“We have a mission to help people through guidance, which goes beyond just product. With [our cookware brand] Equal Parts, we offer a texting service that allows customers to have a conversation with a professional cook. Customers can ask for a fresh grocery list, recipe recommendations, or even how to make simple scrambled eggs. This type of interaction creates a deeper relationship, and the customer feels like they’re gaining value beyond a tangible product.”

We can use an advisory board to weather current challenges and opportunities. For example, a chef entrepreneur about to open a new restaurant may decide to form an advisory board to gain expertise in marketing, human resources and construction and design — skills that a culinary type would not necessarily possess. In forming the advisory board, the entrepreneur should carefully consider his or her critical knowledge gaps so as to identify appropriate advisors.

These individuals are familiar with the owner and likely would be willing to serve as advisors. To the extent a particular need cannot be met by someone in the entrepreneur’s network, referrals can sought. The final option is making old-fashioned cold calls.

Advisors should not only have the technical knowledge but also a desire to help the entrepreneur. Plus there should be good chemistry between a potential advisor and the entrepreneur.

While advisory boards are generally less formal than governing boards, the entrepreneur should protect his or business. Advisors will be privy to highly confidential information about business plans, intellectual property and trade secrets. Each advisor should initially complete nondisclosure and conflict of interest agreements. Also the entrepreneur would be wise to spell out in writing the advisor’s role, responsibilities and other expectations.

Price is what you pay. Value is what you get.
Berkshire Hathaway CEO Warren Buffett

Advisory board members are not contributing their valuable time for money. They become involved as a result of their desire to help the entrepreneur — and perhaps feel good about mentoring someone in need of their expertise. It is good form to provide some form of compensation. Depending on the venture’s financial ability, compensation could include meals, travel expenses or a small stipend. Advisors who feel appreciated will put forth their best effort.

Keep it intimate. The value of an advisory board is determined by its members not its size. Entrepreneurs should seek out three to five advisors with the necessary skills to meet the current challenges. Over time the venture’s critical business issues may change. Then the entrepreneur can seek new advisors with the needed skills.

Company should treat advisory board meetings as a vital company asset. Advisors can provide valuable feedback and recommendations — if they are prepared before meetings. All relevant information such as business plans, financial statements and other reports should go to advisors well in advance of board meetings. All details should be planned out ahead of time, including the agenda, meeting location and time, the meal and any audiovisual needs.

Advisory boards tend to meet infrequently, perhaps once per quarter. Periodic or infrequent meetings can result in business matters slipping from top of mind. If the entrepreneur provides advisors interim information such as monthly financial and other reports, however, board members can remain informed.