Building an Advisory Board

Guesswork Unveiled, Issue #14

Building an Advisory Board

Guesswork Unveiled, Issue #14

I’ve been fortunate to be surrounded by excellent mentors & supporters throughout my small business journey. It’s an area of anxiety for many searchers — how to set themselves up for success in the operating phase of ETA.

Invariably, I suggest building an Advisory Board.

(Side note: I’ll repeat this sentiment multiple times through this piece — but thank you so much to my Advisory Board for your support. It’s truly meaningful to me that you volunteer to your time to help me.)

First things first — why not call it a Board of Directors? I asked that exact question to my friend Justin Vogt before buying my business.

He responded: “Well, are you going to let them fire you?”

Me: “….umm, no.”

Him: “Then it’s not a Board of Directors.”

Justin is right — the primary role of a true Board of Directors is to hire/fire the CEO. Most self-funded searchers retain that right. By contrast, most traditional searchers do not; that right is held by their investors/board, so it’s a true Board of Directors.

Okay — we got the naming terminology down, so how do we actually build it?

Today’s piece is broken into two sections:

• Who should be on your Advisory Board? (free to read)

• How should you structure Advisory Board meetings? (paywalled)

Before diving in, I found the first slide from my first Advisory Board meeting, roughly three years ago. Honestly, this still rings largely true today, though I do have a true manager layer in place now. But here’s a screenshot of that slide:

Okay — let’s dive in!

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Who should be on your Advisory Board?

My advisory board has five people, which felt like a comfortable number that ensures sufficient diversity of opinion & experience while not becoming a scheduling nightmare.

The beauty of this specific support structure is that you get to select different types of people to fill different gaps in your own skillset or confidence.

First, here’s my Advisory Board:

• Chase Murdock: CEO of Decada Group, a portfolio of small businesses in Salt Lake City. Both a good friend and an inspiration in terms of truly loving the process of building a small business.

• Nick Fedele: President of Metal Alliance (and an investor in my business). Another close friend and fellow small business owner.

• Andy O’Brien: President & CEO of GoodLeaf Farms, formerly CEO of M&M Food Markets (former portfolio company of the private equity firm I worked at). He sets the tone in terms of best-in-class CEO practices.

• [Close Friend]: Best friend from college, currently works in private equity and is an personal investor in my business. He knows my personal blind spots more than most people, and has a strong first principles problem-solving approach.

• Kevin Halbert: Owner of Winkler Tree & Lawn Care. Kevin operates a larger tree operation and has been in it longer than I have, so can offer hard-fought industry-specific expertise that is extremely relevant to the growing pains my business experiences.

Thank you so much to these folks — the collective experience & wisdom they bring me is beyond anything I could have hoped for.

In building this board, I was solving for a few different goals:

• Learning to be a good manager: Before buying my business, I had only managed a handful of junior analysts in finance. I had never hired or fired someone by myself. The first time I had to fire someone in my business, I went straight to my advisory board for advice.

• Having medium-term accountability: I have short-term accountability to my team and our clients. I have long-term accountability to my investors. But the medium-term goals — that’s where real progress gets made. These are the quarterly business improvements that you slowly grind through that actually build your business over time.

• Avoiding reinventing the wheel: There’s a million and one different ways to build a business operating system. Whether you like EOS/Traction or something more informal, there’s no need to reinvent the wheel. Instead, I wanted to access folks who had tried different methods to build businesses and could share nuanced views on them.

• Accessing “time-diverse” perspectives: I’ve learned that the exact same issue can generate very different advice depending on how far removed the advisor is from facing that issue themselves. To that end, I wanted a range of “time-diversity” — my college friend and I are in very similar phases of life, and have been for years. Kevin & Nick are a few years ahead of me in their small business ownership journey. Chase is ~10 years ahead of me as an operator, and has the benefit of seeing small business issues manifest across a portfolio of companies. And of course Andy has 15+ years of operating experience on me.

On actually finding your Advisory Board:

• Start with identifying what parts of business ownership feel the scariest to you. Where are you weakest in terms of your self-confidence or your skillsets?

• Think about who in your network 1) can fill that gap and 2) places value in mentorship and community support.

  • There could be some great operators who may not be very capable Advisory Board members. You need folks who actually enjoy being helpful and find it meaningful to give back.

  • This does not have to be your investors. Only two out of my five Advisory Boards are investors. The Advisory Board doesn’t have any governance rights anyway.

  • In fact, many of your investors may prefer to serve as 1:1 advisors, and you may want to access different areas of expertise for the actual Advisory Board.

• Think about how you can make the work meaningful to them. Is there any area of their lives where you can offer value? If so, be prepared to give it freely and proactively. (This may not always be possible depending on the relationship, but it’s worth pondering.)

• Make the ask — don’t beat around the bush, explain 1) the expected time commitment, 2) the materials they’ll have to read, and 3) any other expectations you have of them. Don’t downplay it as very little effort — transparently explain what you’re expecting of them and what you’re hoping everyone gets out of it.

Here’s an example of how to make the ask:

“Hi [Name],

Hope you’re well! I wanted to reach out to see if you’d be interested in joining an Advisory Board for my business. As I enter business ownership, I’m feeling the need for support around [insert key reasons], and I think your experience with [insert relevant experience] could be really instructive.

I don’t know what your bandwidth looks like these days, but to the extent you would enjoy and get something out of being on an Advisory Board with a few other mentors, here’s the expected time commitment:

• 1.5-hour meeting, once per quarter. Meetings will mostly be on an early weekday morning, Pacific Time.

• I will circulate a slide deck at least the weekend prior, which I would ask that you read in advance of the meeting.

• Occasional email question or ad hoc phone calls on a 1:1 basis.

As this is an unpaid role, I really want this to feel like meaningful work to you. But if there’s any facet of [their business or projects] that I can help with, such as [your specialized expertise], I’d love to offer that up as well.

In any case — I value your experience & mentorship, and would love to have you on the Advisory Board if you have capacity & interest. Zero pressure, and happy to answer any questions you may have. Thanks for considering it.

Thanks,

[Your Name]”

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How should you structure your Advisory Board meetings?

Okay — you’ve got your Advisory Board in place. How should you structure the meetings to make them 1) interesting for your board members, 2) useful to you, and 3) not too much of a distraction from your day job?