Running a family business can be a lonely existence. The pressure from senior team members, banks, government regulation, and businesses can overwhelm some. And this is where advisory boards can make a significant difference to the operation of a family business that has progressed away from a “ma and pa” business to a commercially focussed family business.
At Westcourt, we sit on the advisory boards for our clients. And we have witnessed the following benefits:
An advisory board, and the board minutes, are the most profound insight into the professionalism and governance of a business. The minutes will clearly outline current issues and problems within the business and how management treats them. Board minutes will typically compare operational results, financing and investing to the expected outcomes in the 3-way forecasts.
The presence of board advisory minutes and evidence that prior forecasts have been consistently met will demonstrate to a purchaser that the governance of a business is sound and that the future forecasts presented to the buyers are good. This will typically benefit the owners with higher multiple offers and a quicker sale.
Your advisory board will often have family members sit as observers (although not always). And this offers an opportunity for the business to engage family members who might otherwise be not interested as an educational pathway into the management of the business.
Banks and investors look upon a formal advisory board favourably in your business. A bank can, for example, be invited to sit in at an advisory board meeting to witness the professionalism of the business and the quality of the business and the business governance.
Alternatively, a bank can be shown board minutes or a board pack to demonstrate that the ultimate character and integrity of the business borrowing the money is at a high level.
An advisory board can complement the management insight of the current management team. Because the advisory board are not “deep” into the day-to-day operations as specialists, they can focus on the current management team and the owners to look at broader, deeper strategy issues facing the business.
The advisory board will encourage owners to take a more comprehensive look at the business and focus on deeper issues. This time away from the fires of staffing and clients often brings insight from the ownership group about what is needed to make their business great.
An advisory board discusses formal business proceedings. Sometimes, the family issues will dominate the discussions of a meeting in a family business. Creating a formal structure to discuss strategy for the business will also often come with a separate, equally important, formal structure for the family issues to be addressed so that the advisory board for the business focuses on strategy and planning for the business.
At Westcourt, our financial and business acumen gives us a unique edge in informing, driving and monitoring your advisory board. We have decades of experience on advisory boards ranging from start-ups to national organisations. We do so in a cost-effective and controlled manner that is appropriate for the business and its stage of operations – so give us a call and let us show you how we can make your advisory board work for you.