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You may have the greatest idea in the world. Maybe it is a product or service or even a new technology. You decide to become an entrepreneur and begin to build a business. Perhaps this business is very successful, or even moderately so. Great news, you clearly know what to do and should continue as such…right?

Actually, perhaps not so right. Even the best innovators and business leaders don’t know everything. And the best of the best are able to understand their limitations, know they have blind spots and realize that surrounding themselves with smart experienced people can go a long way toward growing and improving their business.

These people can, of course, be employees of your company and part of your strong leadership team. But beyond this, there is always the option of forming an advisory board. Many entrepreneurs think that their business is too small or too new to have an advisory board. However, it is at this stage that it can perhaps be most useful.

To briefly clarify, an advisory board is not the same as a board of directors although sometimes an advisory board evolves into a full on board of directors. The central difference between the board of directors and an advisory board lies in fiduciary duty or the lack thereof. Fiduciary duty refers to acting on behalf of another party’s interest and in the case of a board of directors, they have a fiduciary duty to act on behalf of the shareholders of the company.

Advisory boards have no such stringent legal obligation. However, a good advisory board will take their responsibilities very seriously even if they are not subject to the same legally binding structure as a board of directors.

So, who should comprise your company’s brain trust? As with a board of directors, an adept advisory board consists of individuals with varied experience and expertise. As an entrepreneur you want to be able to rely on and benefit from a variety of skills and qualifications. So your advisory board should consist of experienced individuals with an array of backgrounds. Typically, businesses can benefit from proficiency in finance, strategy and marketing. Depending on the particular company, technology, supply chain and legal know-how can be important as well. But don’t let these suggestions limit your thinking. Your advisory board can consist of whatever expertise you require.

Essentially, your advisory board members should be as experienced as possible in their given domain and as broad as possible in the types of work they have done. This brings the judgment, knowledge and hopefully objectivity that we entrepreneurs so often need. The unifying element is that these individuals are interested in your business, have the capacity to be helpful and offer advice and wisdom that you may be missing.

Oftentimes, when an entrepreneur assembles their first advisory board it consists of individuals they already know. Not friends and family per se but rather acquaintances and perhaps even former colleagues. It can be difficult for an entrepreneur to identify and recruit advisory board members with no prior exposure. However, this is not a rule but rather a convention and I do believe that one should always aim high as you never know what a person may be interested in unless you ask.

There is also the question of remuneration for advisory board members. Surprisingly, oftentimes there is none. These individuals agree to participate because they have a genuine interest in the business and/or the entrepreneur. Sometimes a small equity stake is provided or a stipend. This really depends on what you are able to afford and willing to give. This is an important determination particularly in the case equity dispersion. Best to consult with your legal and financial advisors.

Advisory boards don’t necessary meet according to a fixed schedule like boards of directors. They are instead called upon on an as needed basis. That being said, a yearly dinner can go a long way towards solidifying relationships and allow your advisors to benefit from each other.  

So what are you waiting for? With some up front effort and energy you too can assemble an impressive and effective group of advisors who may help you bring your business to places previously unimaginable.