Board of Directors

You need extra eyes looking at your business plan.

Find people with expertise in a variety of areas and meet with them twice a year. The big secret on how to recruit them: free food. Never underestimate the power of free food.

Here is an example from working with one of my clients.  He started his firm at the beginning of this year and discussed his business plan and strategy with me. At a previous employer, collections lagged services rendered by 6 months or more.  Being a new firm, he knew that his cash flow would become unmanageable if his collections were so slow.

The opportunity we saw for him was to provide a discount for early payment.  I suggested the common 2-10, net 30 arrangement.  He could write into his contracts a 2% discount for payment within 10 days, or the total due at the end of 30 days.  An arrangement like that is often used in manufacturing, but not so much by law firms.

Find people with accounting, tax, legal, business structure, and banking backgrounds. Sometimes you will find areas where you are paying unnecessary taxes or missing opportunities to put money away tax-free. Sometimes you will be missing opportunities to expand your market. Sometimes your marketing is not impacting your target customer correctly.

For another customer, I was discussing how to do a marketing plan for a business that is dominated by small, private owners who, as far as business analytics go, are not all that sophisticated.  There just wasn’t much data to include in a marketing plan to show potential investors.

Our solution to his problem was to consider the substitutes his business competed against.  By using their more accessible market data, he learned a great deal about his target audience which shows how his marketing plan was perfect to reach them.

Because you are in the thick of your business every day, you miss obvious problems and opportunities. That’s why you need extra eyes looking at your business.

Go to you local chamber of commerce or small business association.  The people you meet there are perfect candidates for your small business board of directors.  Return the favor.  Serve on their board of directors.  You will learn things from both sides of the relationship which will make your business better.

Tags: Business Development, Creativity, Strategy, Team

This entry was posted on May 21, 2010 at 10:17 pm and is filed under Business Plan, Strategy. You can follow any responses to this entry through the RSS 2.0 feed.