There’s no question that entrepreneurs face an uphill battle – nobody said it would be easy.
According to the Small Business Administration, about one-third of businesses will not survive the first two years. And even if your business does survive, there’s a big difference between ‘surviving’ and ‘thriving’. Many small businesses see their growth rates plateau and tread water for many years as they die a slow death.
As a voracious student of business, having helped over 75 companies and selling 4 businesses, I have found that all SMEs can benefit from two underappreciated strategies.
Forming an Advisory Board
Most entrepreneurs can’t afford to hire top talent for their business, but the good news is that there’s an easy hack to reap the same benefits.
A Board of Advisors – or Advisory Board – is a great way to bring in ‘top shelf’ functional expertise across all areas of your business, along with valuable connections that can help your business succeed. While famous executives may not join a SME business advisory board, it’s usually possible to recruit top local talent by leveraging your networks. Many of these executives are more than willing to help a local small to medium-sized business succeed.
How to Form an Advisory Board
Start by taking a look at your company’s ‘holes and goals’, which means both areas of expertise that you’re lacking and where the company is headed over the long-run.
The best advisory boards are diverse groups of four to six people with functional expertise that’s needed to reach the next level but your business may be lacking. For example, you may have a strong product development team, but lack experience in sales and marketing. A board member with extensive experience in marketing can be instrumental in helping to fill the void without having to shell out top-dollar for the right level of talent.
The best sources of advisory board members are:
- Referrals – Try reaching out to your personal network and ask for introductions to people that you feel may be valuable additions to the board.
- Existing Customers – Existing customers may be good advisory board members since they have a deep understanding of the industry and needs.
- SCORE – The Service Corps of Retired Executives (or SCORE) is a nonprofit organization that provides free business mentoring services to entrepreneurs in the United States. If you’re already using these services, long-term mentors may be willing to join a formal advisory board to help out.
After identifying board members, it’s important to prepare a formal letter with a finite response date and plan an orientation meeting to introduce them to your company, set expectations (travel reimbursements, timelines, etc.), and agree to a regular meeting schedule.
How to Hold Board Meetings
Advisory board meetings should have a clear agenda, including the overall objective of the board meeting and specific topics for discussion. Often times, entrepreneurs will bring several discussion topics to the table and the board will vote on the specific topics to cover during the meeting. This helps ensure that everyone is engaged and important topics are being covered.
Implementing Business Systems
Imagine that you’re on an international flight and the pilot announces over the intercom, “I have good news and bad news: The bad news is that our instruments are down and we don’t know where we’re going; the good news is that we’re making great time!”
Many entrepreneurs find themselves in a similar situation: Their business is growing but they don’t know where it’s headed. That can be dangerous.Many entrepreneurs have a growing business but they don’t know where it’s headed. That can be dangerous. Click To Tweet
What Are Business Systems?
Business systems – or operating systems – help entrepreneurs define a clear vision and identify a specific plan to bring that vision to reality. These systems are the instrumentation on the plane that shows where it’s headed, ensures everything is running smoothly, and makes sure the plane is headed to its next destination. Without these systems in place, entrepreneurs are flying blind and are less likely to reach their long-term goals.
There are many different types of business systems out there, including the Entrepreneur Operating System (EOS®), E-Myth, and Gazelles. But, most of these business systems share the same techniques – helping entrepreneurs define goals, create processes to reach those goals, and determine a set of key performance indicators to measure the progress along the way.
For example, EOS® addresses six key areas of a business:
- Vision – How to develop and communicate a vision with everyone in an organization.
- People – How to put the right people in the right seats.
- Data – How to define key metrics to manage your business.
- Issues – How to efficiently overcome hurdles to growth.
- Process – How to define processes that ensure everyone is working hard.
- Traction – How to hold everyone accountable and achieve your goals.
Entrepreneurs should spend time evaluating different business systems to figure out what works best for them, while keeping in mind that any business system is better than none.
Implementing Business Systems
Buying a gym membership is no guarantee that you’ll gain muscle or lose weight. Similarly, buying a business system is no guarantee that your business will succeed. The most important part of the process is implementing the business systems and ensuring that they’re running smoothly over time. This can be tricky since many business systems are broad concepts that may be challenging to implement on an individualized level.
There are two common ways to implement business systems:
- Consultants – The most effective way to implement business systems is to hire an external consultant that specializes in implementation. For instance, Trajectory is a consultancy that specializes in helping companies implement EOS® in their businesses.
- Self Implementation – Companies may choose to learn a business operating system and implement it on their own. While this can prove challenging, connecting with other leaders that have done the same can help overcome the learning curve.
Implementers are often well worth the investment for entrepreneurs, but it’s important to carefully vet the talent to make sure they have the right amount of expertise. For instance, Trajectory has over 20 years of executive experience and has implemented EOS® from the inside and on the outside for other companies.
The Bottom Line
Entrepreneurs face enormous headwinds when starting and growing their companies. Business systems and advisory boards can help dramatically increase the odds of success by ensuring that the company is headed in the right direction and making progress.
Trajectory specializes in helping entrepreneurs implement EOS® in their businesses with the help of a seasoned executive with real-life experience.