by Franchise Accountants
last updated 26/06/2020
Creating A Competitive Advantage
by Franchise Accountants
last updated 26/06/2020
Philip Morrison of Franchise Accountants outlines 6 key benefits an advisory board can bring to your franchise
We operate in challenging times, which means moving your business forward this year may require some fresh thinking. What does the future look like, and how can franchisors prepare their systems for change?
Here are some thoughts from the award-winning team at Franchise Accountants on how appointing an Advisory Board can help your franchise – and your franchisees. Nick Turner, co-founder and director of the Sals Pizza network, says his only regret was not having one earlier. ‘The big picture strategy contribution of advisory board member Philip Morrison has been invaluable, along with understanding the day-to-day numbers.’
What is an advisory board?
An advisory board is a middle ground between operating as sole owner/CEO of a business and having a full-blown board of directors in place. It operates in a supportive capacity to the business owner and operates in a simplified practical format.
When set up and operating correctly, an advisory board can deliver the following benefits:
1. Invest in you the business owner
No man is an island, yet many business owners operate in isolation. We all need support structures around us. We seek doctors’ advice for our medical needs, physio for sports injuries, personal trainers for fitness, etc, but who do business owners talk to as a sounding board? An advisory board can provide independent perspectives from a position of knowledge.
2. Reducing risk
Improving business performance and resilience requires intentional focus. While some business owners network informally with peers to pick their brains over a beer, elevating your governance means shifting from “Beers to a Board”. An advisory board can provide a focused, structured meeting with intentional outcomes.
3. Successful succession planning
When stepping back from the helm and appointing a successor or general manager, franchisors would benefit from the counsel of a well-functioning advisory board. It provides a forum where a professional manager is supported, given guidance and can be held accountable for decisions.
4. You keep control
Advisory boards guide, director boards decide. This is an important distinction. With advisory boards, the owner makes the decisions and appointments after consultation. This is different from a board of directors, which has fiduciary and legal requirements and makes binding decisions by majority vote.
5. Improved decision-making
Two heads are better than one. Business owners need a sounding board and accountability for the strategies and direction of the business. Having these challenged and refined can often lead to better decisions and outcomes. ‘Gut feel’ leadership is a very common compass for business leaders. An advisory board can challenge things around timing and execution, and lead to improved implementation.
6. Create competitive advantage
Elite sports players and teams have support teams around them; in the same way, your advisory board can create a competitive advantage through using its mix of skills, expertise and experience to find and develop those competitive levers which position your business to be market leaders not followers. Your advisors also have other networks your business can benefit from.
Frequently asked questions
When talking to franchisors about advisory boards, there are a number of standard questions which come up.
How does an advisory board operate?
Advisory boards require a structured approach which helps shorten meetings and ensures they are more effective. An advisory board creates a disciplined framework for reporting formally on a regular basis and brings accountability around execution.
What does it cost to operate an advisory board?
That can vary depending on the number of advisors you deem necessary and how often you meet. The investment in forming an advisory board should be measured by the value of the outcomes you achieve from having one. Stuart Deeks, the founder of the original Esquires franchise, recalls, ‘The value was immense in terms of setting clear objectives and ensuring progress toward them.’
What is the role of advisors?
Defining the role and expectations of board members is an important element. Franchise Accountants recommends a brief be developed as to the nature, duties and expectations of operating in an advisory role.
How many advisors?
In our experience, the number can vary from one to eight. Sometimes a smaller group can have better dynamics than a larger group. The number of advisors can be dependent on what stage of the business life cycle you are at.
How to select advisors?
Typically, you are looking for the right fit. Finding advisors with the right profile who you can work with requires assessing skills, experience and chemistry. It’s worth considering getting some advice on how to work through short listing the right candidates. It’s about filling in the skill gaps.
Franchisors have some unique points of difference from other types of businesses. Advisors who understand the nuances of franchising and have been exposed to a range of franchise environments would be advantageous, and can better leverage their commercial knowledge, skills and experience.
If you are interested in establishing an advisory board, contact Philip Morrison from Franchise Accountants. ‘We have a deep knowledge and understanding of the franchise sector gained over many years,’ he says. ‘We’re happy to offer an initial complimentary meeting to discuss your requirements further. Call me and let’s talk.’
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