The Hidden Cost of Not Having an Advisory Board

You never see this cost on a statement. It shows up as years.

When owners think about joining a board, they price the fee. Almost nobody prices the alternative. Doing nothing feels free, so it wins by default.

It is not free. Here is where the bill comes from.

Slow decisions

Without a group to test ideas on, big decisions sit. You circle the same question for weeks because there is no one to say "here is what I would do." A board compresses that. You bring the decision, hear four honest takes in an hour, and move.

Weeks of delay on a pricing change, a hire, or an acquisition are not small. They add up to quarters.

Repeated mistakes

Every owner makes mistakes. The expensive ones are the mistakes someone else already made and would have warned you about. A bad hire. A client who never paid. A contract you signed too fast.

A group of owners has collectively made most of the mistakes you are about to make. They tell you what each one cost them. Hearing it is cheaper than living it.

Mistakes a board catches

Frank Holt, an entrepreneur profiled by Verne Harnish at Scaling Up, said he could have avoided three costly mistakes if he had put the decisions in front of an advisory board first. After the third, he formed one.

Karen Usher, who runs an outsourced HR firm, credits her advisory board with helping drive 85% revenue growth in 2002 and another 35% in 2003.

Both examples come from a 2010 article.

The ceiling

Here is the cost I think about most. What got you to a million will not take you to five. Without people who have crossed that line, you hit a ceiling and take the wrong lesson from it. You work harder and burn out, and you decide the market is the problem.

Often the ceiling is not the market. It is the fact that your skills were built for the last stage.

Isolation

Carrying every decision alone wears people down. Owners get tired, and tired owners make worse calls and enjoy the work less. Not many put a dollar value on that. It is still a cost.

A fair counterpoint

A board is not for everyone. If you are early, one-on-one coaching fits better. If you are certain you are the smartest person in any room, you will waste your money. We do not want members who are cocky. But if you are past a million and carrying it alone, you are already paying. You just do not get an invoice.

Come see what it looks like at a TAB Austin CEO Roundtable.