How to Build an Outside Board for Your Business

Every publicly traded corporation features an outside board of directors. While an outside board may not be appropriate for a small, privately held contracting business, an outside advisory board can be. Unfortunately, few contractors create an outside advisory board.

An advisory board is a collection of professionals who help guide you in the business decisions you face, assist you in reaching your goals, and keep you accountable. It is work for the board members and time away from their businesses, so they should be compensated. The compensation does not need to be substantial, but it does need to be paid to show you value their contributions. What you will receive will far exceed any payments. If a board member is hesitant to accept payment, allow him to specify a charity and donate it in the board member’s name.

Equally important to recognizing board members’ contributions monetarily is giving due consideration to their suggestions and acting upon their advice. If they do not feel listened to and valued, no amount of money will be enough.

Board members can come from the professionals you engage, such as an attorney, banker, CPA, supplier, and s on. They can be local businesspeople you respect. They can even be contractors who operate in different markets or other professionals from the industry. Here are the traits you should seek.

1. Seek People Who Will Hold You Accountable

This may be the most important trait of a board member. As a business owner, you are only accountable to yourself. If you have to report your progress to a board, you will get more done. I know. The weeks before a board meeting were my most productive of the year.

2. Seek People With Experience You Lack

You do not need board members who are just like you. If you’re not a numbers guy, bring on one or more board members who are. If you want to build your company to sell to private equity, find someone who has done that. During my start-up phase, one of my board members was a West Coast angel investor who helped numerous start-ups get on their feet. His experience was invaluable during the first few years.

3. Seek People Who Offer Different Perspectives

Contrarians may seem like pains, but they are some of the most valuable people to have on a board. They will see things from a different perspective and often will identify holes in your plans that others miss.

4. Seek People Who Can Provide Valuable Introductions

One of the roles of a board member is to introduce you to others who can help. Find connected people who are centers of influence. They are people who have valuable contacts. Business is built on relationships and they have them.

5. Seek People Who Can Become Community Cheerleaders

The same people who are community centers of influence can also be your best cheerleaders locally. Most contractors claim word-of-mouth is their best marketing. Getting a few centers of influence on your board can turbocharge your word-of-mouth.

6. Seek People Who Add Credibility

Find people who lend gravitas to your company. In my business, I had six board members who were in the Contracting Business Hall of Fame, including the legendary, Ron Smith. Having a board stacked with legendary contractors lent credibility until the company grew enough to establish it on its own merits.

Hold meetings quarterly, in-person, and off-site. Prepare an agenda where you report on the condition of the company. Encourage questions. Then, present the issues and challenges you feel you are facing. Take lots of notes. Create a series of action items that you will report on for the next meeting.

For inspirational contracting business lessons, buy Matt Michel’s book, “Contractor Stories” on Amazon. See Matt speak at the ServiceWorldExpo.com in October where he is a keynote speaker.