and help grow your company in ways you can't imagine. A strong advisory team is the most effective and efficient way to clone yourself as you build your business. Further, it is an effective prescription for softening the loneliness that invariably accompanies us on our entrepreneurial journeys.

Good luck!