I started Salsa Queen as a single mother to provide for my seven children. We began at the local farmers’ markets and grew rapidly to where we are now in more than 100 stores. From all appearances, things are going great. We are expanding regionally and ship online throughout the US. Revenues are increasing and we are profitable. So, why implement a Board of Directors now even though we are still a small business? As I thought about it, I realized there are five main (and probably more) benefits of a Board, especially relevant for small businesses:
Sometimes, being the founder, you can become so focused on where you think your small business should go that you miss out on even bigger or better opportunities. A Board can help sharpen your focus and validate or even invalidate your assumptions. Either way, you save time, money and effort by avoiding distractions and dead-end paths. Plus, having a Board in place will give you greater confidence in your business’s direction so you can focus on execution and not second guessing.
Having Board members with relevant experience is crucial, especially if they have gone through similar stages of company growth. One of the hardest jobs is finding and qualifying the right person to help solve a problem. Your Board can connect you with proven experts that can accelerate your growth or even introduce you to new strategic customers. Plus, the Board can provide guidance in avoiding the pitfalls they experienced across the spectrum from finance, legal, marketing, and operations. The Board will often be able to identify issues before they are even on your horizon. Their relationships and experiences are priceless.
We all see things that need to be done in a company. We prioritize these things differently based on our backgrounds, experiences, and relationships. Fortunately, a Board can help align priorities within the overall vision. If your priorities really make sense, then having the Board review and approve them should not be an issue. However, if you are ‘blinded’ or ‘biased’ because you are the founder with ‘the Midas touch’, then the Board can be crucial in providing independent, unbiased direction on priorities.
With multiple founders or partners, there can be conflict in terms of how to grow or optimize the business. Naturally, conflicts may cause your business to become distracted or even worse, introduce behaviors that actually start an internal cancer to fester. The Board can also help avoid situations where you ‘go outside of your lane’ and start injecting yourself in other areas.
The Board can mitigate and even resolve these conflicts by providing independent direction and resolution.
Perhaps the most important benefit of a Board is making the founder(s) accountable. As the founder, it can be easy to feel that you are the ultimate boss and the business will accommodate you and your schedule. With a Board though, you now have to answer on how you are contributing to the business’s vision, priorities, and growth based on your assigned tasks and areas. Once assignments are made and reported on, then execution increases dramatically.
One piece of advice: Don’t get Board members who are ‘yes’ people. You want Board members who are concerned about the long-term growth and viability of your business, even though you might not always agree. Board members need to be competent, independent, and trustworthy.
So, while a Board may seem like more cost and another layer of bureaucracy, it will be the best thing you could do to accelerate your small business’s growth and viability.