Entrepreneurs share expert advice on small business

ADVISORY BOARDS

December 09, 1991|By Adriane Miller | Adriane Miller,Special to The Sun

When Al Cleaver needs to vent a worry or frustration about the custom home decorating business he owns with his wife Donna, he can't do so in front of his nine employees. They depend on his confidence and business sense for their job security.

And while the Cleavers are able to resolve many questions about their business, Interior Images Inc. of Columbia, sometimes an objective opinion from an outside adviser is what they really need to solve marketing, financial and administrative puzzles.

So, once a month for the past two years, Mr. Cleaver has taken half a day to meet with about a dozen other business owners and entrepreneurs.

They are willing to listen and advise him. And all they expect in exchange is his expertise and support when they need it.

Mr. Cleaver is a member of an advisory board, a group of top-level executives from different companies who meet to share information in a non-competitive, confidential and objective setting.

"We meet for the opportunity to speak freely about issues -- things you can't discuss with your employees because it intimately involves them, and things you don't want to discuss with your competitors," Mr. Cleaver said. "I go to get advice from people who are on the firing line every day."

He and other small business owners say advisory boards are an inexpensive and reliable source of expert help for entrepreneurs. Within the group, they can air frustrations, share victories, and confess indecision or even ignorance. Because boards usually include only top-level executives, participants also can help each other deal with one of the toughest breaks of owning the store: being lonesome at the top.

"In a large environment you always have peers, and you have many levels of bosses. But when you become an entrepreneur, it can become pretty lonely," said Shirley Collier, president of Paragon Computer Services Inc. in Ellicott City. Ms. Collier began her business in 1989 and has been a participant on an advisory board since 1990.

"You need to bounce your ideas off someone who isn't emotionally involved with you, your business or your industry," she said.

Looking for and testing new ideas on other company leaders isn't new. But especially now, with company resources stretched to the limit, small business owners and entrepreneurs often don't have the funds to pay consultants for advice.

What entrepreneurs usually have in abundance is ideas, know-how, and eagerness to help other companies in similar circumstances, said Paul Riecks, co-owner of The Business Network in Baltimore. Mr. Riecks and partner John Barkdoll help companies establish advisory boards and serve as moderators when board members meet.

Mr. Riecks said companies need an outside advisory board most when they are growing from the stage where the entrepreneur manages all functions of the business to the stage where he or she has to give up some control.

"That seems like a simple step, but often the owner gets stuck," he said. "Most people can get technical knowledge about business, but there's nowhere you can go other than real time to learn how to run a business. A lot of dysfunction occurs in business because people don't know there are other people they can align themselves with."

In an advisory board, organizations band together in strategic partnerships, and no one is permanently attached.

Fred Walpert, managing partner with Walpert, Smullian & Blumenthal, a CPA and management consulting firm in Baltimore, said advisory boards gain their strength because the participants are not attached to the same companies.

Most closely-held firms have boards of directors made up of family members and other individuals connected with their companies, Mr. Walpert said. "But the board of directors has an inbred perspective on business matters. Everyone has their own selfish interests and biases based on their role in the operation."

As a result, he said, entrepreneurs who rely solely on boards of directors for help are not using information outside their companies or getting fresh, objective points of view.

Also, he said companies struggling with strategic moves are not likely to find the help they need through their local chambers of commerce or trade groups. Such groups are good for networking and exchanging sales leads. But unlike advisory boards, Mr. Walpert said, the groups are not exclusive or confidential.

"You're not going to reveal anything at a chamber of commerce meeting because your competitors are there," Mr. Walpert said. "There's no possibility of developing trust in the group."

Hillard W. Cohen, executive vice president of Elias Wilf Corp., a fourth-generation floor covering company in Owings Mills, said every company needs an outside advisory board.

"Anybody who operates with the idea that they have all the answers is just not where it's at," Mr. Cohen said. "You learn everyday, even if you're a 75-year-old company."

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