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The CEO of a large corporation can lean on the company board of directors for advice. But small-business owners are often on their own in the face of major decisions with lasting consequences: hiring, firing -- even taking the whole enterprise in a new direction.
As an entrepreneur, you can of course hire a consultant, an attorney or a CPA depending on the type of counsel you need. But what if you had your own advisory board made up of other small-business owners who could provide frank feedback and help you tackle tough challenges?
Starting a business six years ago, Rick Maher was seeking advice when he went online and found The Alternative Board, which provides advisory boards and business coaching for small-business owners. Maher signed up.
'I knew I would need people'
“I had the entrepreneurial itch, and I knew I was a good salesperson and I could go out and get clients,” Maher tells NerdWallet. “What I didn’t know was how to run the business. I knew I would need people to help me understand what running a business truly means versus owning my own job.”
To be sure, a survey by the National Federation of Independent Business Research Foundation found that 23% of small-business owners did not look to any person for advice when contemplating a business challenge or decision.
TAB operates advisory boards in the United States and 10 other countries through its franchise network. The organization has more than 4,000 members. Business owners pay a monthly membership fee of $450 to $1,000 depending on company size.
Here is how TAB works: You sit on a board with seven to eight owners of similarly sized businesses in noncompeting industries. You meet once a month for four hours when each owner can talk about a challenge or issue. The other members can ask questions, provide feedback and advice. You also get one-on-one coaching.
Topics vary from finances to hiring and firing to marketing and sales, Zickerman says.
“It’s business owners helping business owners based on their knowledge, experience, successes and failures,” Zickerman tells NerdWallet.
Two TAB members share how the organization has shaped their businesses:
'I would have lost everything'
Rick Maher, CEO and partner, Effective Human Resources in Port Jefferson, New York
Maher kept hearing about human resources issues from his clients and realized there was an opportunity there. So he went to his TAB board and presented a major challenge: “I don’t know if I’m crazy but these are the problems that I’m identifying that no one’s solving for these clients. What if I could solve them?”
His board members, Maher says, peppered him with tough questions and guided him through the transition into the HR consulting business. Effective Human Resources helps small businesses with compliance, employee issues and company procedures. The firm also provides HR staff to client workplaces once a week.
Most recently, the board helped Maher choose between two strategic paths to grow his business: Add other services such as CFO staffing and business coaching, or offer more HR services.
Even though Maher was leaning toward broader services, the board pushed him in the other direction. So Maher developed two software packages -- one focused on performance management and the other on leadership management -- to help his business keep clients for the long term.
“That was a big strategic concept that needed to be wrestled to the ground, and most importantly, the decision had to be right,” he says. “If I made the wrong decision, which I would have made on my own, I would have lost everything, instead of being on a growth track.”
'We have the same issues'
Mark Rickard, CEO and president, Rickard Squared in Hauppauge, New York
Mark Rickard, who manages the family direct-marketing business, has been a TAB member for 12 years. And during those years, he’s had his share of challenges. Through them all, Rickard says his board has been an invaluable advisor.
“The issues of other people in the group are similar,” Rickard tells NerdWallet. “We have the same issues with personnel and financing, same issues with growth and marketing and same issues with respect to strategic acquisitions and things like that.”
His TAB board suggested that Rickard consider selling the unit. That is exactly what he did. “I was able to generate value from it,” Rickard tells NerdWallet.
And when the direct-marketing industry was moving into the digital world, Rickard says his board helped him navigate the transition.
“TAB is about goal setting, and even if you don’t have a pressing issue in a particular month, you go back to the goals you set for the years,” says Rickard, a member of the Hudson Valley Direct Marketing Association. “It’s all about accountability."
Photos, from top, of Jason Zickerman, Rick Maher and Mark Rickard.