When forming small businesses I am sometimes asked whether the owner(s) must form a board of directors consisting of members from various backgrounds who are not actually owners of the business. While it may work in certain situations, I have not seen this model work real well for most small businesses. By their very nature, many small businesses are highly entrepreneurial and generally the owner(s) does not want consult a board for approval or have the board looking over their shoulder on every move. Generally, it seems most small business owners choose to limit their board of directors only to the owners of the business.
But isn’t the advice of others (often more experienced entrepreneurs) helpful to the business owner?
One possible solution is to form an advisory board. The advisory board does not need to be anything formal and the members do not actually need to meet at the same time. The advisory board may simply be a collection of individuals you ask for advice on a periodic basis. We all could use mentors. An advisory board can be a great way to receive input from others without giving up any power in the decision making for your business. For advice on how to form advisory board for your business check out this article from Kaufman eVenturing.