Fan Bi is the CEO of Blank Label, an award-winning custom menswear brand. Since founding in 2010, Blank Label has shipped over 100,000 custom garments to customers all over the world, and is the first brand to offer custom chinos online.
If you're the owner of a new startup, hiring a board of directors probably isn't a priority on your list of goals. You're typically knee-deep in the details of operations, financial management and marketing, and don't have much time to think about it. You may even see it as something to be instituted far down the road anyway.
But boards aren't only for listening in on earnings calls for Fortune 500 conglomerates. They can be an important asset and resource for even the smallest entrepreneurial venture. Many startups have discovered how having a board of directors can be important for accountability and perspective, even if you haven't secured a single cent of outside financing. Here's why having a board of directors has benefited my own business.
They're experienced in strategic decision making.
As entrepreneurs, we often feel the constant struggle to be technicians, managers and big-picture strategists all at the same time. The problem is: While we all have experience performing specific job tasks, and many of us have experience managing people, most first-time entrepreneurs simply haven't witnessed the process and effects of long-term strategic planning. By instituting a board of directors, you can select participants for the job who have unique experience in hiring strategies, capitalization, resource allocation, etc. They can be singularly dedicated to helping you develop and execute your long-term strategic goals.
When I started Blank Label in 2010, my inexperience in strategic planning showed in many instances. Having confidence when making these decisions develops with experience, and many entrepreneurs simply don't have the luxury of time to repeatedly make mistakes. Since our company created a board of directors in 2015, our strategic vision is much more focused and our ability to plan for the unknown has vastly improved. We have an independent board director and an investor, both of whom have deep operating experience and understand the negative impacts a decision made today can have.
They have the power to be impartial.
When you spend so much of your time, effort and money on a new venture, it's natural to have an emotional attachment to it. This connection can be helpful in sales and marketing, as your zeal for your product or service often shows through to the customer. However, this can be disadvantageous when it comes to making hard decisions. Ever since we decided that too many of our decisions were driven by an emotional response, our board has been a welcoming voice of impartiality. They've been comfortable with telling us not to obsess over a specific line of merchandise, and it helps us see the forest from the trees.
They have a unique composition.
Finding someone with the right combination of experience, insight, and knowledge of your market sounds like a daunting task, but it's too important of a decision to rush, especially when it comes to your board of directors. Also, don't undervalue the importance of choosing someone you'll get along with. There are inevitably going to be moments of tension, and you don't want someone on your board who will blow up at the first sign of trouble (or make you want to do the same). We chose one of our investors who had significant experience in our market. He's also an independent entrepreneur with plenty of knowledge on startups and my own role as CEO.
They provide value.
Investing in a board of directors is a serious decision, and you'll want your business to gain a great deal of value from it. We have board presentations and feedback sessions available to our employees so they can gain insight into the strategic planning and big-picture decisions of our company. We also frequently invite other senior members of the staff to attend board meetings so they can then incorporate what they learn into their own business unit.
Of course, you can still get advice without having a formal board. In a somewhat ironic way, we created a board after a fellow entrepreneur who runs a fitness marketing company, PPL Labs, walked us through their experience and the value they gain from their board's advice. Entrepreneurs are always a great source of advice, but having a board adds a cadence and system to getting counsel.