Many entrepreneurs and CEOs ask me if they should create a formal Board of Advisors so they can get advice from experienced leaders or well-known figures in their industries.
The most common reason to create a formal advisory board is to allow you to promote the stellar credentials of your advisory team to the world. In return, a well-known advisor will typically get something valuable for their advice and use of their name – stock options are a typical form of payment.
Before you get formal, I recommend that you make the most of individual relationships with informal advisors and mentors. There are plenty of experienced business leaders who will gladly discuss and offer perspective on the big questions of your business without having a formal relationship or even payment.
You should cultivate at least ten trusted advisors and mentors that you can call on occasionally to ask for advice on the big questions in your business. These informal (unpaid) advisors may include successful leaders in your industry, a former boss, coworkers, other CEO’s, parents or friends.
Networking and cultivating these relationships takes work, but experienced advisors can provide valuable perspective and guidance when you need it.
Keys to working with informal advisors:
Remember, one of the best things these people offer you is an outside perspective. They are not working all day and all night in your business. You probably lost perspective the moment you got crazy about your business idea long ago.