From the course: Creating a Business Plan

Getting advisors

From the course: Creating a Business Plan

Getting advisors

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- You may be smart, but it's even smarter to surround yourself with other smart people. This is the role of advisors for your business. And you should spell out who those advisors are within your business plan. There are several types of advisors you can pursue. There's an advisory board. An advisory board typically gets brought together during the earlier stages of your business. They can help you get customers, investors, they can help you build out your team, and they may play an ongoing role as your organization grows. There's a board of directors. These people are formally elected and have legal responsibilities. They're typically not needed until you receive outside investment and you have shareholders. The board serves as experts on special topics. There'll be responsible for compensating management and holding management accountable to shareholders. Other advisors you can have are specialists. They're brought in to advise on a specific topic. They're not usually involved on an ongoing basis and they can be paid as consultants or you can pay them with equity. And your board should change as the business grows and as the needs of the business evolve. For example, there's a startup that I worked with initially and my friend asked me to become a member of the advisory board. The business was just getting started and I had specific expertise on one area where he needed guidance. We got some stock options in the business and the board of directors was formed later when there was full investment in the company. At that point, when a formal board of advisors was built, the advisory board, the informal one was disbanded and we transitioned the advisor role. So think through your advisory needs for your business, identify who those people are, and what the structure of those advisory boards will be.

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