Here's a low - cost business tip for all you struggling start- up entrepreneurs who want to grow at a phenomenal rate: Get yourself a board of directors to provide direction and maturity to your venture.
While experienced, old-time, solo practitioners may pooh-pooh the idea, I believe this is an inexpensive way to get some real wisdom and guidance while running a fast-growing business."But why would I want someone looking over my shoulder?" you might ask. "That is why I got into business for myself in the first place - so I wouldn't have to answer to anyone."
I got news for you, brother. We all answer to someone, our customers, our suppliers, our spouse, our conscience or just the forces of the marketplace. Besides, a board isn't something you have to answer to. A board, properly selected, is a group you would want to listen to.
Most corporate boards come in three varieties: First, the "paper board." This board is just names put on incorporation papers and never heard of again. What a waste! A "corporate board," required in many states, should do more than just satisfy a legal function; however, if you have only a "paper board," chances are you are wasting a low-cost intangible asset that could help you be an early and continuous winner.
"Inside boards" are another variety. Still often a wasted commodity, they provide a better function than the "paper board" but not much. Some "inside boards" at least meet periodically; yet, for many, their function isn't much different than a rubber stamp.
Mostly chosen for family or relationship reasons, these boards do nothing significant other than echo the decisions made by the entrepreneur. Often staffed by management people or friends of the entrepreneur, including the corporate accountant or attorney, the board seems to meet primarily to satisfy the corporate requirements of yearly meetings.
The most powerful type of board is the "outsider board." This can be made up of men and women who have "been around the horn" business wise. Some may come from the same industry you are in. Others may be entrepreneurs who have harvested their businesses and are looking for ways to give back to the community.
If I were selecting an outside board, I would make a dream list of all those who I would want to serve on my board. Then, I would try and find people who know them. If I couldn't find anyone to set the stage for my call to them, I would just pick up the phone and ask them if they would serve on my board.
I have a friend who found a person on his wish list had moved to England. My friend wanted him to serve on his board so badly he bought an airline ticket to England and personally invited him to serve on his board. Now that was an entrepreneur who had tenacity and knew what he wanted and got it.
The board can be a great sounding board when you run into new problems where you could use a second opinion. A well-selected board could provide decades of good business experience to draw on.
Some have asked how many board members one should have. I think five board members is a good number so they can break a tie when votes are taken. More than five seems bulky for a medium- size company of, say, less than $50 million in revenues.
I also feel that board members should be asked to serve for a specific number of years. As businesses change and grow, demands for different sets of skills from board members may arise. Recently, a company I helped outgrew my level of experience, so I offered to resign so someone else could serve the corporation better.
One final thought: Boards do not run the company. Management teams do. Boards are there to give guidance, direction, and help with important decisions. But neither the CEO nor the board should forget that it is the president's job to run the company.
As a side note, readers interested in learning more about the Internet and using it as a tool to build your business are invited to a two-hour presentation by the Center for Entrepreneurship in the BYU Tanner building from 2 to 4 p.m. in Room 151 Friday, April 3. See you there!