Utilizing an Advisory Board to Guide Your Business
By Mike Semanco, President, Hennessey Capital
The importance of an advisory board to an entrepreneur and business owner is invaluable. Entrepreneurs thrive on developing ideas, products and strategies on their own terms and at their own pace. The “charge ahead”, “get it done” mentality is second nature to this group of individuals. Entrepreneurs come in many shapes and sizes- sole practitioner, division managers or even CEO. Whatever the title or responsibility, surrounding yourself with a group of professionals you can rely on for sound advice and direction will only improve your chances of success and keep you sane.
An advisory board is different than a board of directors or managers, who hold fiduciary responsibilities of the business. Advisory boards can take many forms ranging from formal CEO roundtables and annual retreats to informal gatherings over coffee, lunch, or golf. Having a sounding board to share ideas and challenges help entrepreneurs feel they are not tackling the world alone. You can have a great internal management team or partner but there are times when outside influence is needed. A different perspective from a trusted advisor who has encountered the same issue helps you see the challenge or opportunity in a new light.
Advisory board members can consist of professional advisors (your CPA, attorney, banker or consultant), friends or associates who may or may not own their own business, or even a current staff member. The key is to surround yourself with people who have diverse backgrounds, are willing to challenge the status quo and who you like to be around. Start by selecting two or three contacts you feel could be strategic to your business and can fill the gaps you determine are needed. Meet with them and discuss your plans and ask them of their interest to meet on a regular basis. This could be once a month, quarterly or as needed depending on how critical your needs.
Daily business decisions are not easy so having a group you can turn to for renewed perspectives and friendly banter is refreshing.
Creating Strategic Partnerships to Build Your Business
By Joe Romeo, Senior Business Development Rep., Hennessey Capital
Creating partnerships can help build your business and connect you to new people and markets. The right strategic alliances can strengthen the breadth of your company through association with other related industry specialists.
This brands your company as more well-rounded to your client base and builds deeper bonds and support from your business partners while growing stronger inter-relationships. These bonds can last for years, paying dividends along the way.
Often these partnerships become valuable referral connections for your existing clients and result in the most valuable return you can get from any client as you help them in “other areas” outside the scope of your expertise. Customers recognize and appreciate your assistance has no direct self-serving interest.
To get started, it’s important to find partner companies that operate in your prospects’ circle. There are two essential components for your best alliance partnerships: the actual companies and the individuals representing those companies.
The right company is any non-competing company that is well respected and interacts with key decision-makers, influencers, and your prospect customers. It is particularly beneficial to reach out to trusted advisors, including bankers, CPAs, lawyers and business consultants whom your prospects look to for guidance.
Other good candidates might be third party connections like state, local and federal agencies or associations who help businesses find the resources they need.
The best fit for any business will be a partner with similar values and like cultures. The business can be at the opposite end of the product or service spectrum, but should operate with the same primary principles to yield the quickest results and easiest collaborations.
Equally important is the right ambassador, who should be a “rain-maker,” not a resource waster. The individual should be an effective executive who works on the right things, is efficient, capable and “connected.”
Approach: Work to develop relationships in a complementary, collaborative manner. This requires that you put the partner’s interests ahead of your own. A valuable adage is “you can best get what you need by giving others what they want.”
In this stage, seek to understand the partner’s business and learn where they fit in/complement to your company. It is also critical to be cognizant of their key objectives. This will add value to your relationship and lead to a mutually beneficial partnership.
Keep in mind that everyone’s favorite station is WII-FM (What’s In It For Me) and build your approach accordingly.
Team with partners in joint presentations, white papers, event exhibits or other such marketing channels to maximize your exposure and partnership opportunities. Your affiliation with key companies will increase your own company’s visibility and help you gain traction and the benefits of associating with recognized, expert partners. This will lead to great network connections and the ROI will be measurable.
BENEFIT:
Some of your partners will turn into future clients or you may need their services some day and enjoy the preferred customer treatment.
More traditional returns include the warm introductions you will get as your alliance partners act as trusted advisors for their clients and you are favored with the pole position as the result.
The ability to share ideas and get a diverse viewpoint or opinion can be an extremely valuable benefit from your strategic partners. If you look at CEO business coaching you will see that they purposely intermix CEOs from different businesses for this very benefit. Often a creative perspective or the view from some distant, unrelated business field will lead to a different outcome.
Invest loyally with partners before you look to make any withdrawals. This is an ongoing process, not a one-time commitment. Maintain your investment and stay on your partner’s radar.
A useful resource is www.networlding.com and Melissa Giovagnoli
When to Consider Hiring a Temporary CFO
By: Jeff Wright, Senior Vice President, Hennessey Capital
In my 27 years of asset-based lending and commercial loan workout experience, I have consulted with many small businesses that know how to manufacture a product but have difficulty managing the financial aspect of their business. This includes companies that are experiencing significant challenges as well as growth-oriented companies. Many rely on trusted advisors like their CPA, banker, or attorney to provide assistance on financial matters affecting their business. However, these key advisors are often handling many clients, or may not have experience in your industry to provide targeted guidance on some of the complexities of the situation. When this is the case, a temporary CFO can provide invaluable insight and expertise in evaluating and managing your business finances. Owners can draw on the CFO’s experience to fill skills sets management does not possess. This frees up management to address operational issues and marketing initiatives. Owners, however, must be willing to give up some control.
It goes without saying that small businesses need strong financial support in place. A temporary CFO with experience in the industry can provide invaluable support in the strategic planning, budgeting, and cost control for a small business as they grow. Their objective opinion can be helpful when considering taking on a new project, investing in new equipment, or evaluating overhead expense to improve cash flow. A temporary CFO’s experience can also be used as a resource when discussing financing options with a lender or suppliers, and in dealing with customers. They can also implement financial systems to monitor the financial performance of the company and provide timely reporting to help management make educated business decisions.
The primary role of a temporary CFO is to manage the cash of the business. Ownership can draw on their skills on an as-needed-basis without expending significant dollars usually required for a full time CFO. If you could use additional assistance in managing your financial operations and benefit from an outside perspective, it may be time to consider a temporary CFO for your business.
Entrepreneurial Do’s and Don’ts
Entrepreneurs are an industrious group. Their relentless curiosity and willingness to take risks often propels them to success. However, no one wants to take risks when it comes to financing their business. The financial landscape can be a confusing place for small business owners looking to establish or grow their business.
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