How SMEs can prosper with advisory boards

The opportunity to engage with an Advisory Board is proving to be the answer many small to medium enterprises (SMEs) are looking for. SMEs are a major contributor to NZ Inc, making up approximately 97 percent of New Zealand businesses; contributing to 53 percent to the country’s workforce and contributing to 28 percent of New Zealand’s GDP. Yet for many business owners the challenges of running their companies is all encompassing and often overwhelming which is clear when you consider the high number of SMEs that go out of business every year.
 

Helen Down, founder of Advisory Boards New Zealand says, “The owners of our SME businesses are very time poor and spend most of their time working in their business, just trying to keep it going. Many can feel quite isolated and alone in their role and their industries. An Advisory Board provides an easy yet flexible structure for these business owners to engage external independent advisors. Their Advisors bring their knowledge, experience, skills and networks to the Advisory Board table and are focused on supporting the business in achieving their business objectives. It is also very much about developing and supporting the business owner themselves.”
 

An Advisory Board is a simple, formalised, support environment for the business owner which gets together on a regular basis in a board type setting. A chairperson is appointed to run the meetings with agendas, minutes, regular reporting structures etc. The business owner selects each Advisory Board member for the value they can bring to the company. They work together to provide advice, support, guidance and acting as a sounding board. 
 

“What we find is that the processes and disciplines introduced through having an Advisory Board filters right through the company and that in itself helps drive the performance of the company. Just knowing the monthly Advisory Board meeting is coming up tends to focus all those involved!”
 

According to Helen Down, SME business owners like the concepts of Advisory Boards as it uses many of the structures and disciplines of a governance board but comes with much more flexibility. “It is this flexibility along with the business owner retaining all control and decision making that makes it such an attractive option,” says Down.

Advisory Boards are giving SMEs the support to enter new markets, achieve substantial growth, develop new strategies, and deal with the tricky operational issues faced each day by the business owner. 
 

One business reaping the rewards of an Advisory Board is Wellington based, e-Spatial. The leading independent spatial consultancy firm have had an Advisory Board for over ten years and Managing Director, Simon Jellie, credits the expertise gained from his Advisory Board as being central to his company’s growth and development. “We are in a unique market sector in New Zealand and the strength of advice we receive from our advisory board has kept us on the path to sustainable business growth. We attribute this to having valuable external mentoring and guidance from our advisory board members.”
 

The average SME lifecycle is only five years, and the most common reasons for failure are inexperienced management, and limited resources. Given their contribution to our economy the success of these companies is beyond crucial. New Zealand businesses need to thrive instead of survive and having an Advisory Board alongside the business owners can be the success factor we all need.