The advice we offer and the discussions that take place among our entrepreneurs center on five key tips:
Look outside your existing network of contacts. As you sit down to think about whom to invite onto your advisory board, remember first that this should not be a group of your friends and fans. You’re looking to drive new business opportunities and new ways of thinking with diverse experience, expertise, viewpoints, and skill sets. Work to find people outside your inner circle who have built successful businesses and can pass that knowledge on to you. Think about who would be a constructively critical audience, and who can provide access to other valuable contacts, from potential customers, suppliers, and strategic partners to financiers, publicists, and other professional service vendors.
Recruit a well-known community member or industry influencer as your first board member. There is a reason that film producers begin their projects by lining up the most bankable talent they can. Their involvement helps to attract others who want to work with them, or who simply see a star’s commitment as reassurance the project will take off. In the same way, entrepreneurs should work first to recruit the people who will attract others, and give an advisory board strong credibility from the start.
Invest the time in developing relationships with your board members. Since most are not compensated, their reward is the satisfaction of sharing their knowledge and experience and helping you succeed. So make them feel appreciated! (Meanwhile, if a prospective board member does insist on being compensated, determine how uniquely valuable he or she is. If there’s a possibility of a long-term business relationship, you might want to offer that person some kind of remuneration.)
Establish goals and expectations for the board up front, including how often it meets and where. Usually, in-person meetings once every three to six months will suffice, but you may want to reserve the right to consult with individual members on an ad hoc basis if a particular issue comes up. When the board does meet, make sure there is an agenda with specific goals. Your board members are busy professionals, so don’t waste their time. Perform a yearly assessment of how the board is working. If you can afford it, invite them to an offsite at a comfortable locale at your expense to have them discuss the board’s progress.
Have a framework for transitioning out board members. As a high-growth entrepreneur, your business will evolve, and you will likely need advisors that bring different skills to the table at different phases of growth. Most will not have the time to serve on your board for more than two or three years, anyway. And others may not be as helpful as you had hoped. So, make it clear up front that they serve as needed and spell out term limits.
Finally, if you’re thinking of setting up an advisory board, be very clear on what it is, and what it’s not. It’s not a formal board of directors, which has well-defined duties including a fiduciary one. An advisory board holds no legal or financial responsibility for the decisions you make.
Instead, it is a group of volunteers with knowledge and skills that you, the business owner, lack, and whose purpose is to help you make your company a success. It is there to assist you, challenge you, guide you, and open your eyes to new opportunities.
For a high-growth business, it is difficult to overstate the importance of that kind of support. Advisory boards allow entrepreneurs to leverage others’ specialized knowledge while honing skills and talents of their own. Reaching new markets, accessing new forms of funding, adopting new technology, and garnering information to manage risk are all necessary to scaling a sustainable entrepreneurial venture. A strong advisory board is one of the fundamental building blocks that will allow you to take your business to scale.
About the Author
Kerrie MacPherson is a principal at Ernst & Young LLP and executive sponsor of its Entrepreneurial Winning Women program. She has served on EY’s Gender Equity Task Force, is an active leader in its Professional Women’s Network, and is the Diversity and Inclusiveness Champion in the Financial Services Office Advisory Practice.
* This article originally appeared here.
Five Startup Lessons for Fast-Growing Companies
By Kit Hickey
Within our first month of publicly launching Ministry of Supply in June 2012, we sold more than 6,000 shirts and gained 4,000 customers. Our company grew fast because it had to. We were an adolescent trapped in a baby’s body — we had to learn how to sprint before we could learn how to walk, and we had some serious growing pains as we tried to scale production from 300 to 6,000 shirts a month.
However, we quickly realized that by empowering our customers and empowering our company, we could truly grow the way we wanted. Everything we do comes down to empowering people to be their best.
As a co-founder, I focus a lot on how we can scale our team, our operations and our distribution. We’re a startup, and face many of the same challenges that startups face. Here’s what we’ve learned along the way about managing fast growth.
Championship vs. Ownership
There are six members of our team, and we all champion different areas of the business. For example, co-founder Gihan Amarasiriwardena focuses on product development and technology. Devin Cook, head of Customer Advocacy, spends all day thinking about how we can make customers as happy as possible. Over the months, we realized that we worked better as a team when we moved away from ownership and moved towards championship.
This philosophy ensures nobody feels possessive about his or her area of focus, while encouraging teamwork and collaboration. So while Devin may be focused on customer happiness, we all chip in with ideas and often have company-wide brainstorms about improving the customer experience. As champions, we’re all really proud of the areas we focus on and are encouraged to get others behind our initiatives.
Holistic Views of the Business
I love knowing what’s going on in all areas of the business, and we’ve found that everyone the team does too. We have an open office space and are constantly talking and bouncing ideas off of each other throughout the day. A few months ago, we realized that our communication wasn’t great despite the fact that we spent all day talking – some people didn’t know what was going on in various aspects of the business because decisions get made so quickly and a lot of decisions get made outside of the office.
We’ve been trying to get better at making sure that everyone in the company knows what’s going on and has a holistic view of the business. Being transparent and giving everyone the opportunity to know as much as they can enables everyone on a team to be their best.
Agile Problem-Solving
We act fast whenever we see problems. When we realized that some of the shirts we were shipping were running too slim, we halted production, created a new pattern, trained our manufacturers, and got better-fitting shirts on the market in three weeks.
Being able to adapt quickly and iterate in real-time is a huge benefit of a startup and we will forever try to retain that ability. In this example, by acting quickly to solve a problem, we were able to minimize exchanges — and more importantly, make our customers happy.
Technology Is in Our DNA
As a fashion brand born out of MIT, we use technology to create the best products possible — from our use of thermal mapping to optimize venting in our Aero pants design to the NASA phase-change performance materials we use in our Apollo shirts.
We truly believe that technology can improve everyone’s lives and we democratize technology through apparel. As such, we don’t stop at the use of technology in product development; we leverage technology in every touch point of our brand.
Brand Is Culture
At Ministry of Supply, we all live and breathe the mission. We are intentional about hiring people who fit both our brand and our culture. When we take company retreats, we challenge ourselves to be our best. Our last one included hiking and winter camping in negative degrees. We want our customers to be their best and our employees to be their best. Everything we do comes down
to that.
Obviously a startup is a tremendous amount of work and nothing is certain. However, by staying true to our mission and empowering our customers and employees, we know that we’ll be here for the long haul.
About the Article
Kit Hickey is the co-founder of Ministry of Supply, a brand which is inventing the future of men's professional wear. The company has been featured in NYT, TechCrunch, Inc., Forbes and Elle Magazine. In addition, Kit is a lover of mountain sports and has half an MBA from MIT. Follow her: @kit_hickey
Set Goals – Evaluate and Re-Evaluate Often!
By Deb Bixler
Anyone who works from home probably knows how important it is to set goals. Many do not realize though that when working at home it is even more important than ever to have a written business marketing plan in place as opposed to some wishy-washy unwritten goals.
You may have heard of smart goals but not everyone knows how to set SMARTER goals.
SMARTER stands for Specificity, Measurability, Attainability, Relevancy, Timeliness, Evaluation, and Reevaluation.
The first part of SMARTER goal setting is the S- be specific in your goals. Don't set vague goals or else you'll be prone to saying you completed your goal when you didn't really accomplish anything. The more specific, the better.
The M means to make sure your goals are measurable. If you can't measure your goal then how can you say whether or not you actually completed it? Instead of saying "Work on Project A" make it a goal to "Spend two hours on Project A." Time goals are extremely easy to measure.
Make sure your goal is attainable. If you can't actually attain your goal, then you're just going to bring yourself down when you fail. It's important that you set goals that you can actually accomplish so that you're not ruining your morale.
Your goals should also be relevant to the project you're working on. It's okay to have a few goals for another project, but the majority of your goals should be focused on the main project you need to accomplish. Making progress on another project is good, but not if it comes at the cost of not making progress on the more important project.
Make sure your goals are timely. Don't set goals for ages down the road. Instead, set smaller goals more frequently. If your goal is to finish Project A by the end of the month, then that gives you plenty of room to slack off. But if you have smaller goals throughout the month, you won't be able to slack off. So instead of setting one large goal, set smaller, more frequent goals.
Before you start working, you should evaluate the goals you've set out. This is important for two reasons. The first is to make sure you've followed the goal setting procedures we just described. The second is so that you have a game plan for that day or week. You'll know what you're getting into.
At the end of your goal period, whether it's the end of the day, week, or month, you also need to reevaluate the goals you set.
Did you accomplish all of them? If not, figure out why not. Was it a problem with the goal itself or was it a problem with your work habits? What can you do to ensure you hit all of your goals next time?
If you follow this path of SMARTER goal setting, then you'll see a huge increase in your productivity.
When you don't have someone looking over your shoulder every day, it's very easy to slack off. With these goal setting methods you'll be able to hold yourself accountable. Trust me, you'll be glad you started using this method of goal setting.
About the Author
Deb Bixler is a direct sales trainer who used a party plan business to her corporate job position. She now teaches wanna-be direct sellers how to start a party plan business and work at home.
Calculating Your Business’ Available Working Capital
By Meredith Wood
Working capital is essential to running the day-to-day of your business. Without it, you simply can’t keep the lights on. Determining the amount of capital you have to work with each month is certainly not easy, but it can be done, and it must be done. It’s essential you know how much you have to spend, so you don’t overspend. Therefore, become a pro at managing both your liabilities and assets, giving you a complete understanding of your working capital and allowing you to use this cash to its fullest potential.
Managing Your Liabilities
In short, current liabilities are what money your company currently owes people such a suppliers or creditors. It’s short-term debt, all due within the year. In order to pay these liabilities, you have to turn your assets into cash to do so. It’s important you keep watch over these figures when trying to properly assess your working capital. How do you go about doing so? It’s all about understanding who you owe money to, and when it is you owe them this cash.
1. First, start by always having reminders set in your calendar of when your payments are due. Make sure the reminder is set not only for the day of but also at least a week in advance, giving you enough time to prepare payment. Be diligent about getting those payments in on time.
2. If you owe multiple payments to a specific lender, be sure to specify what a payment is for.
3. If you are struggling with your cash flow (or you simply forget a payment date), be sure to start a conversation with your creditors about it. When you keep this sort of relationship with your lenders, it will let them know you aren’t ignoring the debt and can sometimes lead to them being more accommodating.
4. On that same note, if cash is tight, ask your lender if you can send a post-dated check that can be cashed in thirty days. Some will be ok with this. Just be sure the check doesn’t bounce, as this will take away the opportunity to do this in the future.
Managing Your Assets
Your current assets are any cash your business has or anything else you can expect to convert to cash. Examples of these assets are:
1. Cash or Cash Equivalent - Currency and deposit accounts.
2. Receivables - Any money you are waiting to receive from customers for a product you have old or a service you have provided.
3. Inventory - Any goods your business has in stock. Be aware there are different types of of inventory. For example, your first type of inventory is materials and components. These are the items that are needed to make the finished product. The second is progress inventory, and this refers to partially completed items. The third type of inventory is finished goods. These are any final product ready for purchase.
4. Short-term Investments – Includes such things as securities bought with intention to be sold to generate income on short-term price differences.
5. Prepaid Expenses – Expenses that are paid for and recorded as an asset before use (i.e. insurance).
All of the assets listed above are important to manage in different ways. For example, it’s crucial that you always keep an accurate assessment of the inventory your company keeps in stock. It’s also super critical you actively pursue any open invoices you have so you can turn those receivables into liquid cash faster. Most importantly, however, it’s important to keep a watchful eye over the actual cash you already have. Cash is king in your small business, and it’s important you understand what this cash is being used for. To do so, be diligent in both your cash flow forecast and cash flow monitoring. Tracking every dollar in and out is precisely what needs to be done.
In short, the amount of working capital you have is the total of your current assets minus your current liabilities. Be certain you are keeping track of these two figures to guarantee your working capital calculation is as accurate as possible, ensuring you know exactly how many dollars your business has to work with.
About the Author
Meredith Wood is the Director of Community Relations at Funding Gates, an online application for small businesses that allows them to track, organize and manage their receivables all with simple clicks. An avid small business writer, Meredith’s work can be seen on Amex OPEN Forum, SCORE, the Small Business Bonfire and many other small business sites. Connect with Meredith on Twitter @FundingGates.
Fear - The Entrepreneur’s New Fuel
By Tabitha Jean Naylor
Fear...it’s something that young entrepreneurs hear plenty about.
They tell you fear isn’t real, that it’s something that people create in their minds. That it shouldn’t effect you because you, yourself, made it up. But how often has this mindset actually helped you start a small business or jumpstart your entrepreneurship development?
I’m going to take a wild guess and assume that it hasn’t. You’ve looked up and down the internet, read books, listened to speakers, heard all about other peoples’ entrepreneur success stories. The fear, however, still persists. It’s still there, slowly eating away at your morale.
The bottom line is that fear is real. It’s very real. If it wasn’t, you wouldn’t feel it.
Dealing with fear, realizing that it’s going to be a part of the journey, is the only way that you’re going to become a successful entrepreneur. You can scour the web and read every book imaginable on how to deal with your fears but until you realize that fear is going to be a part of the process you are going to struggle.
It’s all about making a decision that your comfort zone is not a place that you want to be. Understanding that fear is going to be there every step of the way and falling in love with the feeling of your stomach tightening every time you make the decision to face those fears. That’s what is going to help you develop into the type of business entrepreneur you want to become.