When in search of advisors for your firm, one of the first places you are likely to look is in the non-executive director community. Another may be through a previous client relationship. There can be benefits to using these types of advisor but you also run the risk of surrounding yourself with people that don’t have the relevant experience to help you grow your consulting business.
For example, in the non-exec director community most are likely to have worked in large corporates. They will be able to offer very good advice on matters such as corporate governance but this isn’t applicable to an entrepreneurial consulting firm looking to grow quickly.
Similarly, how useful is someone from within a client community? If they have previously held a senior-level position and now have a portfolio career, have you taken them on to your board because of your previous good relationship, or because their rolodex can deliver you new business?
Both types of advisor can charge from £30-£60K to attend anywhere from 4-12 board meetings a year. Does this offer you good value?
There are cases when such contacts do work but this is when there is a rotation system; an advisory board is refreshed every couple of years, and there is a strong financial advantage to having each member through the contacts they offer you.
The advisor you will most benefit from understands the growth issues of a small consulting firm; knows how to bring in the next big piece of business; anticipates problems, and draws on previous experience to solve them.
So yes, trust is important but just one element of what you need. The right experience is essential and what you should be looking for in an advisor that offers you and your firm value.