2017-03-01 00:00:00 Running a Business English Explore the benefits of having a board of directors for your new small business as you plot an uncharted business development in the new... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Employees-at-meeting-room-table-discuss-board-of-directors-agenda-with-white-board-in-background.jpg https://quickbooks.intuit.com/ca/resources/business/board-of-directors-small-business/ Why Should You Set Up a Board of Directors for Your Small Business?

Why Should You Set Up a Board of Directors for Your Small Business?

2 min read

You might think setting up a board of directors for your small business is an activity reserved for large corporations, but this is actually not true. A new small business is no less in need of a board of directors, and maybe more so at times. A board of directors is comprised of people from different backgrounds with various expertise who can offer strategic business guidance, valuable inputs on corporate governance, and business connections for relationship building. Don’t be surprised when you see how well a board of directors can help your new small business develop better business plans, solve inevitable organizational issues, and build business relationships in the marketplace.

Strategic Guidance

After getting your small business up and running, you want to make sure it continues to move in the right direction and you’re able to make strategic adjustments when it becomes vital to do so. These can be life-or-death business decisions and require deep understanding of strategic planning and broad experience to execute. Unless you’re a serial entrepreneur and have done a lot of strategic thinking in your past business pursuits, you’re better off seeking the advice of a board of directors. These are the people who have successfully done it in their own business careers, and the recommendations drawn from their real-world actions can be invaluable to you, things you can’t get by simply scratching your head.

Business Governance

You shouldn’t underestimate the importance of organizational skills even if you’re a new small business owner with few employees and limited departments to manage. Having a good product or service for a well-targeted market is not enough. If people can’t work in coordination within different capacities, be prepared to see yourself scramble with inevitable hiccups and glitches, to say the least, when trying to carry out all the business activities. Thankfully, when you have a well-constructed board, with both strategic thinkers and management experts, you can learn from the managers about how to best motivate those working for you, including using proper financial incentives, as well as how to set up a more streamlined organizational structure to facilitate operational efficiency.

Business Relationships

As a new small business owner in the marketplace, you’re likely to find yourself more dependent on good working business relationships with suppliers and customers, as well as potential business backers for continued business investments. Having a board of directors with diverse business backgrounds allows you to use the members’ varied business connections to build a network of business contacts that you can further develop into trusted business relationships for your own business. If you want a head start in competition, don’t be shy about asking for relationship favors from your board. By setting up a board of directors for your small business, you can add to your competitive advantage and improve your small business’ survival rate.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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